In Switzerland, the term marital agreement refers to a notarized financial contract signed by both parties in a marriage. This agreement specifies which assets and liabilities are categorized as joint estate and which assets are categorized as separate estate.
A marital agreement can be drafted and signed either ahead of or during marriage. This differentiates it from a prenuptial agreement, which is always drafted and signed ahead of marriage.
Marital agreements are primarily used to avoid conflicts in the event of divorce. However, they can serve many purposes including asset protection, tax optimization and estate planning. For example, by creating a marital agreement, a family can protect assets from seizure by creditors. A family member planning on taking on debt can relieve their spouse of liability for the debt by creating a marital agreement.
Marital agreements must be notarized by an official notary. The notary is responsible to explain the exact terms and conditions of the contract to both parties. A notary is paid by the municipality and not by any one spouse, so their explanation is generally unbiased.
Without a marital agreement, income and assets accumulated during marriage are generally classified as joint estate. In the event of a divorce, both assets and debts are split equally between both spouses.
The two main frameworks to work within when creating a Swiss marital agreement:
1. Separate estates. You can choose to keep your estates separate. Your income, debts and financial commitments remain your sole responsibility for your entire marriage, and those of your future spouse remain their sole responsibility. This setup can favor the wealthier partner in the case of a divorce, but it works well for couples in which independent-minded partners both earn an income and share responsibility for the care of children.
2. Joint and separate estates. In this model, you can choose to designate which estates remain separate and which will be classified as joint estate.
Example 1: You own a business and want to protect your spouse from potential debts should things go pear-shaped, you can categorize your business-related assets as your separate estate.
Example 2: Your in-laws-to-be want your fiancée to inherit their home or fortune, but have reservations about sharing it with you. You could classify your fiancée's inheritance as their separate estate to appease your in-laws.
If you specifically want your spouse to share in your assets, you can specify them as joint estate.
All assets and liabilities which are not specifically listed as separate estate in a marital agreement are classified as joint estate and both spouses share equal rights and responsibilities over them.
Joint estates are beneficial in the event that either spouse passes away unexpectedly, because the surviving spouse will inherit all of the joint estate. Sseparate estates are inherited by the deceased spouse's legal heirs as per Swiss inheritance rules.
More on this topic:
Marriage in Switzerland: Financial pros and cons
Divorce in Switzerland: 8 Financial Questions Answered
