In recent years, pre-nuptial agreements have gained increasing recognition and acceptance as a valuable tool for couples preparing to enter marriage. A pre-nuptial agreement, often referred to as a prenup, is a legally binding contract that outlines the financial rights and responsibilities of each spouse in the event of divorce. While prenups were once primarily associated with high-net-worth individuals, they are now becoming more common among couples from diverse socioeconomic backgrounds. There are several compelling reasons why individuals may choose to enter into a prenuptial agreement and if you are considering preparing a marital agreement, you should consult with a family lawyer in Singapore.
The Law Governing Marital Agreements
In Singapore, while the law relating to issues such as divorces and separations is governed by the Women’s Charter 1961, marital agreements also fall within the realm of family law as it pertains to the regulation of the relationship between a husband and wife.
However, as with all agreements, a pre-nuptial agreement is valid so long as it meets the requirements under the law of contract regulating the formation of a contract. If the pre-nuptial agreement fulfils the requirements under the law of contract, the marital agreement is a valid and subsisting agreement.
Notwithstanding that a marital agreement is a valid and subsisting agreement, the family imposes additional considerations when considering the legality of these marital agreements. These additional considerations are as follows:
- The marital agreement is invalid if it negates or resiles from the marital relationship;
- Despite being a valid and subsisting agreement, the court does not directly enforce the marital agreement but will accord as much effect as the court deems appropriate; and
- The court can accord minimal effect or practically conclusive effect to the terms in the marital agreement.
As a pre-nuptial agreement has complex considerations, it would be prudent to approach a family lawyer in Singapore to seek assistance on preparing a marital agreement to ensure that the agreement meets all the requirements to be valid and subsisting.
- Asset Protection
One of the primary reasons for obtaining a pre-nuptial agreement is to protect assets acquired before marriage. In Singapore, assets acquired before marriage are generally considered separate property and without a pre-nuptial agreement, there may be disputes over the division of matrimonial assets accumulated during the marriage, particularly if the assets acquired before the marriage have been commingled with marital assets.
A prenuptial agreement can safeguard assets such as properties, investments, and inheritances acquired before marriage. It delineates which assets are considered separate property and should remain with their original owner in the event of divorce, providing clarity and possibly minimising disputes over asset division.
- Clarification of Financial Rights and Responsibilities
A prenuptial agreement provides clarity and certainty regarding each spouse’s financial rights and responsibilities during the marriage and in the event of divorce. It can outline issues such as the manner of division of matrimonial assets, financial support (i.e., maintenance), or liabilities and debt obligations, thus reducing ambiguity and potential conflicts down the line.
By clearly defining the financial rights and responsibilities of each spouse, a pre-nuptial agreement helps couples manage expectations and avoid misunderstandings during the marriage and potential divorce proceedings.
- Protection of Family Wealth
Pre-nuptial agreements are particularly useful in safeguarding family wealth and/or businesses. Family assets and inheritance rights may be protected in the event of a divorce by preserving family legacies and minimising the risk of such assets from being distributed outside the family.
By specifying the treatment of family assets in the event of a divorce, a pre-nuptial agreement can help safeguard the family’s wealth for future generations by ensuring that the assets remain within the family lineage.
- Debt Protection
A prenuptial agreement can address the allocation of debt and liabilities incurred before or during the marriage, protecting each spouse from assuming responsibility for the other’s debts and liabilities in the event of a divorce.
This can be particularly relevant in cases where one spouse has significant debts or liabilities, minimising the financial impact on the other spouse in the event of divorce. By clearly outlining the treatment of debts and liabilities incurred before and during the marriage, couples can prevent financial entanglements and protect their individual financial interests.
- Customization of Financial Arrangements
Couples have the flexibility to customize their financial arrangements according to their specific needs and preferences. This may include provisions for the management of joint finances, allocation of household expenses, and determination of maintenance for the wife or an incapacitated husband.
A pre-nuptial agreement allows couples the freedom to negotiate terms that reflect their unique circumstances, including provisions for property division, maintenance, and other financial matters.
- Minimising Acrimony during Divorce Proceedings
Divorce can be emotionally, mentally and financially taxing for any individual. A marital agreement such as a pre-nuptial agreement may help minimise or reduce the acrimony and tension that may arise during divorce proceedings.
A well-drafted marital agreement would clearly outline and state the spouse’s intentions, responsibilities and obligations. As such, a pre-nuptial agreement may help reduce the conflict between spouses and thus the amount of time necessary to litigate issues addressed in the marital agreement and the costs necessary to sustain such legal battles.
Additional Considerations
It is essential for individuals seeking to prepare a marital agreement to seek legal advice and assistance from a family lawyer in Singapore. Particularly, if the issues are highly contentious or involve significant finances and assets, spouses should seek independent legal representation to ensure that their interests are adequately represented and protected in the agreement.
It is also important for spouses to approach the negotiation and drafting of a pre-nuptial agreement with openness, honesty, and mutual respect.
Regular reviews and updates of the pre-nuptial agreement may be necessary to reflect changes in circumstances, such as the birth of children, significant financial transactions, or career advancements.
Conclusion
While prenuptial agreements may not be suitable for every couple, they offer significant benefits for individuals seeking to protect their financial interests and clarify their rights and responsibilities in a marriage. In Singapore, where marriages and divorces are governed by the Women’s Charter 1961, pre-nuptial agreements provide a valuable tool for asset protection, financial planning, and conflict resolution. By entering into a pre-nuptial agreement, couples can lay the groundwork for a secure and mutually beneficial marriage, setting the stage for a strong and resilient partnership built on trust and transparency.
