Many people have a civil-law notary draw up a marriage contract either before or during the marriage. These often state that there is no community of property whatsoever between the spouses, but that they will be obliged to compensate each other for (part of) the assets accrued during the marriage by means of a settlement.
The Amsterdam annual settlement clause
The Amsterdam annual settlement clause is extremely common. A clause of this sort specifies, briefly, that the parties must anually divide any excess saved income in half, the excess saved income being the income from both parties combined in each year, less all of the domestic costs. In practice, spouses do not compensate each other in relation to their excess saved income each year. This has to be done, however, on a divorce and in practice this has given rise to many legal actions. Say that one spouse receives a bonus from his employer at the end of the year and then buys shares in his employer’s business, which he then keeps in an account at the bank. This is excess saved income. The other spouse then claims half of the bonus, but because the bonus has now been invested in a share portfolio, the spouse actually claims half of the value of the share portfolio at the end of the day. Things become more difficult if one of the spouses buys a house and the parties are jointly and severally liable for the mortgage debt, which is then paid off during the marriage from the parties’ income. We also regularly deal with entrepreneurs who set up a business either before or during the marriage, which then grows over the years and rises significantly in value. Should the value of the business be taken into account in the compensation or do the profits of the business that have been hoarded up come into play? We regularly litigate on these types of issues and closely follow developments in case law.
Advice on preparing the marriage contract
We also regularly provide advice to people who are planning to get married and want to include their specific wishes in a marriage contract. Preparing marriage contracts is customised work, because every situation is different. We can advise people either individually or jointly. It sometimes proves necessary to amend the matrimonial conditions during the marriage, for instance if there is a looming bankruptcy. This is yet another situation in which we can of course provide you with advice and work alongside a civil-law notary if needed. You can avoid many problems and proceedings if a marriage contract is prepared or adapted with care. It therefore makes sense to obtain advice in good time.