When dealing with French-Hong Kong cross-border marriages, the question that we get asked on a regular basis is: which is best when choosing between a French marital contract or a common law pre-nuptial agreement? It is safe to say that there is no clear-cut answer to this question: it all depends on the personal situations of the two parties.
Why enter a marital contract?
For French nationals, the question is not why they need to enter a contract prior to marriage, but rather which kind of contract will be more suitable for their situation.
For citizens of Hong Kong, parties may be less aware of the importance of a pre-nuptial agreement, reluctant to raise the issue, or indifferent to its benefits.
In our view, forward financial planning serves a two-fold purpose: (1) it provides a couple the opportunity to identify how they will handle their finances during the marriage; and (2) it can ease the pain of a divorce, should the partners later decide that they wish to uncouple.
What are the legal issues?
With a cross-border marriage, there are challenges in trying to draft a suitable marital contract or pre-nuptial agreement. There are no international rules and solicitors are normally only familiar with the rules and laws governing their practising jurisdiction. In some ways, the important questions are: where do you live and where do you intend to live?
A French-Hong Kong couple living in France and intending to stay in France should likely use a marital contract. A couple living in Hong Kong and intending to stay in Hong Kong should likely use a pre-nuptial agreement.
The complication is when a couple is not rooted in one jurisdiction or the other, or if they intend to move from one jurisdiction to the next during their married life, before picking a jurisdiction where they will retire.
What is the applicable law?
In France, marriage contracts are governed by a combination of the French Civil Code, which deals with matrimonial regimes, and a European Union (“EU”) regulation enforced since 29 January 2019.
In Hong Kong, pre-nuptial agreements are recognised by case law, not by legislation. The first decision of importance was the English case of Radmacher v Granatino in 2010, which established that pre-nuptial agreements are enforceable. In the 2014 decision in SPH v SA, the Hong Kong Courts followed the ruling in Radmacher, paving the way for wider acceptance of pre-nuptial agreements, but the jurisdiction of the Courts is not completely ousted.
What are the differences between marital contracts and pre-nuptial agreements?
French civil matrimonial law is based on the notion of a matrimonial regime, which does not exist in common law. Marital contracts govern the parties’ assets only. Thus, when parties divorce, the Court will apply the marital contract to divide the parties’ assets, but will rule on custody, support of children and spousal maintenance based on circumstances of the case at the time of the hearing.
In Hong Kong, a pre-nuptial agreement can be broader than the marital contract and can include provisions regarding maintenance. A pre-nuptial agreement can also provide for the custody and care of children, but Courts can disregard those provisions if they are not in the best interest of the children. Thus, unlike France, a Hong Kong Court retains discretionary power to determine whether the pre-nuptial agreement should be enforced and/or whether a particular section should be excised.
What are the practical considerations of marital contracts and pre-nuptial agreements?
In France, only one professional is responsible for drafting the contract, the Notary. The Notary can act on behalf of both parties. In the common law system, each party should be separately represented by independent counsel, which is a factor in considering enforcement of the instrument.
Under the new EU regulation, if one party is a citizen from an EU member state which has ratified the EU regulation on matrimonial regimes, that citizen will have to comply with the formal requirements set out by the ratifying country.
Finally, one must bear in mind that a marital contract or a pre-nuptial agreement must be reassessed on a regular basis, at least every time there is a change in your personal or professional circumstances: inheritance, birth, job change, job loss, or international move.
If you are planning to get married soon, what should your next move be?
We would advise you to meet with a lawyer to determine how to best protect your assets.
Ideally you need to seek advice from law professionals of both jurisdictions. This is why a firm which deals with cross-border cases on a regular basis, such as JC Legal, is a good choice. We can advise you on the law of both jurisdictions and make sure that the finalised contract will protect your interests in both jurisdictions.
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