A prenuptial (premarital) agreement is conducted between two persons, who intend either to marry each other or to enter into a civil partnership and regulates the way, with which the couple wishes their assets to be divided, in the event of dissolution either of the marriage or of the civil partnership. In particular, this agreement may cover and regulate assets related to wealth, property, income, inheritance, debts, regardless if they were acquired individually or jointly, before or during the marriage. Prenuptial agreements are not recognized in Cyprus and are, therefore, void, as they are considered to be contrary to public policy and morality. In particular, they are considered to undermine the institution of marriage itself, before it even starts. Besides, under Cypriot family law marriage does not affect the financial autonomy of each spouse. The subject – matter of the distribution is the increase of the property (movable or immovable) and not the property itself. Therefore in case of separation or divorce, a spouse who has contributed in any way towards the increase of the assets of the other spouse is entitled to the part of the increase which emanates from his/her contribution. "Assets" means the movable or immovable property which was acquired by any of the spouses before the marriage with the prospect of marriage or during the course of marriage. The contribution of a spouse is presumed to the 1/3 of the increase except if it is otherwise proven. In assessing the increase of assets the Court will not take into account anything that was acquired by way of gift, inheritance or bequest (article 14 Law No.232/1991).
Protection of Family Assets under Cypriot Inheritance and Succession Law
It is also important to note that under Cyprus inheritance and succession law there are restrictions on the freedom of the testator to dispose his/her estate by will and it allows him/her to dispose only a portion of the estate (known as the "disposable portion"). Specifically, if a person dies leaving spouse and child, or spouse and descendant of a child, or no spouse but child or descendant of a child then the disposable portion must not exceed the ¼ of the net value of the estate. Whether a person dies leaving spouse or father or mother but no child or descendant of a child, then the disposable portion must not exceed the ½ of the net value of the estate. The only way a person is able to dispose all of his/her estate freely is where he/she dies leaving neither a spouse, nor a child, nor a descendant of a child, nor a father, nor a mother. In that cases, he/she is free to dispose by will all of his/her estate. The aim of the above restrictions is the protection of the family of the deceased.
Property Settlement Agreements
A property settlement agreement is an agreement entered into by a couple in connection with their divorce or separation that provides for the division of the assets acquired during their common life between them. Such an agreement is recognized under Cyprus Law.