Conclusion of prenup in the vast majority of cases is not intended to limit second of spouses in accessing material resources, but above all reducing economic and tax risks. Before it is concluded, it is worth knowing what this type of agreement really is and what to draw attention to when we make it.
A prenup is a contract between future or current spouses concluded in the form of a notarial act, providing that future spouses will not have a property relationship at the time of marriage. On the other hand, in the event of such a contract being concluded after the marriage has been concluded, the actual spouses are contractually abolishing the existence of a marital union. Therefore, the conclusion of the prenup makes each of the spouses fully liable solely for their own assets and their own liabilities.
Why is there a prenup?
Before marriage there are two personal property – the personal property of a man and the personal property of a woman, while when the marriage is concluded, the law three property — 1) property union, marriage, 2) the personal assets of the husband and 3) the wife's personal assets.
The personal assets of each spouse have been determined under Article 33 k.r.o. In the absence of a prenup, the personal assets of each spouse under the law shall include:
- 1) property acquired prior to the establishment of a statutory association;
- 2) property acquired by inheritance, record or donation, unless the heir or donor decides otherwise;
- 3) property rights arising from a collective partnership subject to separate rules;
- 4) property exclusively intended to meet personal needs one the spouses;
- 5) non-negotiable rights which can only be granted one of the person;
- the items obtained for compensation for personal injury or health disorder or for compensation for harm suffered; however, this does not apply to the pension due to the injured spouse due to a total or partial loss of pay capacity or to an increase in his or her needs or to a reduction in the prospects of success for the future;
- claims on remuneration for work or other gainful activities one the spouses;
- property received from the award for personal achievements one the spouses;
- copyright and related rights, industrial property rights and other rights of the creator;
- property acquired in exchange for personal property, unless otherwise provided in the special provision.
The property which the spouses hold at the time of the marriage shall not enter into the common property. The common assets are, for the other part, benefits generated during the duration of the common interest, even those generated from the property of the separate spouses.
For example, if a spouse has received a donation from his parents in the form of an apartment which he rents and derives an additional income from it, the property remains in the property of the spouse, but the income generated during the life of the partnership belongs to both spouses.
The common assets include, in particular:
- the paid remuneration for the work and income from other gainful activities of each spouse;
- revenue from the common property as well as from the personal property of each spouse;
- the funds collected in the account of the open or staff pension fund of each spouse;
- the amounts of contributions recorded on the sub-account maintained by the Social Insurance Institution.
In the event of a marriage separation in prenup mode only exists two property: husband's personal assets and wife's personal assets. Each of the spouses is liable for their obligations only by their property, of course after prior notification to the creditors (including the State Treasury).
It is then abolished by contract and previously provided for by law, taking into account two other conditions – the tax liability of the taxpayer's spouse for the public-law arrears of the taxpayer (including taxes and compulsory social and health insurance contributions) arising during the business of the entrepreneur - the taxpayer.
Why would married couples need a prenup?
The decision to conclude a prenup primarily eliminates, in the civil sphere, the grounds for marital conflicts on a property basis, in particular where one the spouses are forced to take risky financial decisions due to the way they operate their business.
Having a prenup can also accelerate and facilitate decisions with far-reaching legal and economic implications. It should therefore be stressed that the conclusion of the prenup in the vast majority of cases is not intended to restrict second of spouses in accessing material resources, but above all reducing economic and tax risks.
It is precisely the prenup that limits the satisfaction of the creditors of a given spouse to its corporate and private assets.
If before marriage one the spouses undertake to conduct their business, in accordance with the precautionary principle and the minimisation of risks in their business, they should conclude a notarial property agreement of the spouse on property separation – a prenup. Before the spouse undertakes a single business activity, he should, in his own interest, abolish the notarial agreement of the spouse's property union.
Types and characteristics of the prenup
The spouses have the opportunity to change the family code's property arrangements and to enter into a contract on the basis of which they will decide:
- limit the ownership;
- extend the ownership;
- establish asset separation;
- establish an asset separation with equalisation of earnings.
