Pre-Nuptial Agreements in Italy>
Pre-Nuptial Agreements in Italy
Unlike in some other jurisdictions, pre-nuptial agreements are not commonplace in Italy. The reason for this is evident; until relatively recently, even where the parties had entered into a pre-nuptial agreement, the Italian Court would not enforce it. In this guest blog Italian lawyer Veronica Magrini of Anglo Italian Law network looks at the status of pre-nuptial agreements in Italy and the marital property regime itself.
Divorce in Italy
Under Italian law, the significance of divorce (and indeed, separation) is that it is considered a matter of ‘status’. Consequently, you are not permitted to deal with this status in a contract, nor with the rights that derive from the divorce such as financial provision (including the provision of maintenance or ‘alimony’ where there is an exceptional case of need). This means that any pre-nuptial agreement would automatically be declared invalid or void.
The historical influence
The attitude against pre-nuptial agreements is also reflected in historical factors. Societal views have played a significant role too. Crucially, divorce has only been permitted in Italy since 1970. Over the years, both the social stigma and general attitude towards divorce has lessened. This has paved the way for a more permissive system in which couples can divorce.
The Italian marital property regime
There is another relevant point to highlight regarding the division of assets on divorce. Under Italian law, the divorce court has no power to make an order as regards the distribution of assets in relation to the property of the spouses. Instead, the marital property regime centres around two ‘routes’, either of which can be chosen by the parties upon marriage. Both options are legally binding for the rest of married life and even after.
- The ‘Joint Assets’ route (the default position): as of the date of marriage, all property belongs to both spouses in equal shares;
- The ‘Separated Assets’ route: upon marriage, each party retains assets held in their own name or purchased by himself/herself, and will continue to do so, unless the couple buy property together or opt to jointly own it (this “route” is now chosen by the vast majority of couple mainly for tax reasons). In case of disagreements about the ownership of assets (as it may happen when assets are acquired in the name of one spouse but paid for by the other) it is not the Divorce Court who has to make a decision over these properties but the Civil Court, through further and separate proceedings, which have nothing to do with divorce law.
The treatment of assets outlined above will only apply to property purchased after the date of marriage. Maintenance obligations and inheritance rights are unaffected by the above election and are governed by separate provisions under Italian law.
On the face of it therefore, it would seem relatively straightforward to sort out the finances of an Italian couple on divorce: if there are jointly held assets, then it will be a simple case of a 50/50 split. If assets are not held jointly, theoretically, there should be no reason for debate as each party retains assets held in their sole name.
But what happens in the following scenario:
- the parties opt for the ‘Joint Assets’ regime but
- one party alone provided the monies for the family home even if the other party could have contributed to the purchase price but in fact did not?
And what about the spouse who contributed to the family life in a less evident but fundamental way, taking care of the children and so on (a non-financial contribution therefore) but the parties had elected for the ‘Separated Assets’ regime. Would that spouse end up with nothing at all save for provision for the children?
And finally, even in case of the ‘Joint Assets’ regime, there could be a number of options as to how assets could actually be divided to ensure an equal division.
The scenarios mentioned above are indeed fairly common and it is for this reason (particularly in ‘big money’ cases or where the overall composition of pre-marital assets held is rather complicated or likely to become complicated), that spouses attempt to mitigate any disagreement over asset division on divorce by entering into a pre-nuptial agreement of a similar contract. The same can be said of any country in which pre-nuptial agreements are common.
Because of the operation of Italian law, the fact that pre-nuptial agreements are not strictly enforceable does not mean that certain clauses of the agreement cannot be severed and consequently be considered binding on the parties. However, as stated above, any provision attempting to upset the will of the parties to divorce or not would technically be null and void.
How to overcome the problem?
Due to this approach, arguably, it would be preferable not to enter into a pre-nuptial agreement but to make a provision for ‘who gets what’ at a time when the divorce or separation process is underway – a sort of post-nuptial agreement. This way, the parties can deal with all aspects of the marriage: children, housing, maintenance, the disposal of property etc. at the same time. Having reached a settlement, the Italian Court will have the final say in determining if the children (if any) are prejudiced in any way by the agreement. If not, the court can seal the order on the basis that the remainder of the agreement is enforceable under Italian law.
The future of pre-nuptial agreements
Whilst there is little case law on the enforceability of pre-nuptial or post-nuptial agreements in Italy, following a decision of the Supreme Court in 2012, courts mayenforce financial agreements provided that the agreement has been freely entered into and where there is no evidence of duress as regards the divorce proceedings. Further, the agreement itself must not be considered to be a ‘pre-nuptial agreement’. If the agreement passes this test, the courts will look to regulate the fairness of the financial agreement insofar as each party is concerned but the hurdle is not easily overcome.
What this means in practice is that an agreement seeking to deal with the finances on divorce may be enforceable subject to the test of ‘fairness’. It will not however be regarded as a ‘pre-nuptial agreement’. This will continue to be the case until a specific law is enacted by Parliament so as to allow such agreements to be valid under Italian law. There has in fact been some progress in this area with proposals being put forward to address this issue. However, the fact remains that the existence of the matrimonial property regimes seems to be fairly protective of the rights of the better off whose property rights can hardly be challenged by a Court’s order. These regimes in fact avoid any dispute that may arise about the assets after a divorce order although the position of the worse off party may be highly compromised by a Separate Assets nuptial agreement entered into at the time of the marriage.
Cass. I sez. Civ. 21/12/2012, sent. n.23713.n
By Veronica Magrini