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MARRIAGE

What you need to know about getting a prenup in Spain

A prenup is typically an agreement made between a couple before they marry, stating each person’s rights to assets should the marriage fail, but what happens if you want to get one in Spain, how do you go about it and what do you need to know?

Published: 13 March 2023 17:18 CET
What you need to know about getting a prenup in Spain
What you need to know about prenups in Spain. Photo: thehkphotocompany / Unsplash

The latest data available from Spain’s National Statistics Institute (INE) shows that in 2021 there were 86,851 divorces, 12.5 percent ​​more than in the previous year. Joint custody was granted in 43.1 percent of the cases of divorce and separation of couples with children. 

Prenups are not as popular in Spain as they are in some countries such as the United States or Japan, but although are not expressly regulated in Spain, they have been recognised on several occasions by the courts.

What is a prenup?

A prenuptial agreement is a way of protecting financial wealth or indeed setting how assets should be divided, in the case that you decide to divorce later on down the line.

The agreements can prevent the courts from becoming involved and limit the need for lawyers too.

Article 90.2 of the Civil Code states: “There is no legal prohibition against prenuptial agreements and the emphasis must be placed on their limits, which are in the protection of the equality of the spouses and in the interest of minors, if any”.

It establishes that they will only be legal and be upheld if they are not harmful to minors or seriously harmful to one of the spouses.

Prenups in Spain are not only used for divorce however, they could be used in the event of separation, annulment of the marriage or death.

Who can sign a prenup in Spain?

You can only sign a prenup in Spain yourself, you can’t get someone else to do it for you. You must be of legal age which is 18, or 16 with judicial consent. You must also prove that you’re of sound mind.

People with incapacity can also sign a prenup, up to a certain extent. If authorised, they can ask for help from their parents, guardian or legal representative.

In Spain, a prenup can be signed before you marry or indeed at some point during your marriage and it can always be modified or changed, as long as both partners agree.

Be aware though, if you sign a prenup before you marry, it is only valid if you marry within one year.

Read Also: Civil union or marriage in Spain: which one is better?

What is included in a prenup?

The document can help you answer several questions ahead of time if the need arises, such as: who gets the car? How is the money you have in the bank going to be distributed? Are you responsible for each other’s debts?

There are different types of agreements available which include:  

  • Absolute Separation of Property: Each spouse separately retains ownership of all their property before and after the marriage.
  • Profit Sharing: Profits earned from the marriage are common property. In case of separation or divorce, property is shared equally.
  • Participation regime: Each spouse has the right to gain from the profits obtained by the other when the regime is in force.
  • In Spain (except in Catalonia) the marital property regime is applied by default when there are no prenup marriage agreements.

It is true that prenups typically regulate financial assets, but they can be used to regulate any part of a marriage.

They could be used to stipulate what will happen should one of the partners pass away or they might stipulate what each partner should do in case of a matrimonial crisis.

For example, they could be used to decide on the custody of children or where they will live. It’s worth keeping in mind, however, that the decision in the prenup regarding children may not always be upheld by a judge.

The custody decision will be based solely on the welfare and interests of the child, so if you signed a prenup to say you will get joint custody, but the judge believes it will be harmful if the child stays with the father for example, the ruling might be different.  

How is a prenuptial agreement drawn up in Spain?

To make a prenuptial agreement you should contact a lawyer specialising in family law and prenuptial agreements. They will advise you on the procedure and write it up for you. They will also:

  • Advise on the economic regimes of marriage provided by law and choose the one that best suits your needs.
  • Explain the consequences of the measures you include and their feasibility.
  • Ensure that the clauses reflect the agreements.
  • Check that none of the clauses conflicts with the law.

The prenuptial contract must be registered in the Civil Registry and must be signed before a notary. And in case of any clauses relating to real estate, any changes must also be communicated in the Mercantile or Property Registry.

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PROPERTY

Property in Spain: What happens when there’s a divorce?

It's something of a nightmare scenario but one that happens to a lot of married couples. You've bought a property together, perhaps have a mortgage, but now you're getting divorced -- what happens next?

