Of Agreements, Marriage and Common-Law Marriages

March 3, 2020
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The main way of preventing financial disputes in spousal relationships, whether during the relationship or upon its termination, is by a prenuptial agreement. With a married couple Israeli law defines how such prenup may be created, but a question arises when a couple shares a household with no intention of getting married but it is important for them to make a property separation in order to avoid future disputes. In modern times, when relationships can take all kinds of legitimate forms, this question is particularly relevant.
A prenup is an agreement entered into prior to marriage or during marriage and has the validity of a Court verdict. When the agreement is executed before the marriage it may be signed before a notary, but in any other case, in order to achieve the special status, a legal process at the Family Court is required. The law addresses married couples or couples who have a real intention to get married. As a result, “Common-Law Marriage” – couples who are not married even though they share a full spousal relationship, are not empowered under the language of the law to execute a prenup. Nevertheless, as early as 2013, Israeli Supreme Court held that property arrangements of such couples may be registered as prenups, inter alia, through a proceeding at the Family Court. Note that a prenup may always be signed before a notary and thus be given a higher normative status rather than that of a “regular” agreement, although legally it will not be considered a prenup.
Although a prenup may be entered into by unmarried spouses, if at the time the agreement was executed, there was no (yet, or at all) intention to get married, in the event that the couple eventually does decide to do so – the agreement becomes invalid (although in some cases parts of it may continue to apply). For example, a holding of the Tel Aviv District Court given in October, 2019, dealt with a financial dispute between a divorced couple who signed a prenup at a time when they did not have an intent to get married. The Court held that the prenup was invalid, although in that case the couple got married shortly (one and a half years) after the prenup was entered into.
However, as stated above, even a “prenup” that as not duly entered into may have a legal meaning. For example, in a case decided by the Tel Aviv District Court in April, 2018, a trustee in bankruptcy of a man repudiated a prenuptial agreement signed between the spouses and gave the spouse rights in the apartment. The Court held that even if the agreement is not a “prenup” as set by law, because it was signed by a Common-Law Marriage couple, it is still a binding as to the parties property rights.
In any case, whether one decides to enter into a prenup under law or an agreement dealing with similar issues as a Common-Law couple, it is important to ensure that any such document is prepared by a lawyer or a notary public with expertise in the relevant fields, because in any case it is an agreement that obligates the parties for many years. Thus, for example, if there are real estate assets that one wishes to include in such document, expertise in real estate is required, and if one of the spouse has holdings in a company, familiarity with corporate law is required.