Will You Marry Me (oh, but First Sign a Notarized Prenup)?

September 15, 2018
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The article was published in Afik News 266 26.09.2018

A prenuptial agreement is often a source of friction when the demand is raised by one of the spouses (or, in many cases, a parent of one of them) before marriage but is an important tool for preventing future conflicts and is certainly vital when it comes to parties that already own property and they enter a non-marital relationship. Not many know that a prenup can be authenticated by a notary in lieu of a Court proceedings and thus ease the process on all parties.
Israeli law generally establishes a balance of resources arrangement according to which the assets of spouses are considered to belong to both of them equally, regardless of the manner in which such were registered. Thus, for example, an apartment purchased by a married couple and registered on the name of the husband alone, will be considered as an apartment owned by both equally. The balance of resources under law does not apply to assets owned by a spouse on the eve of the marriage or received as a gift or inheritance during the marriage, but when the spouses actually treat such assets as shared assets, the boundaries become blurred. When it comes to spouses who have no intention (at least at this stage) to get married, the balance of resources under law will not apply and the vital need for a prenup becomes much more substantial.
While a prenup applies only to the economic relationship between the parties, it is generally accepted that it also includes provisions regarding the dissolution of the relationship, if necessary, and in the future will save a great deal of distress to all involved. In a case that was discussed several years ago in the Haifa District Court, the Court refused to invalidate a prenup clause setting loss of a right to an apartment to the party opening divorce proceedings holding that it is not against public policy.
A nuptial agreement must be approved by the Court in order for it to be valid (although in certain cases the Courts held that when the parties acted under an unapproved agreement they may still be bound by it), but a prenuptial agreement may be validated by a notary public in a special proceeding under which the notary ensures that the parties have made the agreement by free will and understand its meaning and consequences. A prenup between common-law partners (unmarried couple cohabiting as if they are married) may be approved by a Court, but this is not required by law. However, it is still vital, in order to prevent future conflicts with regard to the validity of such an agreement, that it be drafted and approved by an experienced notary, as the approval of such an agreement by a notary makes it extremely difficult to attack it in the future. However, it is important to note that such an agreement may cease to be binding if the parties later choose to get married and in such a case, a new prenup is to be executed.
Among the advantages of a prenup before a notary public is the ability to formulate the agreement together within a short period of time and without the stressful appearance before a judge at a date set subject to the busy schedule of the Court. However, it is extremely important to ensure that the prenup is formulated and authenticated by a notary with experience in the field because authentication of such agreement by a notary makes it extremely hard to attach in the future, and if the agreement also concerns ownership of corporations or businesses, also having experience in such area – due to the high status of the prenup, saving money when signing it may cost huge amounts in the future. It is safer to pay a little more but know that the rights are well protected.