When and for whom is a marital agreement advisable?

Are you planning to get married or are you already in a harmonious marriage? A marital agreement is advisable if you want to clarify, either before or during the marriage, the terms and conditions that will govern your life together as well as the dissolution of the partnership.

In particular, it makes sense to address the consequences of divorce when partners come together with unequal income levels.

To many, such an agreement seems like a sign of a lack of trust or simply doesn’t make much sense. After all, your goal is a long, happy marriage—not a separation. Look at it positively:

No one knows what will happen in a few years, and divorce is generally not easy for anyone. After all, one in three marriages in Germany ends in divorce.

A well-thought-out marital agreement can help ensure that a potential future divorce is handled fairly and as smoothly as possible.

If the marriage lasts, the marital agreement can also offer advantages, such as those related to inheritance or tax law.

Watch our short video now, in which we explain everything you need to know about marital agreements—what they include and why they’re so important:

All the information from the video is also available here in more detail:

1. A High Degree of Contractual Freedom

The law generally provides for the community of accrued gains as the default matrimonial property regime. In the event of a divorce—to put it simply—the assets accumulated by the spouses during the marriage are divided. This model is often perceived as unfair by the spouse required to make a settlement payment and can, in certain cases—such as when a business is valued during a divorce— pose a threat to the business.

The law permits deviations from the statutory matrimonial property regime, for example: separation of property.

This is essentially the opposite of the community of accrued gains and entails a strict separation of both the assets brought into the marriage and those accumulated during the marriage. Consequently, there is no property settlement in the event of a divorce when a separation of property has been agreed upon.

If a marital agreement provides for separation of property, a divorce can be finalized quickly and without the hassle of asset valuation.

1.1 Disadvantages of Separation of Property

However, agreeing to separate property also carries risks for the financially weaker spouse. If one spouse did not work during the marriage and instead primarily took care of the household and children, he or she will be left without financial resources in the event of a divorce.

Whether and for how long post-marital spousal maintenance will be paid is uncertain and depends on a wide variety of factors.

But even if the marriage lasts, separation of property can entail financial disadvantages. If one spouse dies, the surviving spouse must expect significant tax disadvantages, as they are not entitled to the tax benefit of receiving one-quarter of the assets tax-free under the separation of property arrangement.

1.2 Modified Community Property

Contrary to the widespread belief of many married couples, however, separation of property is not the only alternative to avoiding the community of accrued gains.

It is also possible to exclude the community of accrued gains solely in the event of divorce by entering into a marital agreement. This allows the tax disadvantages of separate property described above to be avoided in the event of a spouse’s death.

The issue is, however, very complex: A marital agreement serves to prevent unnecessary complications and nerve-wracking, costly legal disputes in the event of a divorce.

The interests of both spouses should be taken into account when drafting a marital agreement.

A certified specialist lawyer can review the legal requirements and assist you in drafting a contract tailored to your wishes and circumstances.

2. Taking Inheritance Provisions into Account

Did you know that the matrimonial property regime can also affect inheritance? Your agreement may influence how much your partner inherits in the event of your death and, consequently, how well he or she is financially secured.

Therefore, seek the assistance of a family lawyer. This will give both of you the assurance that an agreement, however well-intentioned, does not have any adverse consequences.

3. Avoiding Financial Disadvantages

Although the German Civil Code allows for contractual freedom in drafting agreements, there are limits.

These limits pertain to the fundamental disadvantage of a spouse, as well as to maintenance provisions: You may enter into agreements regarding maintenance, the matrimonial property regime, and pension rights equalization; however, in certain cases, such agreements may be void.

In this context, advice from a certified specialist lawyer in family law is crucial and indispensable.

After all, the purpose of a marital agreement is to reach a mutual understanding with your partner “in good times” regarding financial matters in the event of a divorce. A certified specialist lawyer will help ensure that, should the worst happen, everything is actually arranged exactly as you both wish.

Of course, you hope this worst-case scenario never happens. If it doesn’t, that’s all the better.

Otherwise, you’ll have the peace of mind even during the marriage that neither you nor your beloved partner will ever have to “air your dirty laundry in public”—which makes a separation so much harder.

4. Individual contractual freedoms and their limits

Your marital agreement should “hold up” in court if necessary, meaning it must have been validly agreed upon. The validity of the provisions should therefore be reviewed during the drafting process.

While the freedom to contract when entering into a marital agreement is quite broad, it does have its limits.

Both personal and financial circumstances play a role in drafting a marital agreement. Sometimes it comes down to details and nuances, as well as the proportionality of individual provisions.

Legal counsel helps you assess legal risks and ensure your interests are taken into account when drafting the contract.

Ultimately, the contract should provide you with security and be recognized by a court.

Conclusion: Have your marital agreement drafted by a certified specialist lawyer in family law to ensure that, in the event of a dispute, individual clauses—or even the entire agreement—are not declared null and void.

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