Marriage is an act of love, but it is also a legal commitment that can have major consequences in the event of separation. That is why it is essential to draw up a marriage contract, a key tool in wealth planning.
In civil law countries such as Monaco, the marriage contract is traditionally used mainly to define the matrimonial property regime, i.e. the body of rules that will govern the property relations of the spouses, between themselves and with third parties, during the marriage and upon its dissolution.
Since 2017, private international law allows future spouses to also choose the law applicable to their divorce from the law of the State of which one of the spouses is a national or the law of the State in which they have their common domicile.
Depending on the applicable law, and subject to compliance with good morals and public order, the spouses may, to a certain extent, anticipate the financial implications of the divorce. This type of contract, known as a 'prenuptial agreement', is very common in Anglo-Saxon countries where the concept of a matrimonial property regime does not always exist.
However, when looking at the financial consequences of divorce from the point of view of Monegasque law, a distinction must be made between:
- Alimony awarded during the divorce proceedings.
- Compensatory allowance granted when the divorce becomes final.
- And the liquidation of the matrimonial property regime.
The law applicable to the divorce covers only the question of compensatory allowance, the first category being governed by the law applicable to the matrimonial rights and duties of the spouses, and the third category by the law applicable to the matrimonial property regime.
In conclusion, the prenuptial agreement offers greater freedom and security to the spouses, who can adapt their matrimonial property regime to their personal and professional situation and anticipate certain financial consequences of divorce.
This is why it is being more and more used in Monaco, especially by foreign couples who are attracted by the Principality's advantageous tax system and wish to set up an effective matrimonial and estate planning tool that can be recognised in the countries with which they have ties.
If marriage is an affair of the heart, it does not hurt to add a little reason to it.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
