Prenuptial agreements have gained popularity around the world as a way to provide clarity and protect assets by amicably agreeing upon a division of of property should the marriage end in divorce. Many Americans are familiar with the concept of a prenuptial agreement due to its widespread use by celebrities and professional athletes but in Japan it still remains a relatively novel and underused legal concept.
While prenuptials are very rare in Japan, there is a provision for their use under Japanese law. Japan’s Civil Code section regarding prenuptial agreements states that husbands and wives may enter into a contract before marriage that authorizes a different asset distribution from the normal 50/50 statutory division used in a divorce. This allows the husband and wife to enter into a prenuptial agreement regarding the division of their assets upon divorce and specify which items will remain separate property. However, there are some strict conditions on the use of prenuptial agreements in Japan that couples should be aware of.
First, the prenuptial agreement should be entered into before the marriage is registered. Therefore, it is important to discuss the issue of signing a prenuptial with your spouse and your attorney before getting married. Once the couple is married, it is too late to draft an agreement.
Second, the agreement itself needs to be registered in order for it to have binding effect on any 3rd parties involved. This registration also ensures that both spouses understand and consent to the agreement.
Third, the couple should not forget to include a clause in the agreement that allows the agreement to be modified or terminated if they so wish. Without wording in the contract that allows changes to be made, there is no way to modify the agreement if the couple wants to add or subtract something from it at a later date. Under Japanese law, prenuptial agreements can be modified our even canceled at any point during the marriage up until divorce is imminent. Once the couple is thinking of divorcing, the prenuptial agreement cannot be modified or terminated. This standard is a vague one and is often applied retroactively by the family court judge considering the divorce.
Finally, not everything a couple agrees upon in a prenuptial agreement will be enforced by a family court judge during a divorce. Agreements that are blatantly unfair or stray too far from Japanese law are less likely to be enforceable if the couple ends up divorcing.
Prenuptial agreements are still very rare in Japan and therefore the courts have very little experience working with them. Furthermore, the fact that they can be modified or canceled during the marriage means that many spouses do not feel that there is much merit in signing an agreement. Until the practice of signing prenuptial agreements becomes more popular in Japan it will continue to be difficult to predict how courts will react to their use.