Prenuptial Agreements FAQ`s
- - Are contracts entered into by spouses before they get married;
- - Stipulate how matters will be resolved, should the parties enter into divorce proceedings; and
- - Are subject to the usual legal doctrines and requirements forming contract law (i.e. there must be consideration and the agreement must not have been reached by vitiating factors such as misrepresentation, duress, fraud, unconscionability or undue influence).
A prenuptial agreement:
- - Allows parties to be more certain about the separation of finances between them in a marriage;
- - Ensures that (i) assets acquired or (ii) debts incurred prior to a marriage by one party will be less likely to affect the other party upon marriage;
- - Aids in the separation of assets after a divorce; and
- - Gives security, especially to the owners of big family businesses and valuable family heirlooms.
In Singapore, a prenuptial agreement is not strictly enforceable. A prenuptial agreement’s enforceability depends on how the court assesses the provisions of the agreement and the specific circumstances of the case.
Division of Matrimonial Assets: Under s112 of the Women’s Charter, the power to divide the matrimonial assets of the parties in a divorce proceeding lies with the court, who does so in a just and equitable manner by referring to the prescribed circumstantial factors. In deciding what is just and equitable, the court will examine the contents of the agreement in its entirety as one of the factors. However, if it contradicts the requirements under the Women’s Charter, it will not be upheld.
Maintenance: Under s114 of the Women’s Charter, the courts must follow the prescribed instructions before awarding maintenance. Prenuptial agreements may be referred to but the courts are not mandated to follow them. Hence, if the prenuptial agreement stipulates an insufficient maintenance, it will be struck out and instead, be determined by the courts.
Custody, Access and Care and Control of Children: In granting custody, access and care and control of children, the courts have strictly held that their decision is based on the best interests of the children. Hence, prenuptial agreements governing these areas are generally not enforceable. It will be best to exclude provisions on such areas from the prenuptial agreement.
The following terms are usually included in a prenuptial agreement:
- (i) Property owned by each of the two parties;
- (ii) Maintenance, should the marriage break down (note that a husband cannot contract out of paying maintenance to his wife or his children);
- (iii) Division of property if one of the party dies or if the parties undergo a divorce;
- (iv) Individual debt liability of either of the parties; and
- (v) the Governing law of the prenuptial agreement (note that this should be expressly stated as otherwise, the courts will assess it based on the implied choice between parties or if there is no express or implied choice, the system of law which the agreement has the closest and most real connection to. This results in uncertainty over which law would be followed and hence, the better choice is to expressly state it in the agreement.).
Given that a prenuptial agreement may not be enforced if it contravenes the Women’s Charter, it is advisable to engage an experienced family lawyer who will be able to draft the provisions of the contract. Such a specialized family lawyer will be better able to understand
- - the intricacies of the divorce law in Singapore; and
- - the courts’ interpretations of such prenuptial agreements.
This will give the parties an additional assurance that their prenuptial agreements would be more likely to be upheld by the courts.