A prenuptial agreement is made before two parties marry or formalise their cohabitation. In such an arrangement, the couple may choose to make certain agreements about the division of their property.
The value of a prenuptial agreement
In practice, parties often do not realise the consequences of their prenuptial or cohabitation agreement or of their partnership conditions. Not only because they did not sufficiently consider ending the marriage/relationship when making the arrangements, but also because – by developments in case law and legislation – agreements made may now have different consequences. Upon ending the marriage/relationship this may lead to unpleasant surprises with far-reaching financial implications.
An example: the “set-off clause” found in most prenuptial agreements often leads to complications. This set-off clause stipulates that the income that has not been used towards costs of the household must be distributed annually between spouses. Because annual settlement rarely occurs, at the end of a marriage it has to be divided as yet as available capital. However, courts adjudicate increasing amounts towards this saved income such as the assets (or parts thereof) of a company where one of the spouses is the owner. An entrepreneur rarely seems to be aware of this.
The opposite is that if no set-off clause is included in the prenuptial agreement, it is possible that the non-entrepreneurial partner is entitled to nothing if it comes to a divorce. That can be perceived as unjust, for example, if one partner has stopped working to care for the children.
No set-off clause
Our family law experts can advise you at different stages; not only before the agreements are made, but also during and at the end of the marriage/relationship. GMW lawyers can examine the prenuptial or cohabitation agreement and indicate what the legal consequences would be in the event of a divorce or separation. If it appears that the effects of the prenuptial or cohabitation agreement are objectionable, then we can advise you on the possible steps that can be taken.
Do you have questions about prenuptial agreements or the implications of Dutch law on the division of your property? Please contact us; we will be glad to assist you.
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