Marriage Contract

Nobody likes to think about the consequences of a possible future divorce before getting married. Often, however, it makes sense to plan for that eventuality in good time. This can be done with a marriage contract (Ehevertrag), often referred to as a prenuptial agreement. It can be concluded before or even after the wedding. A marriage contract allows couples to settle their affairs at a time when their relationship is intact and they are in agreement with each other.

Dr. Christina Schmidt, attorney at law (Rechtsanwältin), advises you in detail on marriage contracts and explains the legal issues that need to be considered.

01 What applies without a marriage contract?

Without a marriage contract, a divorce leads to what is known as the equalisation of accrued gains (Zugewinnausgleich): unless a couple has agreed otherwise, they live by law under the matrimonial property regime of the community of accrued gains (Zugewinngemeinschaft). Both spouses' assets therefore remain separate; on divorce, however, the spouse who achieved the greater increase in assets during the marriage (accrued gains) must pay half of the difference to the other. Without a marriage contract, questions of maintenance and the pension rights adjustment (Versorgungsausgleich) are likewise governed by the provisions of the German Civil Code (Bürgerliches Gesetzbuch, BGB).

02 When does a marriage contract make sense?

In many cases, the rules of the BGB lead to a perfectly fair result for both spouses. This is especially true for couples with children: even today, many women take on the childcare and therefore work only part-time or stop working altogether. The provisions of the German Civil Code generally go a long way towards compensating for the financial disadvantages they have to accept as a result. The equalisation of accrued gains, the pension rights adjustment and the statutory maintenance claims deserve particular mention here.

There are, however, marriages in which this traditional division of roles does not apply, or in which a marriage contract may make sense for other reasons. The following situations, among others, come to mind:

• The spouses have no children and are both earning. In this case, neither of them usually depends on compensation from the other.
• Both partners are already of an advanced age when they marry; their careers are well established and there are no children to look after. Here, both partners are often financially independent. The pension rights adjustment and the equalisation of accrued gains are then usually unnecessary.
• One spouse is considerably wealthier than the other and does not want to suffer major financial losses in the event of a divorce.
• One partner is an entrepreneur. He or she may, for example, wish to exclude business assets from the equalisation of accrued gains so as not to jeopardise the continued existence of the company.
• The spouses are of different nationalities or live abroad. In this case, a marriage contract can determine which country's law is to apply in the event of a divorce.

03 What can be regulated in a marriage contract?

In principle, spouses have very wide freedom in drafting a marriage contract. This allows them to make arrangements that best suit their personal circumstances. The following agreements, for example, are possible:

• To avoid disputes later on about the amount of initial assets in the equalisation of accrued gains, these can be precisely quantified and fixed in the marriage contract.
• Instead of the community of accrued gains, the spouses can agree on what is known as separation of property (Gütertrennung). Both spouses' assets then remain completely separate and there is no equalisation of accrued gains after a divorce. This arrangement does, however, have disadvantages if one spouse dies: the surviving spouse receives a smaller share of the estate and pays more inheritance tax.
• These tax disadvantages can be avoided by agreeing on a modified community of accrued gains (modifizierte Zugewinngemeinschaft). This allows, for example, the equalisation of accrued gains to be largely restricted without the unfavourable tax treatment on death that applies under separation of property. Certain assets (e.g. property, business assets) can also be excluded from the equalisation of accrued gains. It can also be agreed that the accrued gains are to be equalised only in part, or capped at a certain sum or equalisation ratio.
• Instead of the community of accrued gains, the spouses can also agree on community of property (Gütergemeinschaft). There are then no separate assets at all; instead, they merge, as it were, into the spouses' joint assets. In the event of divorce, these are divided.
• A marriage contract can also exclude or modify the pension rights adjustment. Sometimes each spouse has already acquired sufficient pension entitlements of his or her own. Or the spouse who would actually be entitled to the adjustment has built up considerably higher other retirement provisions than the spouse liable to make it.
• Finally, a marriage contract can also exclude, limit or extend post-marital maintenance claims. It is not possible, however, to waive maintenance during separation (Trennungsunterhalt) for the period between separation and divorce.

04 Which provisions are not permitted in marriage contracts?

There are matters that, as a rule, may not be regulated by a marriage contract. In addition, certain contractual clauses may be impermissible. This can render the clause in question, or the entire contract, invalid. The following provisions, among others, are problematic:

• Neither child maintenance nor parental responsibility (Sorgerecht) for a child can be determined in a marriage contract. Agreements on where the child lives and on contact rights, on the other hand, are possible.
• A marriage contract may be invalid as contrary to public policy (sittenwidrig), in particular because one spouse's inexperience or dependence was exploited and he or she has been unilaterally disadvantaged. To assess this, the contract must always be considered as a whole.
• The financially weaker spouse cannot completely waive post-marital maintenance for childcare (Betreuungsunterhalt) in a marriage contract if he or she is looking after the couple's children.
• Nor can maintenance be completely excluded by contract for a person entitled to maintenance who is evidently unable to provide for himself or herself owing to age, illness or similar reasons.
• A contractual exclusion or modification of the pension rights adjustment may likewise be invalid if one partner is unreasonably disadvantaged as a result. This must be examined on a case-by-case basis.

05 Legal advice

To be valid, a marriage contract must be concluded before a notary with both partners present at the same time.

It is always advisable, however, to consult a lawyer experienced in family law beforehand. Either have the document drafted directly by the lawyer or have a draft prepared by the partners legally reviewed. Dr. Christina Schmidt discusses your individual situation with you and advises you in detail on the risks and benefits. Together, a contract is drawn up that always contains the best arrangements for your situation. This avoids errors in the contract that could, in the event of a later divorce, have serious financial consequences.

Even if you concluded a marriage contract some time ago but would now like to adapt it, for example to changed circumstances, Dr. Schmidt will advise you thoroughly and competently.

06 Alternatives to a marriage contract

Couples whose marriage has already broken down and who are heading for divorce can conclude a divorce settlement agreement (Scheidungsfolgenvereinbarung) instead of a marriage contract. This is a contract in which ancillary matters of the divorce, i.e. the spouses' mutual rights and obligations after the divorce (e.g. maintenance, division of assets etc.), are settled by mutual agreement. Like the marriage contract, this agreement must be notarised. Unlike a marriage contract, however, a divorce settlement agreement is only drawn up once the spouses have genuinely decided to divorce. If you would like to conclude such an agreement to settle the consequences of a separation, Dr. Christina Schmidt will likewise be glad to support you with advice and practical assistance.