What is a prenuptial agreement? It is an agreement which is signed by the couple prior to their marriage.
Is there really a need for one? Potentially, yes as the agreement would record how finances and other matters are to be resolved in the event of separation or divorce.
In today’s increasingly international world, prenuptial agreements have become particularly important for expatriate and cross-border couples. Where spouses have different nationalities, own assets in multiple countries, or may live in different jurisdictions during their marriage, a carefully drafted prenuptial agreement can provide greater financial certainty and help reduce future disputes concerning applicable law, jurisdiction and the division of assets.
Here is something for you to consider – When people live in different jurisdictions or are from different jurisdictions and decide to marry, it is imperative that when contemplating whether to enter into a prenuptial agreement, they seek specific advice in respect of the validity and implication of any such agreements in their home jurisdiction. By way of illustration, for a British Ex Pat who is residing in Dubai and who will be marrying a future partner who is from another Country, advice should be sought on the potential impact of the prenuptial agreement in England and the proposed spouse’s home country, as well as in the UAE.
This is particularly relevant where couples have international property portfolios, business interests, anticipated inheritances or substantial wealth accumulated before marriage. A prenuptial agreement can help establish the parties’ intentions regarding assets, liabilities and income before entering into the marriage, providing greater transparency and predictability should the relationship later break down.
Although the English Courts may not recognise prenuptial agreements as automatically binding or enforceable under English divorce law, they have a broad discretion as to how to order the division of finances and property on the dissolution of a marriage. The Courts can take a prenuptial agreement into account as one of the factors affecting its decision on the division of the parties’ assets /wealth. In the United Arab Emirates, there are no specific laws regarding prenuptial agreements. Such an agreement is a contract between two parties. It is therefore, important to take great care when drafting prenuptial agreements because if they have not been properly thought out or executed, it can lead to costly litigation.
In the UAE, the Family Courts may give persuasive weight to a properly drafted prenuptial agreement, particularly where it has been entered into voluntarily, without duress, and following full and frank financial disclosure by both parties. However, the Courts retain discretion and may uphold the agreement in full, apply only certain provisions or decline to enforce provisions that are inconsistent with applicable UAE law or public policy.
In particular, care should also be taken to ensure that the wording of any contract drafted in UAE with a possibility of it being relied on in the UAE Courts, should not offend Sharia Law principles. There is also the potential advantage of a prenuptial agreement determining which jurisdiction and which law should apply in the event of separation and or divorce.
For international couples, it may also be appropriate to consider whether “mirror agreements” should be prepared across multiple jurisdictions. This can be beneficial where the parties marry in one country, reside in another and may ultimately divorce in a third jurisdiction, helping to reduce the risk of conflicting legal outcomes.
Prenuptial Agreements for Non-Muslims and Muslims in the UAE
The legal position in the UAE differs depending on whether the couple is entering into a civil marriage or a Sharia marriage, making it essential to obtain advice that reflects the couple’s personal circumstances.
Non-Muslims and Civil Marriages
Under Article 6 of Federal Decree-Law No. 41 of 2022, non-Muslim couples may agree the terms of their marriage contract, including provisions relating to rights during the marriage, post-divorce entitlements, financial arrangements and certain matters concerning children.
In the Abu Dhabi Civil Family Court system, eligible non-Muslim couples may formally present their prenuptial agreement at the time of marriage and incorporate its terms into the civil marriage contract, allowing it to form part of the official marriage documentation.
For expatriate couples living in Dubai or elsewhere in the UAE, careful consideration should still be given to the governing law of the agreement, the jurisdiction in which disputes may arise and whether the terms are likely to be recognised internationally.
Muslims and Sharia Marriages
Sharia marriages operate within an established legal framework where the marriage contract itself is the primary legal instrument governing the rights and obligations of the spouses.
The marriage contract may include provisions relating to the dowry (mahr), maintenance, financial responsibilities and other mutually agreed conditions, provided they do not conflict with established Sharia principles.
Additional contractual conditions may also be incorporated into the marriage contract, including matters such as employment, enhanced financial provisions, restrictions on relocation or polygamy and, in certain circumstances, delegated divorce rights.
While some expatriate Muslim couples consider entering into separate agreements to regulate broader financial matters, such agreements may not automatically be enforceable. The UAE Courts will generally give significant importance to the official marriage contract when determining the parties’ legal rights and obligations.
Ensuring Fairness in Prenuptial Agreements
In ensuring that the Court in any appropriate jurisdiction considers the agreement to be fair,
- The parties will need to confirm that the prenuptial agreement is made at least 28 days prior to the date of the wedding;
- They should set out their financial circumstances in full;
- They should both obtain, or be given the opportunity to seek independent legal advice on the agreement and its effects and
- They should sign the agreement before witnesses.
- The agreement should also reflect that the parties have not been placed under any pressure to sign the document.
In addition, a well-drafted prenuptial agreement should clearly identify the governing law that applies to the agreement and specify the jurisdiction in which any future disputes should be determined. These clauses can be particularly important for expatriate couples with connections to more than one country.
Ideally, the agreement should also be negotiated well in advance of the wedding to ensure that both parties have sufficient time to review the terms independently and make informed decisions without pressure.
Advantages of Prenuptial Agreements
As with all contracts/agreements, there will always be advantages and disadvantages but through a collaborative approach, we can advise you on the various advantages such as :
- In having a prenuptial agreement, the parties can avoid protracted arguments in the case of separation or divorce.
- The parties can agree the financial arrangements in advance i.e split of assets / who is to pay for what.
- The parties can protect their premarital assets such as any real estate or business interests.
- In a situation where one of the parties has significant debts, the prenuptial agreement can protect the other from having to assume the obligations of the debt once married.
