Family Offices – What investors should know about them

Family Offices – What investors should know about them

The Family Office can help if the private wealth has become extensive and complex. Finding a suitable partner is essential. To enable successful, i.e. profitable, management of assets, Family Offices must meet specific quality requirements such as personal integrity, high professional standards and service orientation. Due to increasing complexity and internationalization, advice from independent external legal advisors is indispensable in order to guarantee high-level expertise. Mandating large law firms can be advantageous for liability reasons.

The Family Office concept

Depending on the context in which it is used, the term “Family Office” can have very different meanings. Some talk of it in a quite derogatory manner as “butler of the rich”, others as “high-level secretarial services”.  It is true that Family Office services are rendered in the context of mostly large fortunes. Here, the term Family Office should be understood as an organizational unit in which all services relating to the management of private wealth will be managed externally in a business structure.

Nowadays, Family Offices are in operation all around the world. Previously, Family Offices were common particularly in the United States and Europe. Today, Family Offices are also gaining increasing importance in Asia (Hong Kong, Singapore). In Europe, Switzerland must be regarded as the centre of Family Offices alongside London. Although there are no precise figures, 300 to 500 Family Offices are supposedly engaged in the Family Office business in Switzerland. One assumes that all over Europe there are about 4,000 firms each with assets of at least 100 million USD under management. Of these, approximately 750 are organized as Single Family Offices, i.e. as corporations set up to render services for one particular family. The remainder are so-called Multi Family Offices, i.e. units in which the services are bundled for the assets of several individuals.

Where does the concept of Family Offices come from?

The stewardship itself is not a phenomenon of modernity. Rather, the roots date back to the 6th century when the major-domo took over the management of the assets for his dominion. The modern concept of Family Offices was developed in the 19th century. In 1838, the family JP Morgan founded the House of Morgan for the administration of the family’s assets. In 1882, the Rockefeller family set up a comparable entity.

Why have Family Offices enjoyed such a boom in recent years?

A major reason for this is the general increase in the concentration of wealth, followed by all needs arising from this in terms of the protection and growth of a large fortune.

At the same time, many wealthy investors had very negative experience with conventional investment advice from their banks during the last financial crisis. Consequently, they have been looking for independent investment advice and have found an option in the concept of Family Offices.

Additionally, this form of organization meets the increasing need of most investors for discretion. Not only externally, but also vis-à-vis the banks involved and investment providers, they do not want to disclose their financial circumstances fully and in detail. Here, a Family Office offers a shielding or at least filtering effect.

Finally, the legal and administrative requirements for investors have increased enormously in recent years. Firstly, because investors are increasingly focusing on real assets whose management is more complex than the mere holding of an indirect investment through a financial product. Secondly, this is a consequence of the generally increasing internationalization of investments.

What services offered by Family Offices can investors benefit from?

Classically, professional Family Office services include aspects such as asset planning, asset management, asset controlling, asset protection as well as legal and tax compliance.

The range of possible supplementary services is extremely wide and limited only by the individual needs of the asset owners. Such services can comprise administrative support, providing personnel, managing selective private matters, through to the complete lifestyle management of the asset holder.

At what point does a Family Office make sense?

In simple terms, working with a Family Office is always worthwhile if the private wealth has become so large and complex that neither the time nor the know-how for its self- administration are available.

However, the operational costs of running a Family Office can be significant. The reason is that the team of specialists is kept exclusively for the purpose of the asset owner. Therefore, as a general rule, the establishment of a Family Office only makes sense economically for really large fortunes. Fixed limits can hardly be defined, since the individual needs of the asset holder and the individual demands resulting from the asset structure vary to a large extent. As a basic rule, however, one can say that in Switzerland a fortune of between 400 and 500 million CHF is considered to be the minimum amount for setting up a Single Family Office.

