Finances in partnership
Prenuptial agreement only for super-rich? Why it is so important to be honest about money early on
A prenuptial agreement can be worthwhile
© Jeffrey Hamilton / gettyimages
After the wedding is before the divorce? The fact is that almost every second marriage in Germany ends in divorce. And even if it’s unromantic: Anyone getting married should talk about money early on.
When Kim Kardashian and Kanye West tied the knot in 2014, the ink on the marriage contract was dry. West, who is estimated to have $ 100 million at their disposal, did not want a contract that would settle financial matters in the event of a divorce. But apparently his lawyers prevailed. Kim keeps the house after a divorce and receives $ 720,000 per year of marriage, up to a maximum of ten million dollars. She is also allowed to keep gifts and jewelry. The couple announced their split in February 2021.
A prenuptial agreement is only for neurotic celebs and the super-rich, one might think. In addition, the letter is considered unromantic: Even before you say yes, should you arm yourself for the end of the marriage? No, very few bridal couples like to talk about money. A huge mistake, like that Stiftung Warentest reported. Because the regulations that the legislature provides for spouses in the event of a divorce are not very individual – and often antiquated.
The fact is: in Germany every second marriage is divorced. It can hardly be assumed that one belongs to the 50 percent of all people who will remain happily married for the rest of their lives. A marriage contract regulates the division of property so that no one has to feel like a loser after the relationship has ended.
Community of gains? Separation of property?
With the marriage, the regulation of the community of gains for the bride and groom automatically comes into force. “The gain is determined by comparing the assets at the time of the marriage with those at the time the application for divorce was served”, so Stiftung Warentest. If a spouse has made more money, half of the difference must be paid. That all sounds very out of date – and is based on the time when the man took care of the income and the woman took care of the household and children. Because wives had little or no income, they were also the victims of divorce. That should be prevented.
Separation of property after divorce
As an alternative to this model, spouses can contractually stipulate other divisions, for example the separation of property. With this contract model, the spouses remain financially independent from each other. Everyone retains the fortunes that they brought into the marriage as well as what they gained during the marriage. There is no compensation for profits in the event of a divorce.
However: contractual clauses that excessively disadvantage a spouse are ineffective. Anyone who does not want to pay any pension compensation after the divorce or does not want to shell out anything for old age or illness is legally on thin ice.
1. Tip: marriage contract for double earners and the wealthy
Many marriages today look different from those of the parents’ generation. If both spouses are already professionally stable, a prenuptial agreement is a good option, which stipulates that neither of the two has to fear financial disadvantages in the event of a divorce. Neither the pension nor the profit compensation are then necessary. If one of the spouses is very wealthy and the other is virtually penniless, a contract is also advisable. This also applies when a company is brought into the marriage.
2nd tip: regulate profit in the prenuptial agreement
Spouses can regulate the gain in marriage differently from the law. A different compensation rate can be agreed. Or a gain – for example an inheritance or business assets – can be excluded. Important: Married couples should record the initial assets in a contract so that in the event of a divorce there are no disputes about when which assets were brought into the marriage.
3rd tip: clarify your pension scheme
Lump-sum care for the spouse can quickly become unfair in practice. An example: the husband is self-employed and pays little or nothing into the old-age provision, while his wife works part-time and looks after the children. She pays into the pension fund and thus acquires pension rights. In the event of a divorce – despite the low salary – she would have to settle this. No fair distribution.