Recently, prenuptial agreements between spouses have turned into an ordinary affair and it’s gaining momentum. The reasons for these are:
- Spouses get married at a fairly advanced age (there are almost no weddings of soldiers and students. People marry, having at that moment some financial stability: securities, investments in funds, real estate, etc.).
- Awareness of people getting into marriage.
Of course, the second reason is a consequence of the first one. According to statistics in recent years, one in every three couples get divorced. Everyone wants to believe that they are the couple who do not need a prenuptial agreement, but still prefer to be calm about their financial future, if suddenly the relationship comes to a standstill.
People are afraid of uncertainty. The prenuptial agreement, just like car insurance, apartments, etc., makes our future clearer, more predictable, which allows a person to “sleep peacefully”. Of course, one does not want to think about the fact that their marriage will someday disintegrate, but it’s better and wiser to:
- Think about it once,
- Draw up a prenuptial agreement (and, if possible, a will)
- And forget about it.
Prenuptial agreement – When?
Yes, experienced lawyers recommend drawing up, together with the prenuptial agreement, a will too, for it is an integral part in everything that has to do with personal and joint property. Therefore, the most suitable time for drawing up a prenuptial agreement is the period of romantic relations before the wedding, though it may sound strange. The alternative of not drawing up a prenuptial agreement will cost you dearly (money, time and nerves …). Drawing up a prenuptial agreement, strengthens the relationship between the spouses and gives peace of mind. This is evidence of maturity and wisdom of people who are getting married, this is a good investment in their long-term life together.
Prenuptial agreement – Common mistakes
Based on our experience, there are two common mistakes that married couple make in relation to prenuptial agreements:
On the one hand, the very proposal of drawing up a prenuptial agreement by one of the spouses, makes the other spouse turn on the red light. But this is not true: the most important thing is the content of the prenuptial agreement, and not the fact of its existence. One of the spouses may even be pleasantly surprised by the concern for their future (the settlement of the distribution of existing and future property, gifts, inheritance, etc.). If the conversation of one of the spouses about the prenuptial agreement is strictly not accepted by the other spouse, perceived sharply negatively, then, perhaps, one should think about the right way of choosing a companion in life (there you have it – the early misunderstanding of each other on vital issues, so what will happen next ?. ..).
Couples who do not have a significant amount of property prefer to save money and not draw up a prenuptial agreement. And this is the most common mistake: because the prenuptial agreement is a contract for the future, it determines the distribution of property, assets and money, which are present not only at the time of getting married, but also those that will be accumulated in the future.
We recommend that couples do not close their personal bank accounts at the beginning of their family life, but open a joint account in addition to their personal accounts, and determine in advance the distribution of money between the accounts (what money goes to which account). This method allows the couple to remain financially independent, and take care of the family.
For example, the husband decided to give an expensive gift to his wife. This means, he must pay for it from his personal account (because if he pays for it from the joint account, it will already be seen not as a gift to his wife, but as joint money spent).
There are different solutions for each couple, everything is very individual. An experienced lawyer who specializes in prenuptial agreements can offer you such solutions, which you didn’t know about. And if for some reason you did not draw up a prenuptial agreement before the wedding, then it’s not too late to do so even after the wedding. But if this is not your first time getting married (this is an even more complicated situation, since you need to settle property issues in the previous marriage as well as in the new one), not drawing up a prenuptial agreement is extremely unreasonable.
In addition, such an agreement, regulating all property and financial issues of a couple living a joint life, can be drawn up not only by registered married couples, but also by spouses of common-law, including same-sex couples.
Our office is ready to draw up a legitimate, honest, dignified and balanced prenuptial agreement for each side, taking into account all the nuances of your situation. Clients of our office call the prenuptial agreement an insurance certificate, which allows one to avoid monetary and property conflicts without court proceedings.
Requirements for the prenuptial agreement:
- The agreement must be drawn up in a written form.
- The agreement must be signed by both spouses.
- The agreement must be confirmed by court.
How to confirm a prenuptial agreement?
- The prenuptial agreement between the spouses, who married, must be confirmed in the family court or in the rabbinical court.
- The prenuptial agreement between spouses who have not yet married must be confirmed in the family court or with the marriage registrar.
The purpose of such confirmation is to check and make sure that:
- The prenuptial agreement reflects the true will of both spouses,
- The prenuptial agreement was drawn up by mutual consent of the couple,
- Both spouses understand the meaning of the agreement and its consequences.
After confirmation of the prenuptial agreement (in the family court or in the rabbinical court or the marriage registrar), the prenuptial agreement receives a conclusion (court decision) and obtains legal power.
Prenuptial agreement – what if there is not one?
If the spouses have not drawn up a prenuptial agreement between themselves, then there is only one option for the distribution of property and finances between spouses in the event of the couple’s break up (regardless of whether their marriage is registered or not):
All property that has been accumulated by both or one of the spouses during the marriage, will be considered joint property, which will belong to both spouses equally. It will be divided in half when the relationship ends.
