Buckle up before marriage goes awry
There is a rising trend in Singapore for couples to do up prenuptial or postnuptial agreements. Such agreements are even more popular when a person marries for the second time, as he or she is more likely to consider protecting assets or personal interests after being divorced in the past.
So, what is a prenuptial or postnuptial agreement? Is it really necessary to draw up such agreements between couples as a form of insurance against the likelihood of a divorce?
This article will answer questions about what a prenuptial and postnuptial agreement is and address the benefits and disadvantages of having a prenuptial or postnuptial agreement.
What is a Prenuptial Agreement?
A prenuptial agreement is a contract between couples that is drawn up drawn up prior to marriage.
It spells out how matrimonial assets should be divided, whether spousal or children maintenance should be given, and who should have custody, care and control or access rights of the children during the couple’s marriage upon their separation or in the event of a divorce.
The terms of a prenuptial agreement may include:
- Exclusion of an existing property held in parties’ sole name as part of matrimonial assets, so the property will not be subjected to division by the Court in the event of a divorce;
- Manner of holding joint properties during the marriage (e.g. Joint Tenancy or Tenants in Common)
- Division of matrimonial assets (e.g. movable and immovable properties) during separation or divorce or death of one party;
- Parties’ contributions towards household expenses;
- Spousal and children’s maintenance issues; and
- How should liabilities and debts owed by one or both parties be dealt with, etc.
Benefits of Prenuptial Agreement
Some say having a prenuptial agreement drawn up is problematic because it indicates that the person wanting the prenuptial agreement is already preparing for a broken marriage. Others feel it is crucial to be able to put your destiny in your own hands by deciding how things should be settled if the marriage does go wrong.
It is our view that prenuptial agreements can assist couples to achieve the following objectives:
- Protect the assets, whether movable or immovable, acquired by one party before the marriage (e.g. property held in sole name, inheritance etc);
- Protect one party from the debts incurred by the other party;
- Protect family businesses from enforced division by the Courts;
- Protect the interests of children from a previous marriage;
- Offer certainty in the financial arrangements of the parties in respect of household expenses, spousal and/or children’s maintenance, especially for cross-border marriages.
What is a Postnuptial Agreement?
Postnuptial agreements are entered into during the couples’ marriage, rather than before. Apart from this, prenuptial and postnuptial agreements are similar – they are both used by couples to protect their assets or personal interests in the event of a separation or a divorce.
As such, the terms that you find in postnuptial agreements may be similar to the terms of prenuptial agreements.
Benefits of Postnuptial Agreement
Couples generally enter into a postnuptial agreement when the marriage is rocky, or where one party receives a large inheritance which he or she intends to ring-fence from their spouse in the event of a divorce.
It is our view that postnuptial agreements can assist couples to achieve the following objectives:
- Expedite divorce proceedings and reduce the chances of disagreement;
- Provide certainty in the expectations of the couple in the event of a divorce as they are in control of the outcome;
- Protect one party from the debts incurred by the other party; and
- Reflect a material change in circumstances since the couple got married (e.g. ring-fencing an unexpected windfall or significant inheritance, etc)
Disadvantages of having a Prenuptial / Postnuptial Agreement done up
- Friction between the couple because a spouse that raises the intention of doing up such an agreement may be viewed as “lacking faith in their spouse”;
- Some couples may be unwilling to disclose the whole truth about their assets, which makes one party feel that there is no trust in the relationship; and
- Both prenuptial and postnuptial agreements are not automatically binding in Singapore.
Are Prenuptial / Postnuptial Agreements Valid and Enforceable by the Court?
Before you draft your own prenuptial or postnuptial agreements, you should seek legal advice and ensure that the agreed terms between your partner or spouse do not contravene any express provision or legislative policy embodied within the Women’s Charter.
This is because the Family Justice Courts are entitled to scrutinise prenuptial agreements and may decline to uphold them if they contradict the requirements of the Women’s Charter.
For instance:
- Under section 112 of the Women’s Charter, the Family Justice Courts have the power to divide the matrimonial assets in a just and equitable manner as opposed to leaving one party empty-handed;
- In determining spousal and children’s maintenance, the Family Justice Courts are also bound to follow the factors under section 114 of the Women’s Charter. In other words, whilst the Family Justice Courts may refer to the prenuptial agreement, they are not obliged to follow the terms of the prenuptial agreement strictly; and
- The aforesaid principles also apply to custody, care and control, and access issues of the children whereby the couples cannot usurp the ultimate power of the Family Justice Courts to decide what is in the best interest of the children (e.g. a parent should not be asked to give up his/her rights to the children in the event of a divorce).
In summary, prenuptial or postnuptial agreements are more likely to be valid and enforceable if they are drafted by a lawyer in accordance with the Women’s Charter.
We will be able to advise you on the types of provisions you should include in your prenuptial or postnuptial agreement according to your situation.
Talk to our team today!