At the beginning of a marriage, most couples hardly consider the possibility of divorce. Nevertheless, many choose to create prenuptial agreements—arrangements designed to define the division of assets and income in advance. These agreements are made with the goal of protecting the less affluent partner, for example by excluding certain income or assets from the joint division or including provisions for equalization. However, over the years, it often turns out that the original agreements no longer align with the current reality. Changes in business profits, investments, or the division of labor can lead to ambiguities regarding what exactly is meant by ‘income’ or ‘assets.’ This can have significant financial consequences during a divorce, making it essential to periodically review and update the prenuptial agreements to reflect the current situation.
1. The Role of Prior Agreements and Their Objectives
Prenuptial agreements primarily serve as a preventive tool to avoid future disputes. They set out in advance how assets and income should be divided in the event of a divorce. Often, specific provisions are included, such as excluding certain business income or real estate from the joint division or including equalization clauses. These clauses are intended to protect the financially weaker partner, preventing them from being left without resources after a divorce. While such agreements may seem clear at the outset, the context of the marriage—under which they were made—can drastically change over time. What was considered adequate protection at the time may later be perceived as unclear or unfair, especially when the financial situation and composition of the assets change significantly.
2. Interpretation Problems and Practical Examples
In practice, concrete problems often arise when old prenuptial agreements must be applied in a divorce. For example, there may be confusion regarding the definition of ‘income’ when an entrepreneur had a sole proprietorship during the marriage but has since established several successful businesses in different limited liability companies (BVs). In such a case, should only the management fee be included, or also the (accumulated) business profits and dividend payouts? Additionally, the absence of annual equalizations in the original agreement may lead to a legal presumption: in the event of divorce, it will be assumed that all accumulated assets are joint, meaning that the person who owns more than 50% of the total assets must pay substantial compensation to the other partner. A practical example shows that a woman, who initially sought protection from creditors, might still face a significant financial settlement despite having no direct claims to shares or real estate, because all financial surpluses are still counted.
3. Revaluation and Update: Prevention of Future Conflicts
The reality is that prenuptial agreements are not static but must be regularly reviewed to stay aligned with the current personal and financial circumstances. It is wise to have the agreement assessed by a notary and a financial expert, especially in the case of significant changes, such as converting a business from a sole proprietorship to a limited liability company (BV) or a major shift in the division of labor. This ensures clarity about what constitutes ‘income’ or ‘assets’ and that any equalization clauses are clearly defined. By proactively documenting how investments should be legally treated—whether as loans or gifts, and whether appreciation or depreciation should be considered—much uncertainty and long-lasting legal procedures can be avoided.
4. Practical Implications and Strategic Advice
Updating prenuptial agreements provides both partners with the opportunity to consciously and cooperatively settle relevant matters before a conflict arises. A well-drafted and up-to-date document prevents unforeseen and significant financial consequences in the event of a divorce. Strategically outlining provisions, such as periodic equalizations of saved income and precisely defining which investments belong to the joint asset division, provides both parties with clarity and certainty. It is essential to regularly seek legal advice and update the prenuptial agreement so that it serves as a reliable foundation for a fair and balanced settlement in the event of a divorce. This way, the parties can confidently look back at the agreements made during the marriage, knowing that the arrangement will not lead to prolonged and costly disputes in the future.
