Insights

Ningbo prenuptial property agreement 5 types of valid 3 types of invalid terms

Ningbo Author：LuXu WANG

Signing a property agreement before getting the license is nothing new in Ningbo now, especially for second-married families, family businesses or combinations with large economic gaps between the two sides. However, when disputes really arose, many agreements were found to be invalid in part, and even the entire document was useless. The problem is often not whether to sign or not, but what to write, how to write, and whether there is a hand that can be executed.

The legal effect basis of the 1. property agreement.

Article 1065 of the the People's Republic of China Civil Code provides that a man and a woman may agree that property acquired during the marriage and pre-marital property shall be owned by each, jointly or partly owned by each or partly jointly owned, and that the agreement shall be in writing. The agreement between the husband and wife on the property acquired during the marriage and the pre-marital property shall be legally binding on both parties.

1. Three optional property-based models

separate ownership means that the property and income under their respective names are not mixed, common ownership includes pre-marital property in the common scope, and part of each part of the common is the most commonly used compromise, such as the agreement that the property belongs to each other and the wage income after marriage belongs to the common ownership. Which one to choose depends on the property structure and trust base of both parties.

2. Limitations on the effectiveness of creditors

if the agreement is owned separately, the debts incurred by one of the spouses to the outside world shall be paid off with the personal property of that party if the relative knows the agreement. In other words, in order to have an internal agreement against an external creditor, it must be shown that the creditor was aware at the time of the transaction and that the agreement alone is not sufficient. This is why many agreements fail in debt disputes.

2. five categories of terms that can be agreed upon and are valid

as long as it revolves around property tenure and economic arrangements, the validity of the provisions is generally not an issue, the key is to be sufficiently specific.

1. Clear division of ownership and income.

First, the ownership of their respective pre-marital real estate, vehicles, deposits, and equity; second, the ownership of the fruits and natural appreciation of pre-marital property after marriage; third, the distribution of post-marital wages, bonuses, and operating income. In the case of real estate, the location and ownership certificate number shall be stated; in the case of equity, the name of the company and the proportion of shareholding shall be stated.

2. Rules for the allocation of expenditure and debt.

Fourth, the proportion of the family's daily expenses, children's education and alimony. The terms of the debt are particularly important, as they determine the exposure of one party to the risk of a future business failure.

3. three categories have written clauses that will not be supported.

The invalidity clause focuses on the part that attempts to restrain the freedom of identity by means of property, which is the most common misunderstanding in the drafting of the agreement.

1. Restrictions on personal freedom and freedom of marriage

the agreement shall not propose the dissolution of the marriage relationship, must give birth within a specified period of time, or restrict the employment or personal dealings of one party. Such content interferes with the personal freedom and freedom of marriage protected by law, which is an invalid clause, and the writing of the agreement is not binding.

2. Disposition of children's rights and evasion of legal obligations

agreements on the attribution of child support and exclusion of visits by the other party, an agreement that one party will not bear maintenance or alimony, and an agreement to waive the right of inheritance that may be acquired in the future and deprive the legal rights, are either related to the interests of third parties or inconsistent with legal obligations and are usually not supported. In addition, arrangements for malicious evasion of external debt in the form of agreements may also be found to be invalid.

4. loyalty clause and the boundary of the effectiveness of clean-out.

This is the most frequently asked and most easily overestimated clause in the consultation. We need to look at the moral and legal aspects separately.

1. The status penalty clause is not enforceable.

A prenuptial agreement can only agree on matters such as the respective property status, category and value of both parties, and cannot agree on matters related to identity, such as no derailment, no divorce and corresponding punishment measures. Loyalty between husband and wife belongs to the category of emotional morality, and such agreements should not be given enforcement effect.

2. Feasible practices for conversion to property clauses

if there is such a claim, an attempt could be made to convert it into a property arrangement without status conditions, such as a direct agreement that a particular property is owned by a party, without a penalty mechanism that is triggered by the act. At the same time, it should be made clear that if there are legal circumstances such as bigamy, cohabitation with others, and domestic violence, the innocent party can claim damages in accordance with the law without relying on the terms of the agreement.

5. written form and the role of notarization

the formal elements, seemingly procedural, actually determine whether the agreement can stand at the dispute stage.

1. Writing is the entry into force element.

Property agreements must be in written form, and oral agreements are not valid in principle. It is suggested that both parties hold one original copy, sign page by page and indicate the date and place of signing, list the attached pages of the property list and sign the same to confirm, so as to avoid disputes over the authenticity of the contents in the future.

2. Notarization solves the problem of proof.

Notarization is not a necessary condition for the agreement to take effect, but the notary office will verify the identity of both parties and examine the authenticity of the meaning, which can greatly reduce the difficulty of proof in the event of a dispute. If the property is large, involves the equity of the enterprise or there is opposition from family members of one party, it is recommended to notarize and retain the image data of the signing process at the same time.

Performance and Change after 6. Signing

the agreement can not be put on the shelf after signing, and the traces of performance and subsequent maintenance will also affect the final effect.

1. The actual performance of the confirmation agreement.

If it is agreed to be owned separately, separate accounts should be set up and assets should be managed separately to avoid long-term mixing of income into the same account, which makes it difficult to split. If it is agreed that a certain expenditure shall be borne by one party, the bank transfer shall be made as far as possible and the purpose shall be noted. The actual state of performance that is not consistent with the agreement over a long period of time may be deemed to be a change in the original agreement by the parties by their conduct.

