PRENUP BY RUSSIAN

According to Art. 40 of the Family Code of the Russian Federation a marriage contract is an agreement between persons planning to marry or an agreement between spouses regulating property rights and obligations of the spouses within marriage as well as in case of divorce. A marriage contract may be concluded prior to state registration of marriage (Art. 41 of the Family Code of the Russian Federation) in which case the contract comes into force on the date of state registration of the marriage. A marriage contract is subject to obligatory notarial certification.

A marriage contract may establish a matrimonial property regime different from the one established by the laws; it may establish joint, common or separate property regime in respect of all property of the spouses, certain types of property or private property of each of the spouses.

The spouses are entitled to determine their rights and obligations related to maintenance, participation in each other’s profits and bearing family expenses as well as indicate the property that will be transferred to each of the spouses in case of divorce and include any other provisions related to property relations of the spouses.

Herewith a marriage contract does not cover personal non-property relations of the spouses, their parental rights and liabilities; a marriage contract may not include provisions restricting penniless spouse’s right to maintenance or any other provisions placing one of the spouses in an extremely disadvantageous position or any provisions contrary to the family laws.

It is important to remember that the Code of Civil Procedures of the Russian Federation provides for exclusive jurisdiction in respect of immovable property. That is why if you are planning to buy any immovable property in any country other than Russia you should conclude a marriage contract in such country.

Though movable property located abroad (such as shares, bank accounts, cars, etc.) may be divided by decision of a court of the Russian Federation (at the place of residence of the spouses) I would advise establishing a property regime for such movable property by a special contract which shall be concluded in the country where the property is bought.

International law is not perfect. If you do not cover certain issues by contracts you may have to handle such issues in Russian courts. It will result in certain difficulties both in consideration of cases and enforcement of court decisions. Legal assistance treaties (for example with Finland) simplify but do not abolish certain legal procedures. And such treaties are concluded only with few countries.

You should remember that irrespective of your place of residence you may dissolve the marriage according to the laws of the Russian Federation unless your wife loses Russian citizenship. You can dissolve your marriage in Russia as divorce procedure in Russia is much simpler than in any other country.

I would not advise mixing laws of different countries. For example if property is bought in USA a US court will be the best court to settle any disputes related to such property. Let Russian courts settle your property issues in Russia if any. Decisions of Russian courts may be enforced in any country. In order to enforce a decision of a Russian court abroad you should apply to a court abroad with a request to accept and enforce such decision. But any national court will accept decision of a court of another country only to the extent not contradicting to the national laws which is very difficult to ensure.

You may use your Russian marriage contract abroad. In this case you need to obtain an apostille and translate the contract into English. But in practice such contract may be challenge in court to the extent contradicting to the national laws. Or it may happen that the Russian contract does not include facilities provided for by the local laws.

I would like to mention that spouses may also conclude marriage contracts in other countries where the spouses will live and/or buy property.

You may sign the contract in 2009. It will not come to force unless the marriage is registered in accordance with the established procedure. The contract will never come to force if you do not register the marriage. That is why conclusion of the contract is not aligned with any risk.

In the contract you should indicate your permanent or primary residential address. You may also indicate your address in Moscow (temporary registration address). The fact that your bride does not have permanent registration in Moscow does not make it impossible to conclude a marriage contract. A notary will indicate her address according to her passport.

You can register your marriage in Marriage Palace № 4 (17 Butyrskaya Street, Moscow, Russia, 127015, tel.: 7-495-685-7988, 7-495-685-1960). In order to register your marriage in Russia you will have to submit a document certifying your marital status (you can obtain it in the consulate of your country in Moscow). You will also need a notarized translation of your passport. Please see to it that your name is identically written in all Russian documents; any variations may lead to serious problems in the future. You and your bride should be temporarily registered in Moscow. You do not need a special visa to register the marriage. The one you have now is enough.

By virtue of marriage with a citizen of the Russian Federation you may apply to Russian authorities for a temporary residence permit and later for a permanent residence permit. Granted residence permit will be annulled in case you stay outside of Russia over 6 consecutive months or obtain a permanent residence permit in another country. Double taxation treaties applicable in most of the countries are usually used in order to determine the country of residence for tax purposes. Usually such treaties provide for payment of taxes in the country of permanent residence. Nevertheless all treaties are different. I may send you a few treaties in Russian but I am sure you can easily find the texts in English on the Internet.

