Cross Border Prenuptial Agreements Navigating the Dangerous Shoals of Love, Wealth and Marriage Involving Multiple Countries of Origin, Domicile and Residence By Mark E. Haranzo and Brooke M. Elliott A prenuptial agreement is entered into by a couple before marriage to address the rights and obligations that accrue in the event of a termination of the marriage by divorce or death. In the United States, there is not a uniform approach that controls prenuptial agreements because matrimonial law varies by state. Therefore, couples may face challenges enforcing a prenuptial agreement in different states due to conflicts of laws from each state. These challenges become more complex when navigating cross-border prenuptial agreements due to the application of foreign laws and multijurisdictional issues. As the world becomes more interconnected, international issues associated with prenuptial agreements are of significant importance because clients' wealth and relationships will increasingly span across many different countries and jurisdictions. There are many reasons why a couple may need to consider an international prenuptial agreement, such as owning assets in different countries, having multiple residences and/or nationalities, or the location of their business activities. It has become commonplace for couples from different countries to marry, to own assets in foreign jurisdictions and to live outside of their countries of origin. Since matrimonial laws are governed locally, each country has its own procedures and legal concepts to address a couple's property, marital and inheritance rights. Therefore, the criteria for enforcement varies among jurisdictions. In addition, while some countries have well-developed laws governing prenuptial agreements, others are much less developed, and it is common for the courts' position in various jurisdictions to diverge on the treatment and enforceability of prenuptial agreements. Civil law jurisdictions tend to have more established marital law regimes, whereas the laws governing prenuptial agreements in common law jurisdictions tend to be more unsettled. For example, the law governing prenuptial agreements in the United Kingdom, which is a common law jurisdiction, remains unsettled and largely relies on the 2010 landmark decision of the U.K. Supreme Court in the case of Radmacher v. Granatino, which held that while a prenuptial agreement is not automatically binding, the courts will consider the agreement if it is "freely entered into" and both parties have "a full appreciation of its implications." On the other hand, civil law jurisdictions, such as Brazil, tend to have more established marital law regimes. China's legal system is modeled after civil law jurisdictions. Similar to other civil law jurisdictions, prenuptial agreements are widely recognized in China so long as a court determines that the agreement was mutually entered into between a couple. Under the newly effective Chinese Civil Code, the term "joint property" generally refers to the property acquired and owned by husband and wife during a marriage, whereas, property acquired prior to marriage is generally considered "personal property." In the absence of a prenuptial agreement or in a situation where a prenuptial agreement is deemed to be vague, the distinction between joint and personal property should be governed by the relevant provisions of the Chinese Civil Code. However, the Chinese Civil Code allows for a couple to enter into a prenuptial agreement and elect to treat marital property as owned separately, jointly or as a combination of both. Although Hong Kong is part of China, the arrangement between China and Hong Kong has been described as "one country, two systems" because the two have historically had a separate legal and judicial system. Hong Kong was a British colony for more than 150 years and has adopted a legal system with principles similar to English common law. Therefore, the laws governing the enforceability of a prenuptial agreement are unsettled in Hong Kong and very few cases involving prenuptial agreements have been adjudicated by a Hong Kong Copyright © 2021 Holland & Knight LLP All Rights Reserved
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