When should you consider a prenup in Germany?
Like many countries, Germany allows prenuptial agreements which can simplify asset division if marriage ends in divorce. Not every marrying couple needs one, but there are certain cases where it makes sense, a German lawyer told The Local.
German family law and asset division following divorce typically follows one main rule that can be summed up like so: "What you bring in, you take out."
This means that any assets either partner brings into the marriage on the day it takes place remain their assets if a divorce happens.
This differs from some other countries, where any assets either partner brings into the marriage could also be fair game for 50-50 division if they divorce and no prenup exists. People living in these countries may well want to sign a prenup simply stating that what each partner brings in, they take out.
In Germany though, this is the legal situation by default. That's why even two partners entering into a marriage in Germany on an unequal financial footing might still decide they don't need a prenup.
There are some notable caveats to this though - and knowing them may influence whether you decide to go for a prenup or not.
The 'community of accrued gains'
After two people get married in Germany, anything either one of them gains becomes subject to 50-50 division if a divorce happens and there's no prenup. But this depends on the status of certain assets and whether a gain has been realised on that asset or not.
For example, let's say one partner enters a marriage in Germany with a €300,000 flat solely in their name and €5,000 in their bank account. Let's then suppose that after five years of marriage, this person chooses to divorce their partner, still owning the flat and then having seen their bank account grow to €30,000. In this case, their contribution to the "community of accrued gains" under German law would be €25,000. The flat and the €5,000 they brought into the marriage would remain theirs.
Property that either partner brings into the marriage usually leaves with them in divorce even if there's no prenup in Germany. But selling it during the marriage is a different matter. Photo: Larry Penaloza/Pexels
The situation changes though if that partner sold the flat in question during the marriage and it gained in value. Let's say that partner sold that €300,000 flat for €500,000. In the event of a divorce, they would keep the first €300,000, but the €200,000 increase would be subject to the "community of accrued gains" and thus fair game for division.
If that partner wanted to preserve any future gains in the value of their flat, they might well consider a prenup in Germany.
There is one notable exception to the community of accrued gains, which applies when one partner inherits or is gifted something. The base value of anything that partner inherits remains theirs in the event of a divorce. If it gains in value over the course of the marriage though, it becomes subject to division. So a partner who inherits a €400,000 stock portfolio from a parent would keep that first €400,000 in the event of a divorce. If the portfolio gained €200,000 in value in the meantime though, it would be subject to division.
Who else might want to consider a prenup in Germany?
"Anyone who comes into a marriage with children from a previous marriage - so patchwork families - and you want to make sure those children want to receive certain assets, you might want to consider a prenup," says Andreas Moser, a Chemnitz-based lawyer specialising in German citizenship, immigration, and family law.
Moser also says small business owners - especially professionals like doctors and lawyers who might have their own practice, should certainly consider a prenup. Otherwise they run the risk of having to liquidate their business in a divorce in order to pay out their ex.
What needs to be in a prenup?
"There's no standard form or list of things that you need to include. You can really cover whatever you want for your marriage," says Moser. "But they must be fair."
This means that a German court may throw out a completely one-sided prenup. It's also likely to throw out anything one partner signed under duress. That's why it's typically important to discuss a prenup with plenty of lead time before the wedding - in order to prove that both partners had plenty of time to consider the implications of what they signed.
Prenups in Germany typically cover spousal support, property, and retirement benefits. They cannot cover child custody.
One thing to note here is that foreign citizens in Germany can specify that they wish the law of their home country to apply. If they do that, this needs to be specifically stated in the prenup, otherwise German law will apply by default.
EXPLAINED: How does shared custody after divorce work in Germany?
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German family law and asset division following divorce typically follows one main rule that can be summed up like so: "What you bring in, you take out."
This means that any assets either partner brings into the marriage on the day it takes place remain their assets if a divorce happens.
This differs from some other countries, where any assets either partner brings into the marriage could also be fair game for 50-50 division if they divorce and no prenup exists. People living in these countries may well want to sign a prenup simply stating that what each partner brings in, they take out.
In Germany though, this is the legal situation by default. That's why even two partners entering into a marriage in Germany on an unequal financial footing might still decide they don't need a prenup.
There are some notable caveats to this though - and knowing them may influence whether you decide to go for a prenup or not.
The 'community of accrued gains'
After two people get married in Germany, anything either one of them gains becomes subject to 50-50 division if a divorce happens and there's no prenup. But this depends on the status of certain assets and whether a gain has been realised on that asset or not.
For example, let's say one partner enters a marriage in Germany with a €300,000 flat solely in their name and €5,000 in their bank account. Let's then suppose that after five years of marriage, this person chooses to divorce their partner, still owning the flat and then having seen their bank account grow to €30,000. In this case, their contribution to the "community of accrued gains" under German law would be €25,000. The flat and the €5,000 they brought into the marriage would remain theirs.
The situation changes though if that partner sold the flat in question during the marriage and it gained in value. Let's say that partner sold that €300,000 flat for €500,000. In the event of a divorce, they would keep the first €300,000, but the €200,000 increase would be subject to the "community of accrued gains" and thus fair game for division.
If that partner wanted to preserve any future gains in the value of their flat, they might well consider a prenup in Germany.
There is one notable exception to the community of accrued gains, which applies when one partner inherits or is gifted something. The base value of anything that partner inherits remains theirs in the event of a divorce. If it gains in value over the course of the marriage though, it becomes subject to division. So a partner who inherits a €400,000 stock portfolio from a parent would keep that first €400,000 in the event of a divorce. If the portfolio gained €200,000 in value in the meantime though, it would be subject to division.
Who else might want to consider a prenup in Germany?
"Anyone who comes into a marriage with children from a previous marriage - so patchwork families - and you want to make sure those children want to receive certain assets, you might want to consider a prenup," says Andreas Moser, a Chemnitz-based lawyer specialising in German citizenship, immigration, and family law.
Moser also says small business owners - especially professionals like doctors and lawyers who might have their own practice, should certainly consider a prenup. Otherwise they run the risk of having to liquidate their business in a divorce in order to pay out their ex.
What needs to be in a prenup?
"There's no standard form or list of things that you need to include. You can really cover whatever you want for your marriage," says Moser. "But they must be fair."
This means that a German court may throw out a completely one-sided prenup. It's also likely to throw out anything one partner signed under duress. That's why it's typically important to discuss a prenup with plenty of lead time before the wedding - in order to prove that both partners had plenty of time to consider the implications of what they signed.
Prenups in Germany typically cover spousal support, property, and retirement benefits. They cannot cover child custody.
One thing to note here is that foreign citizens in Germany can specify that they wish the law of their home country to apply. If they do that, this needs to be specifically stated in the prenup, otherwise German law will apply by default.
EXPLAINED: How does shared custody after divorce work in Germany?
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