2. Normative practices for changes and additions

if the situation changes and needs to be adjusted, a written supplementary agreement shall be signed, stating the number and new content of the changed terms, and signed and confirmed by both parties, and the rest of the original agreement shall continue to be valid. Major changes are proposed to be notarized together to avoid multiple texts with conflicting contents.

7. case proof

in practice, the two parties sign a written agreement before registering the marriage, agreeing that their pre-marital property will be owned by them, and the post-marital wage income will be managed separately according to the agreed proportion. After the division dispute was brought to the court, the court reviewed the signing process of the agreement, the authenticity of the signatures of both parties and the actual performance status after marriage, determined that the property ownership clause was the true intention of both parties and did not violate the mandatory provisions of the law, supported it, and determined their respective shares accordingly. In similar cases, the amount of division or compensation is usually in the range of $100000 to $3 million, depending on the size of the property and the circumstances of the evidence.

In practice, the agreement also stipulates that if one party commits infidelity, he or she will leave the house. The court held that such clauses involved status relations and punitive arrangements, which were beyond the scope of property agreements that could be adjusted and should not be given enforcement effect, and therefore did not support the clause; however, the provisions of the agreement on the ownership of their respective premarital property were not affected and remained as agreed. At the same time, it is pointed out that if there is a statutory fault situation, the no-fault party may separately claim damages in accordance with the law. In similar cases, the amount of division or compensation is usually in the range of $100000 to $3 million, depending on the size of the property and the circumstances of the evidence.

8. Risk Alert

  • the agreement only writes that the property belongs to each other without a specific list, and the scope of the subject matter cannot be determined at the time of the dispute, and the terms are almost empty.
  • The agreement is owned separately but shares one account for a long time, the income is highly mixed, and the actual performance status deviates from the agreement.
  • The identity penalty clause as the core guarantee, once it is found to be invalid, the overall protective effect is greatly reduced.
  • Attempts to fight external creditors with internal agreements, without retaining evidence of the creditor's knowledge of the agreement, are still required to be paid off with common property.
  • After the signing has never been updated, the family property structure has undergone significant changes and the content of the agreement is seriously lagging behind.

9. FAQ

does a prenuptial property agreement have to be notarized to be valid?

It's not. The law requires written form and notarization is not an entry-into-force requirement. However, the notary public will verify the identity and examine the authenticity of the meaning, which can significantly reduce the difficulty of proof in the event of a dispute, and if the property is large or involves the equity of the enterprise, it is recommended to conduct notarization.

Is it useful to write in the agreement that if you cheat, you will leave the house clean?

Such provisions relate to identity relationships and punitive arrangements and are generally not given enforcement effect. However, the provisions of the agreement on property ownership are not affected and remain in force. If there are legal circumstances such as bigamy, cohabitation with others, domestic violence, etc., the party without fault can claim damages in accordance with the law.

It is agreed that each property will be owned by each other. Do I have to pay back the debt owed by the other party?

It is not committed internally, but externally it depends on the knowledge of creditors. If the agreement is owned separately, the debt incurred by one party to the outside world, and the relative person knows the agreement, shall be paid off with the personal property of that party. It is therefore important to leave a written trace in the transaction that the creditor is aware of the agreement.

Can the agreement signed before marriage be changed after marriage?

You can. If both parties reach an agreement through consultation, they may sign a written supplementary agreement to change it, stating the number and new content of the changed terms and signing for confirmation, and the rest of the original agreement shall continue to be valid. Major changes are proposed to be notarized together to avoid multiple texts with conflicting contents.

Practical Experience of 10. Lawyers

signing a property agreement before getting a license is nothing new in a second-married family, a family business, or a combination with a large economic gap between the two parties. However, when disputes really arise, many agreements have been deemed invalid. The problem is often not "whether to sign or not", but "what to write, how to write, and whether there is a hand that can be implemented". In practice, the provisions surrounding property ownership and economic arrangements are generally valid, the more specific the better, while the part that attempts to use property to restrain personal freedom is most likely to be invalidated. Remember this dividing line first, and you will avoid many detours when drafting.

The clauses around property ownership and economic arrangements are generally valid, and the key is to write them in sufficient detail: write down the ownership of pre-marital and post-marital property, and write down who should own the fruits and natural appreciation of pre-marital property after marriage; Write down the sharing ratio of daily expenses, children's education and alimony; Arrange the internal commitment of their respective debts and large debts after marriage; Arrange financial assistance when one party has difficulties in life; and make arrangements for the disposition of specific property. Description of the location and warrant number involving real estate, and description of the company name and shareholding ratio involving equity. The more specific the provision, the fewer general expressions such as "owned by each" and the less likely it is to be implemented in separate terms.

The red lines of invalidity are concentrated in three categories: restrictions on personal freedom and freedom of marriage, such as agreements not to file for divorce and to have children within a specified period of time; agreements to the detriment of creditors for the purpose of avoiding debt; and agreements to treat identity acts as conditions for the entry into force of property terms. There is also a kind of easily misunderstood "loyalty clause, clean body and leave home". The validity boundary depends on the content. If it is not well written, the whole agreement may be discounted. When signing the negotiation, you can seize the "sense of security" that both sides care about to push forward, but don't set up an online template to save money and trouble-the fancy punitive clauses in the template are precisely the high-risk areas that will be invalidated in the future.