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Prenuptial Agreement – Are They Healthy to a Relationship?

What is a prenuptial agreement?

Prenuptial agreements (commonly known as a pre-nup) refers to agreements that spouses enter into prior to their marriage. In this modern society, it is undoubtedly true that such a social trend is on the rise, given the increased affluence of the local demography. As such, many couples regard them as a practical solution or as an added form of “insurance” in view of the possibility of a divorce. In the eyes of the law, they will, in effect safeguard their respective rights overs many contentious issues during a divorce. Some of these rights include proprietary rights in property, responsibility of any premarital debts and the division of assets upon the divorce.

What are the laws that govern them?

There have been many recorded cases whereby the Singapore Court of Appeal (the highest appellate court) upheld the validity of a prenup agreement, this is shown in the landmark case of TQ v TR [2009] SGCA 6. However, the Court of Appeal was quick in their judgment to warn that these agreements are premised around certain legal requirements, and that not all are enforceable. In the eyes of the court, a prenuptial agreement is contractual in nature and the basic requirements of a legally valid contract is that it must be entered into voluntarily, supported by consideration and not vitiated by factors such as duress, fraud, bad faith or misrepresentation. In addition, any clause found to be contrary to the Women’s Charter (Cap 353) will be rendered void. The court ultimately has the inherent jurisdiction to make a suitable order.

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Is it right for me?

In contemplating whether a prenuptial agreement is the appropriate step to take, one must weigh up the advantages and disadvantages of drafting such an agreement taking into consideration the attitude and mentality of your significant other.

Advantages

The taboo of a prenuptial agreement (as it is made in contemplation of a divorce) has been increasingly overshadowed by the practicality of the modern day couple. Couples are starting to realise there are many inherent advantages, namely:-

  1. They provide clarity as to the financial arrangements between the parties in the event of a divorce. This is particularly important when there is a distinct imbalance of wealth existing between the parties;
  2. Many modern day individuals amass a substantial amount of wealth even before marriage. Therefore, such agreements will in effect protect such assets that had been acquired by each party before the marriage;
  3. Parties have control of the division of assets and can also protect specific assets such as inheritance, heirlooms or family businesses.

Referred

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