Any other option of property or finances distribution – only by drawing up a prenuptial agreement!
Prenuptial agreement – 3 components
The prenuptial agreement determines the distribution order, between spouses, of property and finances, which:
- Were in the possession of each of the spouses at the moment of getting married or drawing up of the agreement – current property and finances,
- Were accumulated during marriage (regardless of the type of relationship) – future property and finances.
In addition, the financial agreement determines:
- The order of dividing the property and finances between the spouses in the event of the dissolution of their marriage (termination of relations).
Thus, the prenuptial agreement guarantees each of the spouses, confidence and peace of mind in everything that has to do with their personal, as well as joint current and future property and finances. And all this is in regard to the couple’s wellbeing.
Prenuptial agreement – current property
In the framework of the prenuptial agreement, it is possible and necessary to accurately list the property that each side has brought into marriage, and “on a safe haven” agree to whom it belongs to (regardless of the number of years in marriage, the number of joint children, etc.).
For example, a woman, before the beginning of the relationship and the drawing up of the prenuptial agreement, has an apartment that she inherited from her grandfather. She is interested in keeping the full rights of the apartment and not losing it, no matter the circumstances. Hence, the prenuptial agreements lawyer, who draws up the prenuptial agreement for this couple, with the consent of both spouses, defines the above-mentioned apartment as current property belonging only to the female spouse. And, in case of parting, the male spouse will not have the right to any part of this apartment.
Another example: A man, before entering into a relationship, has his own apartment. He also wants, no matter what, to keep the full rights of the apartment. Then, in the prenuptial agreement, by mutual agreement of the spouses, it is set that in the case of divorce (the end of the relationship) this apartment remains in the husband’s possession, but with this condition: he must take care of housing for his wife and future children until they mature.
The best protection of current property is a competent, well thought-out and far-sighted prenuptial agreement that takes all the needs of each side into account. Of course, this should be done by your experienced lawyer who specializes in prenuptial agreements and wills.
Prenuptial agreement – future property
Future property is the property that the couple or one of the spouses will accumulate during their marriage or joint life.
In most cases, and so it is accepted, the couple determines that all future property that they gain during marriage or joint life will belong to both of them, 50/50. And that’s how it will be divided according to law, if a prenuptial agreement is not drawn up. But with the consent of the spouses and with the help of the prenuptial agreement it is possible to determine any proportions of division of property by the spouses’ will. There is no mandatory legal norm or law for a prenuptial agreement: the couple can determine any way of dividing property and finances.
Arrangement of division of joint property during the interruption of relations:
The prenuptial agreement, basically, should concern situations of interruption of relations: parting, divorce or death. The prenuptial agreement lawyer, together with the couple, determines the mechanism for arranging the division of the joint property accumulated by the couple.
It is advisable, in order to be consistent and far-sighted until the end, to draw up a will with the prenuptial agreement in order to fully determine the distribution of future property even in the event of a catastrophe or another event that may separate the couple. It is important to note that a will is drawn up for each person independently of their spouse.
Throughout life, a person can change or re-create his will as many times as he wants. The prenuptial agreement can also be changed, but only by mutual consent of the spouses.
Prenuptial agreement – what for?
The Supreme Court in Israel, in the instructions for drawing up prenuptial agreements, determined that in some cases, the property that belonged to one of the spouses before marriage (no matter whether it was accumulated or received as a gift), can be considered joint property with all the ensuing consequences in dividing it in the event of interruption of relations between the spouses. For example, the apartment in which the couple lives, belongs to the husband (this was his property before the relationship even began). But after the interruption of their relations, the court, in some cases, based on the specific situation, can decide that a part (up to 50%) of the apartment belongs to the wife.
In this case, if you are not satisfied with such perspective of arrangement of your personal property, then it is best to protect the current property by drawing up a prenuptial agreement.
The prenuptial agreement does not regulate the following aspects in the couple’s life:
- Protection of the rights of residence of the spouses before marriage.
- Protection of the rights of residence, which the spouses acquire after the beginning of the relationship with the help of money received as a gift from the parents of one of them.
- Division of debts.
- Income, acquired in the asset of one of the spouses.
- Cases of increase in the asset’s value.
Prenuptial agreement – when is it best to draw it up?
Do you have a serious relationship, and you are already talking about the wedding? This is the most suitable time for talking about drawing up a prenuptial agreement! It is when there is love, unity and mutual respect between you, and not when, god forbid, there is a real crisis in your relationship. Of course, this seems illogical, but especially at the time when you are happy together and you understand each other, it makes sense, once and for all, to settle the property issues, draw up a prenuptial agreement regarding your current and future property and not bother with this issue ever again.