You are not obliged to disclose information about the property you have at the date of marriage to your wife or anybody else. According to the law all property purchased by you prior to the marriage remains your private property. But if you sell such property when you are married and buy other property you may have to prove that the purchase of such property was finance from the funds received from sale of the property owned by you prior to the marriage. In which case you will have to disclose information about the property you want to conceal from your wife now.

In my opinion, it will very difficult to apply Art. 161, part 2 of the Family Code (choice of law) in practice. Judging by my practice Russian courts prefer not to intervene in jurisdiction of courts in other countries just like the courts in other countries prefer not to intervene in jurisdiction of Russian courts.

You are right - all property owned by you prior to the marriage will remain your private property and will not be divided in case of divorce. It is provided for by Art. 36 of the Family Code of the Russian Federation. Private property of the spouses may be declared their common property (Art. 37 of the Family Code of the Russian Federation) in case it is established that during the period of the marriage the value of such private property increased considerably by work of one of the spouses or by common property or private property of another spouse (complete overhaul, reconstruction, refurbishment, etc.).

I think that proceeds from the property owned by you prior to the marriage may be considered as common property. In order to avoid judicial dispute I would advise including a contractual clause indicating who will own return on the shares held by you.

Return on the shares held by your company also may be the object of dispute.

Shares and securities the purchase of which was financed from the funds received from sale of the property owned prior to the marriage may be declared your personal property. But it is implied that ALL property purchased within the marriage is the common property of the spouses and any variations must be proved in court. In order to avoid judicial disputes in the future you’d better include a contractual clause regulating this matter in a marriage contract.

As you are not planning to deposit money to accounts with Russian banks I would not advise concluding the contract in Russia. You may have a lot of problems if your wife takes legal action for partition of your foreign property including money, shares and securities. Considering your situation I would not recommend concluding a marriage contract in Russia under any circumstances as it will not protect your rights in respect of your foreign property and money. It is advisable to conclude a marriage contract in Russia only in respect of Russian property and money. For example in the contract you may indicate who will own the five-room apartment on Tverskaya Street. Such contract will make sense and will be useful. Covering division of US shares by a Russian marriage contract will complicate your life and tie you up with Russia for many years until all legal matters are settled.

A place of resolution of all disputes shall be indicated in any marriage contract irrespective of the place where it was concluded. Otherwise your wife will be able to file a claim in a Russian court. I would like to repeat one more time that I don’t see any sense in concluding a marriage contract in Russia unless you are planning to buy property in Russia.

A marriage contract is required if you are planning to buy an apartment in Moscow. But if the apartment is bought on the basis of shared ownership (50:50) you will not need a contract as each of you will have its own title document to the share in the apartment. In this case the apartment will not be the object of dispute in case of divorce.

You are right – in case of divorce it will be quite difficult to sell ½ of the apartment. If your wife does not agree to joint sale of the apartment, your share of the apartment will be sold subject to observance of the right of preemption. In this case you will sustain major losses. A contract may not oblige your wife to sell her share of the apartment in case of divorce. The only way to avoid such situation is to buy two apartments and conclude a contract specifying that the apartment bought in your wife’s name will be her private property and the apartment bought in your name will be your private property. You may live in one apartment and lease out the other one. In case of divorce each of you will remain the owner of his/her apartment and you will not have to divide such apartment.

I think that purchase of two apartments in Moscow (in your name and in the name of your wife) will help to avoid many problems and disputes in the future. In this case a marriage contract will provide reliable protection of your rights and rights of your wife.

I have a lot of wealthy clients. Marriage contracts concluded in Russia protect their property rights in Russia. I am not sure that provisions of a marriage contract concluded in Russia will be unconditionally applicable abroad. It is not difficult to make such contract and it will be easy to follow it. But it is impossible to predict how a court in a country other than Russia will treat such contract in case of a dispute. Laws of each country imply a lot of nuances that could not be covered by a contract concluded in Russia. It is possible to state that the law of USA or Great Britain or any other country will be the applicable law of the contract but without knowledge of the laws of USA or Great Britain it will be merely a declarative clause and if any provisions of the contract contradict to the laws of a particular country, such provisions will be void in such country.

No contract will give you a 100% guarantee that you will not have any problems in the future. There were cases in my practice when offended wives accused their husbands of grave crimes that the husbands hadn’t committed. I have to protect foreigners from their Russian wives all the time. Unfortunately no contract will be a reliable protection against villainy, guile, slander. A contract may protect only your property but not honor, dignity, reputation.

To sum it all up I would like to say that in your case it will be advisable to conclude not only a marriage contract in Russia but also 2 or 3 contracts in other countries and state in each of the contracts that the property purchased abroad will be regulated by particular contract.