But even without the full exclusivity of (and control over) a Single Family Office, wealthy investors can benefit from Family Office services by pooling their interests in Multi Family Offices. This form of pooling may include benchmarking, better investment terms or access to investment opportunities / high-profiling networks through higher investment volumes. In Europe, Multi Family Offices serve an average of 10 to 15 clients with total assets under management of some 25 to 50 million USD. However, the success of this type of bundling depends to a crucial extent on the assumption that the specific client profiles are comparable to each other. Managing assets that are mainly invested in Asian financial market instruments will hardly generate synergies for managing European real assets.

Success factors – what makes a Family Office a good Family Office?

The decision in favour of a Family Office – whether a Single or a Multi Family Office – is a significant and mostly far-reaching decision. There are numerous companies that offer Family Office services. The problem is that “Family Office” is not a protected term and thus anyone can offer Family Office services without having any specific qualification or experience.

Based on the demands in terms of the successful, i.e. profitable, management of larger assets, the following skills are of particular importance.


  • Personal Integrity: A Family Office is not only an asset manager but also a close intimate of the client with a deep insight into highly personal matters. Thus, personal integrity and confidentiality are indispensable.
  • High Professional Standards and Expertise: Decisive for the quality of the consulting services is a high level of competence on the part of the Family Office employees such as attorneys, tax consultants, asset managers etc.
  • Service Orientation: One of the major reasons for holders of considerable assets to mandate a Family Office is severe time restraints. Given this situation, they expect a very high degree of flexibility from their advisors. Whether or not the collaboration turns out to be successful depends very much on each advisor’s ability to comply with the client’s needs and preferences.
  • Network: The quality of the services rendered also depends on how well the Family Office is networked to experts advising within comparable settings. Consequently, it is most helpful to have a network comprising advisors of other Family Offices, thus enabling the advisors to benefit from each other’s expertise or networks.
  • External Expertise: Mainly because of the increasing complexity and internationalization of investments, it is important that the Family Office consultants realize when it is advantageous or even necessary to mandate an external consultant. Smaller entities in particular cannot afford to employ several specialists within the same department.  In legal departments, for example, it would be very difficult for one single person to constantly monitor legal changes in all relevant fields and to react proactively to future changes. Here, large law firms that provide highly specialized services can be of assistance, especially those focused on private clients. These teams can offer all required legal advice on civil law, corporate law, tax planning, asset protection etc. They can contribute not only high-level expertise but are also very familiar with this market segment and its specific rules. Most effectively, they can provide solutions they have already developed for other clients in comparable situations and that turned out to be helpful. Finally, the advice of a large external law firm can be advantageous for liability reasons as well, since such law firms tend to have higher levels of insurance cover.

Dirk W. Kolvenbach is a German attorney at law and Senior Partner with HEUKING KÜHN LÜER WOJTEK in Zurich and Dusseldorf. Further, he is the head of the Practice Group “Private Clients” and a renowned specialist in all Private Clients matters (e.g. succession, asset protection and transaction).

dirk kolvenbach

Dirk W. Kolvenbach

Heuking Kühn Lüer Wojtek
May foreigners acquire real estate in Switzerland?

May foreigners acquire real estate in Switzerland?

The “Federal Act on Acquisition of Real estate by Persons living abroad” restricts the acquisition of real estate in Switzerland by foreigners.

The acquisition of real estate by persons abroad is restricted by the Federal Act on the Acquisition of Real estate by Persons living abroad (“Bundesgesetz über den Erwerb von Grundstücken durch Personen im Ausland”, hereinafter “the Act”). This Act is commonly referred to as “Lex Koller” or previously also “Lex Friedrich”. It restricts the acquisition of real estate in Switzerland by foreigners, by foreign-based companies or by Swiss-based companies controlled by foreigners. As a rule, these categories of persons or legal entities require an authorization from the competent cantonal authority. Neither the fact that the real estate may have already been in foreign hands nor the legal cause of the transfer (i.e. purchase, inheritance, gift, merger, etc.) have a bearing on the application of the law.

The application of the Act is based on three criteria: (i) an acquisition of real estate within the meaning of the Act (ii) by a person abroad and (iii) none of the exceptions applies.

Persons abroad within the meaning of the Act

Within the meaning of the Act (i) natural persons, i.e. individuals, domiciled abroad and (ii) natural persons domiciled in Switzerland, who are neither nationals of the European Union (EU) nor nationals of the European Free Trade Association (EFTA) Member States and who do not hold a valid residence permit in Switzerland (so-called “permit C”) are considered to be persons abroad. Companies with their registered seat abroad qualify as persons abroad within the meaning of the Act, even if they are Swiss-owned. Furthermore, legal entities or companies without legal personality but capable to own property, who are controlled by persons abroad, are also considered persons abroad, even if they have a registered seat in Switzerland.

Persons, who in principle are not subject to the Act may nevertheless qualify as persons abroad in case they acquire real estate on behalf of persons abroad.

Acquisition requirements

The authorisation requirements differ by the type of use of the real estate at issue. The acquisition of dwellings (single-family dwellings, apartment houses, owner-occupied flats and raw land on which such dwellings are to be built) is in general subject to the Act. As an exception from this rule, the acquisition of main residences, secondary residences for cross-border commuters from the EU or EFTA Member States and dwellings purchased in exceptional circumstances in conjunction with commercial real estate are not subject to the authorisation requirements of the Act.

Foreigners domiciled in Switzerland may acquire a dwelling or building land (provided that construction starts within one year after the acquisition) in their actual place of residence as their main residence without authorisation. In this case, the buyer needs to occupy the dwelling himself. Only one residential unit may be acquired without authorisation.

EU or EFTA Member States citizens commuting with a cross-border work (permit G) may acquire a secondary residence in the area of their place of work without authorisation. They are obliged to occupy the residence themselves.

Real estate used for commercial purposes may be acquired without authorisation. In this case, it is immaterial whether the real estate is used for the buyer’s business or rented resp. leased by a third party in order to pursue commercial activities. As an exception, living accommodations may also be acquired without prior authorisation in case this is necessary for the business.

The acquisition of undeveloped land in residential, industrial or commercial zones is in general subject to prior authorisation.


The Act provides several exceptions from the authorisation requirement: Legal heirs under Swiss law, relatives in line of ascent or descent from the person disposing of the property and their spouse or registered partner, buyers who already hold an interest in the real estate in joint ownership or co-ownership, condominium owners exchanging their units in the same building, buyers acquiring small areas to complement the real estate they already own and cross-border EU and EFTA commuters regarding secondary residences at their workplace do not need any prior authorisation for the acquisition of real estate.

Reasons for authorisation

The Act provides various special reasons for the authorisation. In case of holiday homes and serviced flats, the dwelling must be situated in a place designated as a holiday resort by the cantonal authorities. There are annual quotas assigned to the cantons by the Confederation for holiday homes and serviced flats that have to be met.

Walter Boss e1669304268889

Walter H. Boss

Walter Boss


Switzerland – The Home of the Family Office

Switzerland – The Home of the Family Office

An increasing amount of high earning business owners and families who have sold their businesses are turning to family wealth management offices to support them, instead of standard wealth management services.

When families weigh up the question of whether to set up their own single-family office (SFO) or use the services of an existing multi-family office (MFO), they often overlook the matter of the jurisdiction in which that family office should be. This is actually an essential element that deserves serious thought.

There are quite a few questions that need answering before deciding on the jurisdiction for a family office:

  • In which jurisdiction does the family need support?
  • What are the family’s goals?
  • What should the legal form be?
  • Which of the family’s (corporate) entities need to be managed, and by whom?
  • Which assets need to be preserved and protected?

All these considerations apply when establishing an SFO or choosing an MFO. You also need to select a country that is politically, economically and financially stable, provides easy access to financial service providers, and offers a sound infrastructure, and where staff is highly qualified and experienced.

A common mistake families make is to choose or create a family office in the same jurisdiction as where they live. Although this can be very practical, for example from a communication point of view, this is often not the best choice when examined from a wealth-preservation perspective. Because one of the primary roles of a family office is to safeguard assets, and to be able to assist the family under all kinds of circumstances.

A family office for wealth preservation

This means that the family office needs to be able to protect the family’s assets and interests against geographical, political, religious, personal and economic risks, while remaining fully operational under any circumstances. Therefore, it is only logical that the family office should be located in a secure jurisdiction. Because unstable and unsafe jurisdictions outnumber the stable and safe ones by far, the majority of family offices will need to be located outside the home jurisdiction of the families they serve. This does not necessarily mean that the entire staff or all services must be located in a foreign jurisdiction; roles such as local secretarial support, lifestyle management services and local real estate management can be (partially) based in the family’s original jurisdiction.

In addition to providing stability and security, the jurisdiction of the family office must also:

  • Be easily reachable
  • Be tax-efficient
  • Allow the office to manage the family’s entities efficiently (holding companies, trusts, foundations, etc.)

Finally, most family offices prefer to be located in a jurisdiction known for having a reputable financial centre. It considerably simplifies the activities of a family office when it is in the vicinity of stable private banks and financial specialists with solid reputations and lots of experience.

All the essential requirements highlighted above ultimately limit the number of best possible jurisdictions to only a few and that is exactly why you find so many SFOs and MFOs in Switzerland.

Switzerland, the traditional safe haven

Switzerland is politically, economically and financially stable. It has been a neutral country since 1815 and has not been involved in any war since 1848. As Switzerland’s political regime is a so-called direct democracy, it is one of the few countries in the world where the population can have direct influence on all (proposed) federal and local legislation.

Switzerland’s economy is extremely stable. Thanks to broad diversification and strong domestic demand the Swiss economy has been growing steadily and has not been particularly weighed down by the worldwide economic and financial crisis. Thanks to its constitutional debt brake, the Swiss government has been able to produce a budget surplus every single year since the start of the financial crisis in 2008 and as a result Switzerland nowadays has one of the world’s lowest government debt ratios and is one of the few countries left with a AAA rating.

Swiss financial infrastructure

As mentioned, close proximity to solid private banks is key, as one of the primary tasks of a family office is to manage your wealth.  Swiss banks have been world leaders in the wealth management industry for a very long time and some of the best-capitalised banks in the world are located in Switzerland. A Swiss private bank stands apart from local private banks thanks to its expertise and experience in investments and investment classes from around the world. A Swiss private bank is not only knowledgeable about the securities traded on your local stock exchange, it also advises you on the securities traded on all other international stock exchanges (contrary to, for example, US-based banks).

Switzerland also has a very attractive corporate income tax system. Rates are relatively low and Switzerland has signed agreements for the avoidance of double taxation with many countries. On top of that Switzerland is also a signatory to the Hague Trusts Convention thereby recognising the existence and validity of trusts. All this is backed up by Switzerland’s reputable, trustworthy and solid legal system and its topflight specialists such as tax advisors, law firms, wealth planning specialists, notaries, audit firms, etc.

Moreover, the infrastructure in Switzerland is world-class. Geneva and Zurich have highly developed airports with flight connections worldwide, many direct, and both city centres can be reached within twenty minutes from their respective airports.

Family office staff

Last but not least, highly experienced, motivated, reliable and educated staff with financial experience can be recruited or found in Switzerland. But even more importantly, when you intend to establish a SFO, such staff currently located elsewhere in the world can also be persuaded to relocate to Switzerland as it is considered one of the best countries in the world to live in, due to its very high living standards.

One of the best locations for a family office

All these elements make Switzerland one of the best locations to use a multi-family office or to establish your own single one. Because a family office is not only there to manage your wealth, but also to safeguard and protect it when your home country turns out to be less stable than you had hoped or expected.

Jan van Bueren is Senior Advisor EMEA and Switserland at Union Bancaire Privée.

VAN BUEREN Jan e1675435115588

Jan van Bueren

UBS Group
What is the benefit to families in making a prenuptial agreement?

What is the benefit to families in making a prenuptial agreement?

Prenuptial agreements can be used to protect family wealth and to ensure a fair settlement for all parties without the necessity of going to court.

This article relates to international families and their use of prenuptial agreements to make wealth planning decisions for the future. We look at what they are, how the courts view them in different jurisdictions and how and why they are currently being used.

What are prenuptial and postnuptial agreements?

‘Pre-nuptial agreements’ are also referred to as pre-marital agreements, ante-nuptial agreements and often shortened to ‘prenups’. They are contracts made by two parties in contemplation of marriage. They outline each party’s responsibilities and property rights in the unfortunate event of their marriage breaking down.

A ‘post nuptial agreement’ is one which is entered into during the marriage and may be, as with a prenuptial agreement, made in case of marital breakdown, or one which has been made following the breakdown of the marriage (a ‘separation agreement’). Post nuptial agreements made in contemplation of marital breakdown are often drawn up to re-enforce a previous prenuptial agreement. For ease of reading, we will refer to prenuptial agreements here.

Why do couples enter into pre-nuptial agreements?

In certain jurisdictions, prenuptial agreements are the norm. In others they are considered unusual, and frankly, unromantic! But there are good reasons for entering into an agreement these days in particular for wealthy families with an international lifestyle and a range of assets held globally hoping to ensure that this wealth stays with that party or his/her family:

  • to provide asset protection: protect family wealth from what has become an increasingly generous series of awards in favour of the weaker party and the vulnerability of inherited wealth, particularly in some common law jurisdictions. Where the wealth has been brought into the family solely by one party, and this could be for many reasons but including where one party is older and has successfully accumulated wealth by his own efforts or because a party has the benefit of family and inherited wealth. It is common for prenuptial agreements to ring fence premarital assets and allow for a fair distribution of only those assets which are accumulated during the marriage;
  • to simplify matters on divorce, create certainty and avoid lengthy and expensive litigation;
  • To protect the interests of children from a previous marriage;
  • Although traditionally seen as a tool for the wealthy, a prenup can also record and allow compensation to a party for giving up employment, or moving jurisdictions for the sake of the family.

How do the courts view prenuptial agreements?

There has been a significant change in attitude towards prenuptial agreements in recent years. Originally they were seen by the courts as a threat to the flexible jurisdiction which prevailed protecting the rights of the financially weaker spouse. In common law countries such as England and Hong Kong, family law has been designed to ensure a fair division of marital property, dependant on a number of different factors to determine who should get what in order to allow the parties to carry on with their lives as comfortably as possible after divorce. The trouble was, the outcome was unpredictable and could differ from one judge to another, depending on his exercise of his judicial discretion. If there was a prenuptial agreement is was just one of the factors the court would consider. Prenuptial agreements were seen as a tool of the wealthy to limit the rights of the weaker spouse by making her (traditionally) sign an agreement which would arrange that a certain amount would be payable dependant upon the number of years they were married, how many children they had and so on. However, with the increase in awards, particularly in common law jurisdictions, the perception of the prenuptial agreement has changed to one of prudent planning, so long as the rights of the weaker spouse and children are protected within the document.

Very recently in England, the Law Commission has recommended that there be a change in the legislation to make prenuptial agreements legally binding. This has been controversial as in many sectors of society, particularly the Church, prenuptial agreements are considered against public policy as they undermine the idea of marriage as a life long union. Now the papers are all reporting that DIY divorce will become all the rage as couples can write their own contracts before getting married which the courts will recognize as valid.

In reality, society has changed over the years and divorce has become commonplace. Consequently the courts have become more sympathetic to the parties’ wish to regulate their affairs in what is hoped to be a cost efficient way. In most jurisdictions, however, safeguards have been put in place to ensure that such agreements are fair, that financial responsibilities are met and they are not designed by the parties to defeat creditors. Some guidelines common to many jurisdictions are set out below.


Generally, a prenuptial agreement will be enforceable if:

  • Both parties have received independent legal advice – although this is not always fatal if a party was able to take legal advice but chose not to;
  • There has been full disclosure. It is important that each party has the information material to his or her decision and each party had intended that this agreement would govern the financial consequences of the marital breakdown;
  • There is no evidence of duress, fraud or misrepresentation which would in any event put a contract into question, but in addition to this, evidence of undue influence and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, may render the agreement unenforceable. It has been suggested that there should be at least 28 days between signing the agreement and the wedding to allow proper consideration of the implications of the agreement and to ensure that there is no question of pressure at the time of signing;
  • The agreement must be fair. If one party wishes to ring fence inherited or pre marital assets, it is as well to compensate the other party in the division of the post marital assets. If the marriage is long, inherited wealth, pre marital assets and trusts will all be more vulnerable to a claim. The law differs from one jurisdiction to the next in respect of premarital and inherited wealth but in England and Hong Kong the needs of both parties will be considered first. If there is any surplus for distribution, factors such as the duration of the marriage and whether the inherited or premarital wealth has been mingled and used by the parties in their general living expenses will be relevant. If so the funds will be vulnerable, even if there has been an attempt to ring fence that asset by, for example, putting it in a trust.
  • Special care should be taken to provide for children and the inclusion of a review clause is advisable as the contract may become less relevant over time.

Are nuptial agreements enforceable in all jurisdictions?

For the international client, it is important to know where prenuptial agreements will be enforceable. There is a tread, even where they are not enforceable, that they should be taken into account:

  • In most countries in Europe as well as the US and Russia, prenuptial agreements are strictly enforced and in China, they are enforceable under Article 19 of the Marriage Law;
  • In Canada, New Zealand and Australia they are binding generally. In Canada they are binding, so long as there has been independent legal advice and full disclosure. Further the courts can intervene if the provision for division of property is unfair. In Australia, prenuptial agreements are binding pursuant to Part VIIIA of the Family Law Act. In New Zealand, they are binding unless a court considers that letting the contract stand would cause ‘serious injustice’;
  • In England and Wales, following the 2010 Supreme Court case of Radmacher v Granatino, prenuptial agreements are enforceable, subject to certain conditions, and we await the outcome of the Law Commission’s report;
  • In Singapore, following the Court of Appeal case of TQ v TR, where, in addition to allowing the principle that a pre-nuptial agreement may be considered in a court’s determination of a fair result, it further held that foreign prenuptial agreements governed by foreign law will be given significant weight and would normally be enforceable
  • In Hong Kong, a recent case has determined that the English case of Radmacher is good law in Hong Kong too. Therefore it is likely that prenups, providing they contain the right conditions, will be enforceable.’

Are nuptial agreements enforceable between jurisdictions?

It is material where the agreement has been finalised but it is more important where the case is heard. In Radmacher v Granatino, the case involved a prenuptial agreement which had been settled in Germany, between a German wife and a French husband with a German law clause. As the couple were resident in London at the time of the divorce, and the petition was issued there, the matter was determined by the English court. In Germany, the agreement would have been strictly enforced, in England, before its determination by the Supreme Court, it was not. The current disparity between jurisdictions can often give rise to a dispute over forum. The party in whose favour the prenuptial agreement has been made may well go to great lengths to establish that that country should hear the dispute as to financial division particularly where the contract is strictly enforced. At present, if the case is to be heard in England or Hong Kong, the outcome is less certain. A governing law clause may help in a forum dispute, but may not be determinative. If there is a forum dispute, the whereabouts of the assets will be material.