- A prenuptial agreement can also protect anticipated inheritances, family wealth and valuable personal assets intended to remain within one spouse’s ownership.
- It can provide greater certainty regarding the treatment of jointly acquired assets, investments and income generated during the marriage.
- For business owners, it may assist in protecting company shares and commercial interests from becoming the subject of complex financial disputes during divorce proceedings.
Disadvantages of Prenuptial Agreements
There are also various disadvantages which may need to be considered :
- Starting a relationship with a contract that sets out the particulars of what will happen upon a future divorce may instil a sense of lack of trust in the parties.
- Initially, the agreement may require one of the parties to give up their right to inherit from the other’s estate when he or she dies, although this can always be changed during the marriage by recording the intentions in a supplementary agreement.
- Following acceptance of a proposal to marry, a party may agree to terms that are not in their best interest because they are ‘too in love’ to be concerned with finances and what the future may hold.
- A poorly drafted or outdated agreement may create more uncertainty rather than protection, particularly where it does not reflect the couple’s changing financial circumstances or is inconsistent with the laws of the jurisdiction in which divorce proceedings eventually take place.
What to Include in Your Prenuptial Agreements
As the prenuptial agreement can cover nearly anything, this goes some way to allow you to feel at ease with regards to the contents. At James Berry & Associates, we are able to advise you on the issues that you may or may not want to include in your prenuptial agreement.
A starting point would be for you to list all your assets and belongings which you want to address in the agreement. For example, you may own a valuable family heirloom which you would wish to retain in the event of either a breakdown in the marriage or your death, so this could be mentioned in the agreement. Further, the agreement will allow you to specify your financial rights and responsibilities with your spouse. The nationality of you and your spouse is of importance as many countries have matrimonial regimes, in addition to the matters listed below. Matrimonial regimes are applied either by operation of law or by way of aprenuptial agreement. In Common law countries, the default and only matrimonial regime is separation of property. Countries which operate by a Civil Law jurisdiction have statutory default regimes whereby generally couples marry into some form of community of property by default. We will be able to advise you on these issues depending on your nationality.
With regards to your property/ assets, we can advise on issues such as:
- What would happen to any property that either of you brought into the marriage?
- Ensuring that your property/assets are not split against your wishes upon the breakdown of your marriage.
- If you own the family home in your sole name, what would happen to it ?
- What would happen to jointly owned assets including bank accounts/shares/policies etc?
- What would happen to any savings accumulated during the marriage ?
- If you receive an inheritance, what would happen to any property/assets (including any income that may be derived from these assets)?
- If you or your spouse have any pensions, how would they be split in the event of a divorce?
- If either of you have any debts, either in sole or joint names, how would they be dealt with?
- In the event of a breakdown of the marriage, what provisions, if any, should be put in place to pay or receive maintenance, including the level of maintenance and the duration of the same?
Other important provisions may include the treatment of business interests, future investments, gifts received during the marriage, overseas property and liabilities connected with companies or family businesses.
A comprehensive agreement should also include a governing law clause, jurisdiction clause, full financial disclosure by both parties and confirmation that each party has received independent legal advice before signing.
Reviewing Your Prenuptial Agreement
When and why should the prenuptial agreement be reviewed?
We can advise you on the types of triggering factors that may justify reviewing the agreement, including:
- After five years of marriage;
- Upon the birth of a child;
- Following a significant change in financial circumstances;
- Losing your job;
- Illness or disability;
- The acquisition of substantial assets;
- Starting or selling a business; or
- Receiving a significant inheritance.
Regular reviews are particularly important for expatriate couples because relocation to another country may affect the legal treatment and enforceability of the agreement under a different family law system.
Prenuptial Agreements and Children
Aside from the financial aspects, consideration for the family unit, including any children, should also be addressed.
A prenuptial agreement cannot prejudice the interests of any children in the family. It is therefore important to build provisions into the agreement allowing it to be reviewed when children are born and as their needs change over time.
The children’s welfare should always be considered and assessed at each relevant stage.
If you have children from a previous relationship, you should also address them within your estate planning and prenuptial arrangements to help ensure that your property and assets are distributed in accordance with your wishes.
You should be aware that where the Court becomes involved, the welfare and financial stability of minor children will always be a primary consideration.
If the prenuptial agreement is considered unfair in relation to the needs of minor children, certain provisions may not be upheld by the Court.
You should also be aware that you and your spouse cannot contract out of your legal obligation to provide appropriate financial support for your children.
For this reason, prenuptial agreements should work alongside, rather than replace, appropriate wills and estate planning arrangements to ensure that both family wealth and the interests of children are properly protected.
Seek Legal Advice Before Marriage
The above are just some of the important considerations when deciding whether to enter into a prenuptial agreement.
Ideally, couples should seek legal advice several months before their wedding, particularly where the marriage involves different nationalities, overseas assets or multiple jurisdictions. This allows sufficient time for financial disclosure, independent legal advice, negotiation and proper execution of the agreement before the marriage takes place.
If an agreement is to be prepared, it should be completed well in advance of the wedding. As a general guideline, the marriage ceremony should ideally take place at least 21–28 days after the signing of the prenuptial agreement to strengthen the likelihood that it will be regarded as having been entered into freely and fairly.
At James Berry Law, our family law team advises clients on UAE prenuptial agreements, cross-border family law matters, civil marriage agreements, Sharia marriage contracts and international divorce considerations. We can assist in drafting bespoke agreements that reflect your personal, financial and international circumstances while considering their potential enforceability across relevant jurisdictions.
For further information or advice in relation to prenuptial agreements or any family law matters, please contact our family law department at [email protected] or contact Dee Popat at [email protected].
This article provides general information only and does not constitute legal advice. Specific advice should always be obtained based on your individual circumstances and the jurisdictions relevant to your marriage.