Besides, at the same time you will get to know your spouse better. After all, if you do not come to an understanding on such a vital issue at the peak of your love, then it’s worth thinking about what will happen later, and is it really the other half for you?…
The prenuptial agreement is the basis for partnership; it strengthens marriage and regulates mutual joint responsibilities, just in case.
Types of prenuptial agreements
In Israel, there are three types of agreements:
- Prenuptial agreement before marriage.
- Prenuptial agreement during marriage.
- Prenuptial agreement between common-law spouses.
Prenuptial agreement for common-law spouses
In the same way as couples who officially registered their marriage, spouses of common-law can regulate property and financial issues among themselves by drawing up a prenuptial agreement with a prenuptial agreements lawyer.
The difference in the prenuptial agreement, when it’s about common-law spouses, is as follows:
It is not necessary to confirm the agreement with a legal authority (family court or a marriage registrar).
The consequences of a prenuptial agreement that are not confirmed in the family court
Prenuptial agreements lawyers strongly recommend confirming the agreement with the family court, because:
- The family court checks:
- Is the agreement honest?
- Do the spouses understand its meaning and its consequences?
This allows, in the event of a break up, the prevention of possible claims of the spouses about misunderstanding the content or honesty of the prenuptial agreement.
- The prenuptial agreement has a certain period of validity. This is very important in the event that your relationship ends and you need to share the property.
Only in exceptional cases of court proceedings of unconfirmed prenuptial agreements, the court can determine the duration of such an agreement, but only if the couple can prove that they acted exactly in accordance with their prenuptial agreement for a long period of time.
Which agreements do not require confirmation in court?
There are cases when the spouses draw up an agreement that does not apply to property or finances. Such non-financial agreements between spouses do not require confirmation in court.
Situations when a prenuptial agreements lawyer is absolutely necessary:
- One of the spouses, at the time of the beginning of the relationship, has more property than the other (money, shares, apartments, cars, etc.).
- One of the spouses, already in a relationship, should be receiving a large gift (payment) or inheritance.
- The money of one of the spouses is invested in securities, and the value of investment has increased.
- The parents of one of the spouses want to help the young couple buy an apartment, and the parents of the second spouse cannot take part.
- One of the spouses invested all his money in a business that was supposed to make a profit in the future, but this did not happen, and today he / she has no more big savings.
- One spouse has an apartment at the time of the beginning of the relationship. Does it matter whether there is a mortgage on it? Does the couple live in that apartment or maybe they rent it out and the rent covers the mortgage, and some money remains. With what money will repairs be done? What to do with this apartment if the couple’s relationship ends?
There is almost an infinite number of situations that put spouses in a state where one literally has to choose, between love and property.
All of the above mentioned issues and many others can be turned into clear, logical and honest paragraphs in the prenuptial agreements which we draw up for our clients. Our task is to preserve your rights without violating the relationship of the couple. This is the specialty of our lawyer’s office with prenuptial agreements and wills.
Prenuptial agreement – inheritance and gifts
It happens that a person suddenly receives a large sum of money, an apartment, a business or something else. We recommend to be prepared for this situation, otherwise such news can turn into your family’s catastrophe, because if you did not draw up a prenuptial agreement with a professional prenuptial agreements and wills lawyer, you will be subjected to the law of financial relations, which determines that all of the accumulated property after the wedding or during the marriage of common law becomes joint property and will belong to both spouses. This problem can be solved in a civilized and honest way, if (preferably in the period of romantic relations before the wedding) you draw up a prenuptial agreement in advance and on time and thus guarantee confidence and peace of mind.
It is important to note that the prenuptial agreement can be drawn up even after a wedding. The requirements for this will be the same:
- The agreement is drawn up in written form,
- The agreement is signed by both spouses, and
- The agreement is confirmed in a family court or a religious court.
The lawyers of our office will be happy to help you with everything that has to do with prenuptial agreements and wills.
Prenuptial agreement – how to change it?
If necessary (in life, after all, something is constantly changing), then the prenuptial agreement can be changed at any time. The procedure of changing a prenuptial agreement is, in fact, the drawing up of a new prenuptial agreement, this means:
- An agreement in a written form is required,
- With the signature of both spouses and
- The confirmation of the new agreement in a family court or a religious court.
And, of course, this important document will most competently and comprehensively be composed by a professional lawyer specializing in this field.
Prenuptial agreement – tax planning
We make optimal planning for the financial future of couples in many aspects, including everything that has to do with real-estate taxation. After all, the division of property leads to tax reduction. And this circumstance should be taken into account when you plan, for example, buying or selling an apartment or other real estate. In such matters, there are many subtleties and nuances. Therefore, we recommend using the services of a professional lawyer who specializes in prenuptial agreements and wills.
The lawyers of our office will be happy to answer any questions regarding the drawing up of prenuptial agreements and wills – leave us a message and we will contact you within 24 hours or call us right now!
* The above given article is by no means, juridical consultation and only reflects some aspects about drawing up prenuptial agreements and wills in Israel.