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Prenuptial Agreement: 8 Issues to Clarify Before Getting Married
In addition to being a union of two people’s feelings, marriage is a legal partnership that incorporates numerous other matters, particularly those pertaining to property and the economy. In actuality, property split is a major source of contention in many marriages, particularly when the husband and wife decide to get a divorce. Prenuptial agreement is now a crucial component for couples looking to safeguard their assets and rights in a time when marriage relationships are changing and becoming more diverse. They help to guarantee openness and prevent future arguments. Conversely, in Vietnam, the concept is still relatively new and isn’t yet widely accepted in married partnerships. Thele.blog will explain the prenuptial agreement, the premarital commitments, and the advantages and difficulties of signing it before beginning the “Marriage registration procedures“.
1. What is a prenuptial agreement?
One legal tool that couples can utilize to clearly outline each party’s rights and responsibilities with regard to current and future assets is a prenuptial agreement. This agreement, which is usually written prior to the marriage being officially registered, may include clauses pertaining to future assets, income, obligations, and money management.
Examples of prenuptial property agreements:
Mr. A and Ms. B plan to get married and have some assets before marriage. Mr. A owned a house and some other real estate before meeting Ms. B. Ms. B has savings and shares in a family company. They agree that Mr. A’s house and real estate will remain his separate property. Meanwhile, Ms. B’s savings and shares will remain her separate property.
After marriage, they will both buy a new apartment, and this property will be considered joint property. They together make a prenuptial agreement, which stipulates the protection of each party’s separate property and identifies the joint property arising during the marriage. This agreement is made in writing, notarized, and has legal value.
2. Clarify about property in a prenuptial agreement
- Identify existing assets: Each party's separate assets before marriage must be clearly listed, including real estate, deposits, inheritances, gifts, etc.
- Assets formed after marriage: Evidently stipulate the principles for dividing common assets and separate assets in the event of divorce. In addition, the agreement must stipulate how to use common assets to ensure the rights of both parties.
- Manage common and separate debts: Determine each party's responsibility for existing debts and debts arising in the future.
- Inheritance and gifts: Determine whether these types of assets are common or separate assets during the marriage.
- How to resolve property disputes: Establish rules for dividing assets in the event of a dispute or divorce, including the principles for determining assets related to personal debts.
3. Benefits of a prenuptial agreement
- Financial transparency: The agreement helps the parties understand their current assets and future joint assets.
- Reduce disputes: Clear regulations help limit conflicts over assets during marriage or after divorce.
- Protect rights: Ensure legal benefits for both parties, especially in cases where there is no longer affection.
- Increase sustainability: The agreement helps lay the foundation for equality and fairness in marriage.
4. Conditions for establishing a prenuptial agreement
- Subject conditions
The subject has civil legal capacity and civil conduct capacity appropriate to the established civil transaction;
Subjects participating in civil transactions are completely voluntary;
The purpose and content of the civil transaction do not violate the prohibitions of the law and are not contrary to social ethics.
- Formal conditions
The agreement establishing the property regime of spouses exists under many different names, including prenuptial contract, marriage contract or premarital agreement, etc. Regardless of the name, the property regime according to the agreement is only valid and applicable when this agreement is established before marriage in the form of a notarized or certified document. The time when the property regime according to the agreement of spouses is based is from the date of marriage registration.
- Content conditions
The basic contents that must be stated in the agreement on the property regime of spouses include:
– Which assets are determined as common property and separate property;
– The rights and obligations of each person regarding the property to ensure the essential needs of the family;
– Conditions, procedures, and principles for dividing property when terminating the property regime;
– And other related contents depending on the agreement of the husband and wife.
5. Principles of applying the property regime by agreement
When applying the property regime by agreement, the parties will have to rely on the terms of that agreement to resolve property-related issues. However, when implementing the property by agreement, if issues arise that have not been agreed upon by the spouses or the agreement is unclear, the provisions of the law on marriage and family and the corresponding provisions of the statutory property regime will be applied to resolve:
- The agreement on the property regime of spouses may be declared invalid in whole or in part by the Court.
- In case the agreement on the property regime of spouses is declared invalid in whole by the Court, the statutory property regime of spouses shall be applied.
- In case the agreement on the property regime of spouses is declared invalid in part, the contents that are not invalid shall still be applied; for the invalid part, the corresponding provisions on the statutory property regime of spouses shall be applied.
6. The agreement is subject to amendment and supplementation
A prenuptial agreement is not a fixed legal document that can be amended or supplemented. In the case where the agreed property regime of spouses is applied, during the marriage, the spouses have the right to agree to amend or supplement part or all of the content of that property regime or apply the statutory property regime.
The agreement to amend or supplement the content of the property regime of spouses must be notarized or certified in accordance with the provisions of the law. Thus, in terms of form, the amendment or supplementation of the agreement as well as the establishment of new content of the agreement must comply with the provisions.
The amendment or supplementation of the content of the property regime of spouses through amending part or all of the agreed content does not terminate the agreed property regime of spouses but only changes some of the content according to the previous agreement of the spouses.
The agreement to amend or supplement the content of the property regime of spouses takes effect from the date of notarization or certification. Husband and wife have the obligation to provide relevant information to third parties. In addition, to avoid the situation where husband and wife amend or supplement the content of the agreement on the property regime of husband and wife to avoid performing civil obligations the agreement on the property regime of husband and wife is amended or supplemented, the property rights and obligations arising before the amendment or supplement are implemented will still be legally valid, unless the parties have agreed otherwise. Thus, the amendment or supplement only changes the rights and obligations of husband and wife regarding the property of husband and wife according to the agreement and does not change the property rights and obligations of husband and wife towards related third parties.
