Enforcement issues regarding cross-border prenups
Hello Clients and Friends,
Prenuptial agreements are a useful way for soon-to-be married people to provide themselves with security in the event of a divorce. Enforcement of these agreements is quite simple when both members of a divorcing couple live in the state where the agreement was entered into and where their assets are. But in an increasingly mobile society, it’s likely that post-divorce both spouses might not reside in the same state and assets may be spread across varying states.
This can lead to challenges, since each state has its own laws that govern how courts may interpret and enforce prenups. It can get even more complicated when prenups involve couples from different countries with assets all over the world.
If you are marrying someone with strong ties to another state or country and are considering a prenuptial agreement, it is important to consult with us. We are domestic relations attorneys familiar with the complexities that cross-border prenups may pose.
A particularly critical issue is the choice of jurisdiction to govern the prenup. A prenup is commonly drafted under the law of the state where the couple intends to have their primary residence. But it may not be that simple. Where the couple lives at the time of the marriage may not be where they plan to have their primary residence in the future. They may not even know where that will be. So it’s important to consider where their close personal connections are, any business connections they may have and where the bulk of their assets are located in order to determine which state’s laws they want to have apply.
When a couple is drafting a prenup with cross-border implications, they need to ensure the agreement complies with the law in every possible jurisdiction, meaning where a party lives, where a party does business, where a party holds citizenship and where a party has family contacts and assets. This may even mean the attorney needs to consult with attorneys in other countries to ensure the agreement complies with laws there. Otherwise the prenup could potentially be unenforceable in a place where the couple has significant assets that were supposed to be subject to the agreement.
What if you have a prenuptial agreement drafted in another country but you are getting divorced in the U.S.? Courts here will generally recognize and enforce such an agreement unless it’s written in a way that would render it completely unreasonable. However, there are no guarantees. That’s why it’s so important to meet with a skilled attorney who can counsel you through these issues and of course we continue to invite you to call us for a free phone evaluation of your matter.