Suppose you are married in a general or limited community of property based on Dutch law and you intend to draw up a prenuptial agreement. Is that possible and if so, what are the consequences? In this blog I would like to answer these questions.
General vs. limited community of property
Since 1 January 2018 Dutch matrimonial property law has changed. If you got married after this date and did not draw up a prenuptial agreement, you will be married in a limited community of property. If you got married before 1 January 2018 then the general community of property applies.
The general community of property means that from the moment you get married all assets and debts belong to each of the spouses. In the event of a divorce, everything should be divided 50/50. An exception to this is an inheritance or gift that is received under an exclusion clause. This means that the testator or donor has indicated that the inheritance/gift does not fall within the matrimonial community of property.
When there is a limited community of property, this means that everything that was not jointly acquired before the marriage remains private even after the marriage (this applies to both assets and debts) and inheritances and gifts are considered private in advance by virtue of the law. Everything that is built up during the marriage falls into the community of property.
Prenuptial agreement: what does it entail?
A prenuptial agreement has to be agreed upon prior to the marriage to prevent that a general or limited community of property arises between the spouses. A prenuptial agreement is drawn up by a notary and in it you make agreements with each other about financial matters. For example you can make agreements about the way the costs of the household are divided, include a possible annual settlement of income or assets, exclude business assets, make agreements about what happens when one of you dies and so on.
Change to a prenuptial agreement possible?
If prior to your marriage you did not draw up a prenuptial agreement, then depending on the date of your marriage there will be a general or limited community of property. If you decide, for whatever reason, to draw up a prenuptial agreement then this is possible by agreement between you and your partner. Of course it is also possible, when you already have a prenuptial agreement, to change the content of this agreement during the marriage.
Consequences of a change
When there is a change from a general or limited community of property to a prenuptial agreement this previous community of property must be settled financially between the spouses. The amendment of the prenuptial agreement has in principle no retroactive effect except when this amendment takes place within three years after the marriage.
The Dutch legislator has accommodated married couples on this point and has determined that if within three years after the marriage a prenuptial agreement is drawn up, the fact that this has not happened previously is regarded as a misunderstanding. The matrimonial community of property must then be divided so that the spouses are entitled to the property as if they had entered into a prenuptial agreement before the marriage. This arrangement is called the ‘spijtoptantenregeling’ and ensures that no donation tax is levied by the tax authorities.
In addition to the tax consequences, there may also be other consequences to entering into a prenuptial agreement. This depends on your personal situation and for that reason it is advisable to inform yourself on time. A civil-law notary can draw up a prenuptial agreement for you but it is wise to let a family lawyer advise you on the legal possibilities and wishes.
Do you have any questions as a result of the above or do you need advice on drawing up or amending a prenuptial agreement? Please contact me without obligation.