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09 Jun

In the past, the end of a marriage was usually the result of the death of a spouse. However in the modern world, an increasing amount of marriage dissolutions are the result of a divorce. In order to preserve your personal assets and avoid financial disputes, a marital agreement is routinely becoming a common occurrence prior to marriage. A marital agreement can prevent a lengthy and expensive divorce. Furthermore, a marital agreement can protect the assets and debts of one spouse against the other spouse.

Both Germany and Thailand allow marital agreements to specify the division of assets and debts in case of the termination of a marriage. However in Thailand, marital agreements have to be signed and registered with the local district office with the registration of the marriage. In Germany, the marital agreement can be created at any time prior (prenuptial) or after the marriage (postnuptial). In Germany, marital agreements only need to be notarized. While in Thailand, there are formal requirements for the proper signing and registering of a marital agreement.

In Germany, in case the spouses do not choose a different property regime, the spouses live in a community of accrued goods (“Zugewinngemeinschaft”). This community is best explained with an example:

Mr. A and Mrs. B want to marry. Mr. A has assets amounting to 5,000, while Mrs. B has assets amounting to 8,000.

Assets Mr. A before marriage: Assets Mrs. B before marriage:
5,000 8,000

Mr. A and Mrs. B marry. During the marriage, Mr. A gains 20,000, while Mrs. B is not working as much and only gains 2,000. So, the assets of the spouses within the marriage are summed up in the following amounts:

Assets Mr. A within marriage: Assets Mrs. B within marriage:
5,000 + 20,000 = 25,000 8,000 + 2,000 = 10,000

Mr. A and Mrs. B get divorced. Within the community of accrued assets, the gains within the marriage are distributed between the spouses. First, the gains of each spouse within the marriage needs to be calculated.

Mr. A now has assets amounting to 25,000, the assets of Mrs. B amount to 10,000.

Since the assets of the spouses prior to marriage are not counted (only the gain during the marriage counts), their accrued gain within the marriage is calculated in the following manner:

Accrued gain of Mr. A within the marriage: Accrued gain of Mrs. B within marriage:
25,000 – 5,000 = 20,000 10,000 – 8,000 = 2,000

The assets of Mr. A gains within the marriage exceeded the gain assets of Mrs. B by the amount of 18,000 – (20,000 – 2,000 = 18,000).

Mrs. B is entitled to claim a portion of the exceeded amount. She is entitled to claim half of those assets. As a result, Mrs. B is entitled to claim 9,000 (18,000 / 2 = 9,000) from Mr. A.

As you can see, within the community of accrued goods, the assets of the spouses stay separated. After the end of the marriage, the increased value of the assets will be compared. If the assets of one spouse increased value exceeds the assets of the other, then the difference is distributed between the spouses. Courts will also compensate for the loss of value due to inflation. Some assets gained, like gifts to one spouse or inherited assets, are not added to the gains.

By setting up a marital agreement, the spouses may deviate from the default property distribution. Either they can choose a total separation of property or the all the assets are part of the community of property. Or they can predetermine the percentage of the distribution of the property. For example, they can modify the obligation for spousal maintenance or even modify or eliminate the ratio of the equalization of the accrued gains. In addition, the marital agreement can choose the applicable jurisdiction for the divorce.

Within the marital agreement, since June 2012, according to the Rom-III Statute, in Germany the parties can choose the jurisdiction applicable in case of divorce.

However, similar to the Thai regulations on marital agreement, in Germany it is void, if the marital agreement violates a legal prohibition or the good morals. A marital agreement violates good morals, if it is extremely one-sided and only considers the economical interests of one spouse.

In case of an extreme imbalance of property distribution as a result of the initial marital agreement, the marital agreement can be declared void in total. If circumstances changed during the marriage which makes the initial agreement unreasonable, courts can modify the marital agreement.

In addition, an agreement is void if it is detrimental to non-participants of the agreement (for example, child support cannot be eliminated by a marital agreement). Courts in Germany will always check for the validity of the marital agreements to ensure that it is applicable to German law.

Thai regulations for marital agreements are different from marital contracts in Germany. Germany recognizes Thai marital agreements. For example, Thailand may not recognized German marital agreements if the agreement was not signed prior to the marriage and registered with the local provincial district. However Thai law allows greater deviation and options in its marital agreements than in Germany. It is advisable that all marital agreements contain a choice of law and jurisdiction to ensure enforcement. If you plan to marry in Thailand, make sure to seek legal advice before entering the bonds of marriage.

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