Currently, to limit the risks of a property dispute between spouses upon divorce, one of the solutions that the parties may consider is to establish an agreement on the matrimonial property regime, which is often called a Prenuptial Agreement (“PA”). PA is a special type of contract, whereby spouses can agree on ownership rights and decisions on the property of spouses during the marriage period.
Through this article, BLawyers Vietnam would like to present the legal perspectives on the necessity of the PA.
1. What is the PA?
Although the PA is relatively popular in many countries, the Vietnamese legislation on marriage and family does not mention the PA term. The PA is just the usual, conventional calling of the written agreement on the matrimonial property regime.
It can be understood that the PA is a type of contract in which the subject is a couple before marriage, established to agree on legal matters such as the division of common property, separate property during the marriage period, or related to the determination of custody and property division upon divorce. The PA is only valid when the two parties registered their marriage.
In terms of substance, depending on the laws of each country, couples may or may not be allowed to agree on certain issues. However, the PA usually includes the following main contents:
- Determination of common property and separate property of the spouse created before or during the marriage period;
- Responsibilities of spouses in sharing finances, caring for children, and daily living or the other’s family;
- Responsibilities for personal debts;
- Principles of property division between spouses in the event of divorce
- Responsibilities for the stepchildren of the spouse (if any); and
- Responsibility for nurturing and subsidizing children after divorce.
Although there are no specific regulations governing the PA in the law of Vietnam, it still allows spouses to agree on the property regime of the couple after marriage as long as this agreement is not contrary to the provisions of law. The PA can be considered as a type of binding agreement on legal responsibilities between the parties upon signing.
2. Effective conditions of the PA
Couples should consider the following issues to ensure that the PA complies with the law:
(i) The time and form of establishment of the PA
The spouses must sign the PA before marriage. They must then get the PA notarized, or certified at competent agencies or organizations. The property regime of spouses under the PA shall be established from the date on which the two parties complete the marriage registration procedures.
Of note: The notary organizations could refuse to notarize contents that are out of the agreement on the matrimonial property regime.
(ii) The effective conditions of the PA
The PA does not fall into cases where the Court declares partial or entire invalidity for reasons such as:
- Violating the conditions for taking effect in accordance with the provisions of the Civil Code and relevant laws, such as:
- Either party does not have the appropriate civil act capacity, or is deceived, threatened, coerced; or
- The purposes and contents of the PA violate the prohibitions of the law, contrary to social ethics.
- Violating Law on Marriage and Family relates to the following elements:
- General principles on the property regime of spouses;
- Rights and obligations of spouses in meeting the essential needs of the family;
- (iii) Transactions relating to the sole residence of the spouses; and
- (iii) Transactions with third parties related to bank accounts, securities accounts, and other movable property without registration of ownership and use right.
- Seriously violating the right to alimony, the right to inheritance, and other legitimate rights and interests of fathers, mothers, children, and other members of the family.
3. Necessity of the PA
The PA has implications for the property regime of spouses:
- The PA will assist spouses in clearly distinguishing which properties are separate properties, and which properties are common. It also determines the rights and obligations of the parties to the spouses’ property, ensuring that civil transactions by the property of each person are guaranteed to be performed and each person can be responsible for that property;
- The PA is the basis for resolving disputes over property between husband and wife during a divorce, if there is a PA, the Court may resolve it quickly when the spouse requests the division of property; and
- The PA helps to ensure the legitimate rights and interests of the third party when participating in transactions involving the property of the spouses. The third-party can assess the risks when they conduct transactions with one spouse.
The above are the notes on the agreement on the property regime before marriage and the necessity of this agreement from a legal perspective.
Should you have any questions about the above contents, please revert to BLawyers Vietnam at email@example.com. We are more than happy to hear from you!
Date: 27 May 2022
Writer: Linh Nguyen
Maybe you want to read: