International Prenups: A World View

Define the Scope of Your Assignment in Your Legal Services Agreements

Defining the scope of your duties in a legal services agreement is particularly critical when you are drafting a prenup with parties who have connections in different states and countries. In particular, you must be clear that you will only be preparing an agreement that will be enforceable in your jurisdiction. Although the parties may divorce or die anywhere in the world, specify that you are drafting the agreement for your own state or country. You may want to set forth in your retainer agreement the following conditions of your representation:

• This agreement is drafted according to the law of this jurisdiction and it may not be enforceable in another state or country.
• If I am called as a witness in litigation involving the agreement, you (the client) agree to pay me for time and travel at my hourly rate.
• I cannot guarantee the benefits provided under the agreement will actually be paid to you or you would obtain greater benefits under the agreement than they would be without any agreement.
• You are responsible for the accuracy of your financial disclosure.
• Courts do not always follow choice-of-law provisions in a premarital agreement.
• This premarital agreement may be precluded from being enforced if you (the client) have not performed the terms and conditions of the agreement. Many agreements include terms that require performance by one or both parties. The client is responsible for making sure that both parties comply with the terms of the agreement.
• If you expect the agreement to be enforceable at both divorce and death (which most agreements contemplate), obtain the required expertise so that the agreement applies to both divorce and death.
• If the agreement is entered into in violation of public policy, it may be void.

Your legal services agreement should be drafted to protect you in the event there is litigation regarding the agreement. In addition to provisions set forth above, you will want to provide for arbitration in the event of a dispute relating to your representation, a waiver of a jury, a choice-of-law clause, and a choice-of-forum clause.

Draft for Your Jurisdiction and Plan for the End of the Marriage in Another Jurisdiction

Although there is a good chance that the couple will move to another state or country, you can only draft an agreement based on the expectation that the parties will either divorce or die in your jurisdiction. If they do move elsewhere, the validity and interpretation of the agreement may be litigated under another set of laws. You cannot draft an agreement that will be enforceable under another legal system. The best you can do is have a robust choice-of-law clause covering both validity of the agreement and its interpretation. It is a mistake to assume that another state or country will follow the choice-of-law clause in the agreement. Inform your client in writing that the choice-of-law clause may not be followed.

If a judge is inclined to follow a choice-of-law clause, the clause will only be enforced when the agreement does not offend the public policy in the court’s jurisdiction. Important provisions of the agreement relating to spousal support and property division may be deemed by a foreign court to violate the public policy of that state or country, and for that reason, they may not be enforced.

Even if a foreign court does follow the law of another state or country, the decision by the court may not be what the parties intended when entering into the agreement. Most judicial officers do not have experience in applying foreign laws. The issues in a premarital agreement cannot be adequately addressed by a judge from a country with an entirely different historical, sociological, and legal system.

Create the International Team

The way to best resolve the problem of a spouse who may divorce or die in another jurisdiction is to involve lawyers from other jurisdictions in the drafting of the agreement. Determine where the parties may most likely reside. For example, if you were representing Prince Harry, you might expect that Meghan might be interested in living in California (at least part time) because she grew up in Hollywood. It might make sense to draft a California agreement for this reason and because California has a history of enforcing prenups. It is possible California is where the case may end up. The client may identify several jurisdictions where they may have connections. A team comprised of lawyers from each of those countries could help you draft the agreement or, better yet, draft separate agreements for each jurisdiction. Consult with counsel in the foreign country and explain what you would like to do. No attorneys on the team should be liable for problems with an agreement they had no hand in drafting. For example, an English attorney who drafts an agreement for an English divorce should not be responsible for the validity of an agreement litigated in California, and vice versa.

Marital Regimes

Many countries have laws that allow their citizens to elect a marital regime. The parties meet with a notaire and that notaire advises both parties to the agreement. The notaire is an attorney trained in advising couples on marital regimes and does not represent either party. For example, a French couple who wish to enter into a marital contract must appear together before a notaire before the wedding and select one of the regimes matrimoniaux set forth in the French Civil Code. Various countries, states, and provinces allow for the election of a marital regime. Some of these are South Africa, Italy, Germany, Switzerland, Netherlands, Portugal, Austria, Mexico, Luxemburg, Louisiana, and Quebec, to name a few. It is unusual for parties electing a marital regime to be represented by independent counsel in the contract, but in most countries they can be, and if there may be a question of foreign enforcement in a nonregime country, the parties should be represented by independent counsel. The parties who are electing a marital regime may not be required to exchange a full disclosure of assets. The attorney who wants the regime to be enforceable elsewhere will insist that the parties exchange a disclosure of their income, assets, and liabilities. If a party has a residence in a regime county, it may be possible that in addition to entering into a premarital agreement, they could elect a regime that reflects the intent of the premarital agreement. There may be circumstances where the agreement and the regime conflict. In those situations, the client may not obtain the protection of either the regime or the country. Other than New York, most states do not have a practice of enforcing marital regimes, so it would not be prudent to expect that the regime will be enforced by a country or state with a legal system that does not recognize marital regimes.

Drafting an Enforceable Agreement

To ensure that an agreement will be enforceable in other states and countries, take the following protective measures:

• Require that each party be represented by independent counsel.
• Insist on a full disclosure of assets, obligations, and income.
• Allow at least seven calendar days between the time that party was first presented with the final agreement and the time the agreement is signed.
• The agreement should be signed as long a period of time before the wedding as is possible.
• The agreement should include a choice-of-law clause that applies to both the validity and interpretation of the agreement.
• If one of the parties does not speak English, insist that they hire an attorney that speaks their native language to explain the agreement to them. If you have the agreement translated into their language, the translation may not reflect the meaning of the agreement.
• Eliminate clauses that violate public policy or punish misbehavior.

Conclusion

When we draft premarital agreements with an international element, we must draft only for our own country or state. Further, we must plan for the likelihood that the parties will divorce or die elsewhere. Accomplish this by instructing the client to hire lawyers in states or countries where the client has connections or where they may live. The lawyers should consider drafting separate agreements for each state or country, or the client may choose to have one master agreement incorporating language for each jurisdiction. Although the client may prefer one agreement, it will be challenging to draft and risky for the lawyers who put their names on it. These agreements should be clear on the procedural and substantive law that will be applied to determine the validity of the agreement and its interpretation. Prince Harry and Meghan moved to California. Let us hope that their lawyers planned accordingly.