Planning for marriage does not involve merely choosing the wedding day, location, guests to invite or even the flavour of the cake, but it also involves planning for the partnership intertwined with legal implications. A pre-nuptial or a post-nuptial agreement does not mean that a partner does not love you, rather it means they are invested in making the relationship work and protecting you in case of a failed marriage.
Are pre- and post-nups unromantic?
Many clients that come to Withers seeking advice on the mechanism of pre- or post-nups have not yet discussed this taboo or unromantic topic with their partner/fiancé. They tend to avoid mentioning or introducing this topic of conversation, and dread approaching the terms of the document with their partner/fiancé. Many consider pre-nups or post-nups a one-way ticket to rejection when proposed, or that they foster incessant unhappiness when presenting the terms. When you have pre-marital wealth that you want to segregate or wealth from multiple generations of family you want to rule out, you might want to contemplate the nuptial agreement process.
How enforceable are they in Court?
In Hong Kong, pre- and post-nups are not always legally binding, but a significant weight will be given by the Court where it is fair to do so. The key is that the couple must have entered into the agreement willingly and with all the material information to their decision before signing the agreement, intending the terms to govern the financial consequences of the marriage coming to an end, and that it is fair without creating an evident disparity in wealth amongst the couple. Ultimately, nuptial agreements protect both partners and are expected to hold up in Court.
Despite increasing judicial recognition in Hong Kong, pre- and post-nups still possess an aura of wariness about a partner/fiancé who dares to propose them. Conceivability, there is an inherent thought ingrained that once the nuptial agreement is signed, a marriage breakdown is bound to take effect.
Making the conversation comfortable for both parties
Alternatively, pre- and post-nups, when constructed with care, honesty and transparency, is a manner of expressing love and devotion that you are concerned about each other's financial welfare. One of the core issues creating conflicts after a marriage breakdown involves finances. By clarifying who owns certain assets, such as the companies, vehicles, jewels and other key items, a pre- or post-nup can actually help you avoid misunderstandings and conflicts down the road and give you peace of mind knowing that you have planned for all eventualities. These agreements account for circumstances and changes that are unanticipated and should be treated as a type of insurance to make difficult situations less stressful. In place of arguing over financial arrangements in the event of a relationship breakdown when emotions are high, curating a plan to ensure mutual protection no matter what happens is a true confirmation of affection.
If you are unsure where to start, take into account the following suggestions:
- Introduce and normalise the idea from the on-set. Taking the 'beating around the bush' approach could create uncertainty, and directly proposing your thoughts guarantees transparency. Plan to discuss and confirm the nuptial terms in a neutral environment.
- Generate an inventory containing your current income, savings, assets, liabilities to clearly identity items to deal with. In the unfortunate event of divorce, having a list of prospective large expenses such as for accommodation of children will be useful when drafting terms to secure a favourable outcome.
- Maintain open communication. Through mutual planning, it will
be straightforward to understand what is considered fair and to
work through scenarios to consider together such as:
- Unexpected changes in circumstances. These can include medical incidents, relocations due to work, or passage of time. If the marriage breaks down, it is desirable to contemplate an outcome considered reasonable for both partners.
- Both you and your partner's career plan. Mull over questions regarding whether there are any disadvantages allocated to a partner as a result of childcare or other responsibilities, how your careers will be reinforced and how expenses will be controlled.
- Your priorities. Think about your future and how your financial welfare can be implemented.
Alternative dispute resolution
Keep in mind options of specialist mechanisms such as collaborative practices or mediation to discuss in a holistic environment with a neutral third party, bearing in mind both partner's interests. Taking into account professional legal advice in your jurisdiction or other jurisdictions, should you plan to relocate, is advisable to further recognise your position with regards to the terms.
Planning for the future
Viewing pre- and post-nups in a positive light demonstrates its nature as a financial planning device to constitute assurance in case of unanticipated marital events. Having this difficult conversation leads to trust and confidence in your relationship. Relationships are primarily engrained on keeping an open line of communication and cultivating a strong and honest connection. We encourage you to pursue these so-called painful discussions now. For us, we believe pre- and post-nups are agreements which abound endearments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