Non-financial corporations
Determining the separation of assets with equalisation of profits causes the spouses to have no common assets and the management of personal assets to exercise themselves. It is only at the time of the cessation of this system that the acquis is equalised.
After the property separation has ceased, the spouse whose income is less than that second the spouse may demand that the benefits be compensated by payment or transfer of the right. This aims to remove the disparities between the property of spouses. This may be the case, for example, when the husband worked and the wife took care of the house and children.
The spouses must calculate the value of their assets after the contract has been concluded.
For important reasons, each spouse may demand a reduction in the obligation to compensate for the benefits. If the parties do not agree on the manner or level of compensation, the court shall decide.
Positive aspects of prenup
The prenup can be used to secure the family's property situation, especially when a spouse who earns more but also has a higher risk, bestows second a spouse whose income situation is less risky, for example when employed on a contract of employment.
The property of the family generated by the spouses and subsequently accumulated in the one who has a less risky professional situation is largely secured from creditors second The spouse.
The achievement of this result requires that a more risky spouse informs its counterparties that he has concluded a marriage separation agreement (intervention), otherwise the creditors of that spouse may attempt to satisfy their claims from the property second married.
It should also be borne in mind the existence of the so-called Paulian Complaint, which allows the creditor to claim from the recipient spouse – in this case after the expiry of the 5 the period of limitation of the year shall not be intended to satisfy the claims of such a creditor.
The positive aspect of the prenup is therefore to secure the family's assets in the event of debts arising on the side of one spouse and reducing the ground for conflicts in property between spouses.
For those who earn more from their spouses, the positive aspect will also be that all the assets generated by them remain entirely at their disposal, regardless of their position second married.
Another positive aspect of the prenup is the fact that possible divorce proceedings will be greatly facilitated, as there will be no need for long-term and tedious calculations on who and to what extent contributed to the creation of family property.
Often a better earner or only working spouse, in the course of a divorce proceedings, learns that raising children by the other spouse is considered by the courts to be a significant contribution to the creation of family property.
In such a case, the property of the family is divided in such a way that the working spouse receives far less than originally expected.
Negative aspects of prenup
In most cases, the conclusion of prenupping excludes the possibility for spouses to jointly account for personal income tax.
There is also not necessarily a welcome need for settlements between spouses, as general rules resulting from the Civil Code apply to their mutual settlements – e.g. limitation of claims.
Risk on the part of a spouse who gives a gift to protect the family second of spouses, all that he earns, in particular, he/she recovers from the conflict between the spouses.
When deciding to prenup and accumulate assets with a less risky spouse, it should be borne in mind that in the case of divorce proceedings one of spouses can eventually be significantly enriched at the expense of work second The spouse.
The investigation of the return of donations at the stage of the divorce proceedings would be very difficult because such a spouse would have to prove the gross ingratitude of the gifted spouse.
The risk of a less earner’s marriage becoming materially dependent on a spouse earning more, which may lead to marital conflicts.
Summary
A prenup is an agreement between spouses whereby each spouse generates its own assets and is liable for its own liabilities. The prenup may serve as an important element of the family's financial security in the event of debts arising, which could significantly deplete the family's assets.
However, it should be borne in mind that the mere conclusion of a prenup does not exempt spouses from the obligation to inform counterparties of the marriage agreement on property separation and from the fact that a donation to the benefit of second of spouses may be by 5 years after the donation, the subject of a donation procedure to be considered unsuccessful towards the creditor of the donor (Skarga Paulianska).
Author: Maksymilian Kulczycki
The author is a graduate of the Kozminski Academy in the field of Law and Finance and Accounting. From 2022 Associated with Russel Bedford Poland. In 2018 He completed his bar application at the District Bar Council in Warsaw. In 2019 obtained a positive result from the bar exam. His professional interests include the law of commercial companies, in particular mergers and acquisitions, conversions and tax law, in particular corporate income tax.