Published: 13 October 2023 14:53 CEST
Property in Spain: What happens when there’s a divorce?

It’s far from ideal but something that unfortunately happens to many married couples: a divorce.

Of course, divorces can be complicated by all sorts of different things. Is it amicable? Do you have children? Did you sign a prenup? And, of course, do you have property together?

READ ALSO: What you need to know about getting a prenup in Spain

Property in particular — who owns it, who is legally entitled to it, who will keep it, who takes on the mortgage — can cause friction in what is often an already tense time in many people’s lives.

So, what are the rules, and what happens to property in Spain when there’s a divorce?

What happens to property when there’s a divorce in Spain?

The short answer is, it depends.

In the simplest scenario where there are no children and the spouses each own equal shares of the property, there may be an agreement to sell the property and divide the proceeds equally.

What happens to the mortgage?

Maybe you’ve got a mortgage. Maybe it’s shared, maybe it’s in one person’s name. So what happens to it in the case of a divorce?

Technically speaking, if the loan agreement is signed under both names then both people should continue to pay the monthly fees and the financial institution may claim the payment from both holders. Josep Vera, director of business development of Hipotecas.com, told El Economista that “the people who appear on the loan and own the home will continue to maintain their obligations whether they are married or divorced.”

In simple terms, the people who signed up to the mortgage contract and appear as debtors on the loan agreement must pay it, regardless of whether they are married, divorced, or in the process of getting divorced.

However, it’s not exactly that simple, and there are legal options to work around this. In this case, both spouses can agree on the distribution of assets and decide who keeps the mortgage. If one person assumes the loan, you may be best served to ask the bank for a mortgage restructure. However, note that some banks may reconsider the terms of the mortgage offer depending on the different financial positions of each party and how the change in contract could potentially affect the repayment of the loan.

What about the kids?

If you have kids, they can also play a role in property division.

Put simply, child custody (and who has it) directly affects the use of the house and the mortgage. As a general rule, in Spain children stay in the family home with the parent who has been granted legal custody, although the payment of the mortgage, in these cases, will be borne by the owner whether or not he resides in the house or has custody or not.

So, in theory, you could be the mortgage owner but if you don’t have custody of your children, you will be paying the mortgage on a property you don’t live in.

READ ALSO: Civil union or marriage in Spain: which one is better?

Extinción de condominio

Another option and something fairly common in Spain when it comes to property and divorce disputes (and in shared properties more generally) is an extinción de condominio. We can translate this roughly as liquidation or dissolution of co-ownership, although it is sometimes referred to a dissolution of joint property ownership.

What is an extinción de condominio?

An extinción de condominio essentially means liquidating the common ownership of a property. There are generally two ways to do it: through an amicable agreement or through a legal procedure that leads to the forced sale of the property.

With an agreement

One of the possible solutions is an extinción de condominio with an agreement if one party decides they want to sell their part and is financially compensated by the other.

For example, if your ex-partner wants to keep the property and you don’t, one possibility is the transfer of your part to them in exchange for the financial equivalent. This is one of the simplest ways to do it.

Of course, you could also decide to sell the property and split the profit between you.

Without agreement

This is where things can potentially get a bit messy. An extinción de condominio without a prior agreement likely means a legal dispute and auctioning of the property in front of a judge.

Spanish legal experts recommend that it is always better to reach an agreement before it gets to this point. This is basically when one party does not agree and legal proceedings for an forced dissolution of ownership begin.

Tax benefits

However, there are some potential tax benefits of getting an extinción de condominio. Although one of the co-owners “acquires” the part of the other, from a tax point of view this is not taxed as “a sale” in the way a typical property purchase would be.

Whereas property sales can be taxed at roughly 6-10 percent, depending on the region, an extinción de condominio is only taxed at 0.5-1.5 percent (again depending on the region).

Making an extinción de condominio with an agreement for tax purposes is one of the most common arrangements for divorcing couples who co-own a property together in Spain.

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