For example:
Mr. A and Ms. B signed a prenuptial property agreement before getting married. In which, the existing assets of each party are clearly identified, as follows:
Mr. A: An apartment and a car
Ms. B: A savings account worth VND 500 million
They agreed that these assets are the separate assets of each party and do not share ownership. However, after 5 years of living together, both want to supplement and amend some terms to suit the financial situation and new assets arising during the marriage.
Amendment and supplement content:
- Additional common assets:
The new house purchased after marriage will be considered common assets, owned by both parties.
Mr. A’s car is amended to be a common asset because Ms. B also contributed financially to upgrade the car.
- New regulations on separate property:
Ms. B’s savings account will still be kept as separate property, but the interest arising from this account will be divided equally for family use.
Mr. A agrees to add his shares in his own company as separate property, not for common use.
- Regulations on inherited property:
Inherited property from both parents will be considered separate property by default unless otherwise agreed in the future.
- How to resolve property in case of divorce:
In case of divorce, the new house will be sold and the value will be divided equally, after deducting related debts.
Each party’s separate property will be kept as agreed.
- Amendment process:
The two parties discuss and agree on the content of the amendment and supplement.
Draft the amendment agreement with the support of a lawyer to ensure legality and fairness.
Submit the amendment agreement to a notary office for authentication, ensuring legal validity.
7. Prenuptial agreement void
In addition, a prenuptial agreement may be invalid if it violates the following issues:
- Failure to comply with the conditions for the validity of the transaction as prescribed in the Civil Code and other relevant laws.
- Violation of the general principles on the property regime of spouses.
- Violation of the rights and obligations of husband and wife in meeting the essential needs of the family.
- Violation of transactions related to the house as the sole residence of the husband and wife.
- Violation of transactions with a bona fide third party related to bank accounts, securities accounts, and other real estate that are not required to be registered for ownership or use according to the provisions of law.
- The content of the agreement seriously violates the right to alimony, the right to inheritance, and other legitimate rights and interests of fathers, mothers, children, and other family members.
Therefore, when changing the content of the prenuptial agreement, the parties must pay attention to the principles prescribed by law to avoid resolving other legal cases.
8. Practical problems with a prenuptial agreement
Lack of legal understanding
Many people do not clearly understand their rights and obligations in prenuptial agreements. This leads to incomplete, unclear, or non-compliant agreements, making the agreement vulnerable to being invalid.
Mental factors
Signing a prenuptial agreement can be seen as a lack of trust in the marital relationship. If not done in a transparent and reasonable manner, this can cause tension and conflict if either party feels uncomfortable with clearly defining financial rights and obligations.
Changes in financial situation
Prenuptial agreements can become inflexible if either party’s financial situation changes. This may require adjusting and updating the contract to reflect the actual situation.
Post-marital disputes
Some couples, after marriage, may feel dissatisfied with prenuptial agreements, especially when joint and separate assets are not clearly defined. When disputes arise, the parties often disagree with the content of the previously signed agreement.
Changes in assets during marriage
Another difficulty is that assets can change during the marriage (for example, due to increases in real estate value or inheritance from relatives), and if the agreement does not take these changes into account, it can easily lead to disputes over the value of assets upon divorce.
Noted things when making a premarital property agreement
First, determine ownership of the property. The husband and wife need to clearly determine which property is the separate property of each party and which property is the common property of the husband and wife to determine the rights and obligations of each person concerning that property. The husband and wife can agree on a method of determining property according to one of the following options:
- Property between the husband and wife includes common property and separate property of the husband and wife
- Between the husband and wife there is no separate property of the husband and wife, but all property acquired by the husband and wife before marriage or during marriage is the common property
- Between the husband and wife there is no common property, but all property acquired by the husband and wife before marriage and during marriage is the separate property of the person who acquired that property
- Determined according to another agreement of the husband and wife
In case the husband and wife agree on common and separate assets according to the listed plan, it should be noted that if the agreement does not mention property rights to intellectual property objects; assets that the husband and wife establish separate ownership rights according to the judgment or decision of the Court or other competent authority or subsidies and incentives that the husband and wife receive according to the provisions of the law on incentives for people with revolutionary contributions; other property rights associated with the personal status of the husband and wife, these assets will be determined as the separate property of the husband and wife.
Second, the content of the marital agreement on property must meet the general principles of the property regime of the husband and wife, specifically:
- The husband and wife are equal in rights and obligations in creating, possessing, using, and disposing of common property, without distinguishing between family labor and income-earning labor.
- The husband and wife have the obligation to ensure conditions to meet the essential needs of the family.
- The exercise of property rights and obligations of spouses that infringe upon the legitimate rights and interests of the husband, wife, family, and others must be compensated.
Third, for the property to be the sole residence of the husband and wife, the establishment, implementation, and termination of transactions related to this type of property must have the agreement of the husband and wife. In the case that the sole residence is the separate property of the husband or wife, the person who owns this property has the right to perform transactions related to the property but must ensure accommodation for the other person.
Fourth, the parties should consult a lawyer and the agreement must be notarized to ensure its legality and validity.
Finally, a prenuptial agreement is only legal when both parties are free to decide, and neither party is forced.
Conclusion
Prenuptial property agreements are an important tool that not only helps ensure transparency and reduce disputes but also builds a fair foundation in marriage. In the context of modern society, it has become an essential measure to protect the rights of the parties, while creating the premise for a stable and long-lasting married life.
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