Given the prevalence of prenuptial agreements and the fact that in most jurisdictions they are enforceable, they are a useful tool for international wealthy families. They are regularly viewed as prudent wealth planning, along with the creation of family trusts. The fact that inherited wealth and trusts, which would normally be vulnerable to asset division upon divorce, particularly in England and Hong Kong, can be ring fenced with a prenuptial agreement is particularly attractive. However, even where such agreements are enforceable, care must be taken with the drafting as many agreements end up being litigated – the opposite of the parties’ intentions. There have been a string of high profile cases in Australia over the last few years. The idea of the ‘DIY prenup’ is therefore not an attractive thought and experts in the field should be consulted to avoid expensive court battles.

Premarital and Postmarital agreements – Legal and Tax considerations

Premarital and Postmarital agreements – Legal and Tax considerations

Legal and Tax considerations

The primary objective of a premarital agreement is to settle property rights in case of divorce or at death and maintenance in the case of divorce.  Except for child support, a couple is free to enter into any type of agreement they wish. There are many important issues to consider, such as:

  • Choice of Marital Regime:  In some jurisdictions( e.g., France), the parties are free to choose their marital regime e.g., separation de biens, communaute universelle or communaute reduite  aux acquets. Similarly in Germany, one can override the “default” marital regime of community o accrued gains or “Zugewinngemeinschat” by selecting other optional marital regimes such as exclusion of any community o property (“Gutertrennung”) or of general community of property (“Gutergemeinschat”).  In the United States, if the parties reside in a common law (separate property state) they cannot choose community property as their marital regime. This may be an oddity of U.S. tax law which permits a double basis step up upon the death of one spouse for those residing in community property states.
  • Definition of Non-Marital or Separate Property: This includes property owned before marriage, gifts and inheritances, including in some states interest and dividends earned by that property.  Non-marital property typically is not divided on a divorce and will pass on death without a claim by the surviving spouse.  However, a couple could agree to use non-marital property for the purchase of a residence and that could be treated as marital property.
  • Definition of Marital Property:  This is property acquired after the marriage other than separate property, but the agreement can limit this to only property in joint name or designated in writing as marital property.  The parties can specify how marital property is divided on a divorce or distributed at death.
  • Wages and Earned Income: Under most state laws, earned income, wages, and Social Security benefits acquired after marriage are marital property.  The agreement can provide, however, that earned income is to be treated as non-marital property.
  • Retirement Plans:  Contributions to retirement plans after the marriage are generally treated as marital property.  The couple can agree to allow each party to accumulate retirement benefits separately.  The agreement can also provide that each party may name someone else as the beneficiary, but to be effective the participant’s spouse must sign a waiver of rights to a qualified retirement plan after the marriage.
  • Maintenance or Alimony: A party can agree to waive maintenance or alimony in case of divorce or agree to a specified schedule of payments.   The couple needs to consider the ability of each spouse to support himself or herself after the divorce if circumstances change, such as the birth of a child.  Some states allow a court to award maintenance or alimony if due to unforeseen circumstances the spouse would suffer undue hardship or be eligible for public support at the time of the divorce.
  • Death: The couple can agree on how their property will be distributed on death including the waiver of certain spousal estate rights.  A party is free to name his or her spouse in his or her will or trust or may make lifetime gifts.  The couple may specify how the marital residence will be distributed if the owner dies first.  Sometimes, the surviving spouse is given the right to remain in the residence for period of time after the first spouse’s death. In the absence of an agreement, in common law states, a surviving spouse has a statutory right of election to receive a specified percentage of the probate estate or a fixed percentage of the augmented estate e.g., in Virginia.  In community property states, each spouse has the right to dispose of his or her separate property and one-half of the community property.  With an agreement, a spouse can completely waive all spousal rights including statutory right of election, community property interests, and miscellaneous rights such as homestead allowance, exempt property, and family allowance.
  • Guardianship: Conditions of guardianship may be included as well in some countries, although not in the U.S.

The Premarital and Postmarital Agreement- consider it when tying the knot or thereafter.

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Leigh-Alexandra Basha

McDermott Will & Emery