Prenuptial agreements and contracts between cohabiting partners are becoming more and more popular among couples each year. Although many people think it is strange to take care of the property division system right before marriage or at the beginning of the relationship, practice shows that energy, money and time are often saved by those parties who arrange their property relations in advance.

The quarantine and confinement caused by COVID-19 has caused a break in the lives of many couples, and the number of divorce cases and separations shows an increasing trend. The prior conclusion of an agreement can certainly have a reassuring effect in a dispute situation, and a contract drawn up with sufficient professional knowledge can benefit both parties.

When can I enter into an agreement with my partner?

These agreements can be concluded both before and during the relationship. In the contract, the parties can specify what system they wish to apply during their cohabitation. During the marriage or the relationship, these contracts can be amended and even revoked at any time.

Why should I enter into such a contract?

• With a prenup or a contract between cohabiting partners, the financial consequences of a potential divorce or break-up can be accurately calculated, the parties can save themselves from years of litigation
• The range of assets belonging to the community of property can be freely defined, narrowed or expanded by joint will
• Arrangements regarding property – with certain restrictions - can even be made retroactively
• It is also more beneficial for the children if the financial situation of their parents is clarified

​Acquision of property without a contract

In the absence of a contract, the legal property rights system, i.e. community of property, is established between the spouses. Based on its rules, community of property includes everything that the parties acquired jointly during their marriage/cohabitation. In addition to the community of property, the parties still have so-called separate property.

 If the partners are not married, but they are considered cohabiting partners under hungarian law, they acquire their assets independently. If their relationship ends, either partner can demand the division of the increase in property that occurred during cohabitation from the other partner.

In their contracts, the parties may deviate from the systems established by law.

What can we include in the contract?

In the contract, the parties can determine the system that will regulate their relations during their marriage or cohabitation. The parties can stipulate different property rights systems for the parts of their assets specified in the contract – their system can differ from the system established by law

Some examples of what should be included in the contract:

• Family heritage

If an asset of greater value is a part of our property (for example a car or works of art), which we acquired through family inheritance, it should be included in the contract.

• Retirement savings and pension funds

Pension funds and savings can be the most important financial assets owned by parties, many couples include it in their agreement.

• Other personal property

Contracts can also be suitable for the protection of property acquired before the beginning of the relationship. Including these assets in the contract saves the parties from many difficulties during a divorce or any other dispute.

• Pets

In most cases, the law treats pets like any other assets, therefore it is surprisingly common for couples to include their pets and its related costs in a contract.

What is required for the contract to be binding?

The contract must be included in an authentic instrument or it must be countersigned by a lawyer. In the latter case, we will also receive the necessary information from a legal professional regarding the contract.

The contract is only effective against a third party if it has been registered, or if the third party knew or should have known about its content. The contract cannot contain provisions with retroactive effect that change the obligations of either party towards the third party arising before the conclusion of the contract to the third party's expense.

Revision of the contract

The concluded contracts should be revised, supplemented or amended from time to time if necessary, for example in the event of the birth of a child or an upcoming marriage.

If you have any questions about prenups or contracts between cohabiting partners, divorce, or if you need a professionally prepared contract, feel free to contact our office!

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