Couples who opt to sign a pre-nuptial agreement, or a "pre-nup", before their marriage appreciate the clarity that it offers with regard to the couple's individual and joint financial matters. Pre-nups are effective in avoiding acrimony, expensive legal bills, and drawn-out court proceedings. Here are 10 things to know if you and your partner are interested in entering into a pre-nuptial agreement.
1. Where you choose to sign matters
The country that governs your agreement impacts enforceability, which is why it is important to have an agreement drafted by specialist family lawyers who have a sound network of family lawyers in other countries. This allows you to ensure that all international elements are considered in the agreement.
2. Third parties cannot be bound by a pre-nuptial agreement
As a pre-nuptial agreement is only between a couple, third parties (e.g. parents, siblings, etc.) cannot be bound. If this is necessary, it should be raised to the family lawyer, who can explore alternative solutions to protect your rights vis-à-vis a third party.
3. A pre-nuptial agreement is not the be-all and end-all
A common misconception is that pre-nuptial agreements cannot be changed once they are signed. While this is true in relation to the specific document, it does not prevent couples from signing post-nuptial agreements to tackle new issues that arise during their marriage or mutually consent to updating any of the terms originally agreed upon.
4. Refrain from making arrangements relating to children
It is inadvisable to make pre-emptive arrangements for any children conceived during the marriage in the event of a divorce, as such agreements are rarely upheld by the court. This is because the child's best interests are best determined by the court at the time of the divorce. If a divorce is imminent, it is preferable to document any arrangements relating to children in a post-nuptial agreement.
5. Seek independent legal advice
Having independent legal representation ensures that you and your partner are able to navigate the process and reach an understanding on how your affairs will be settled in the event of a divorce. It also ensures that the agreement is enforceable, as one party cannot later claim ignorance of the agreement.
6. Disclosure is paramount
Couples need to make full and frank disclosure of all assets and financial resources they presently have, or assets which they believe they will acquire. This includes any inheritances or gifts they might receive in their lifetime. Failing to do so could render the agreement unenforceable.
7. Understand what assets you own
It is crucial to be aware of what assets you have, and which should be included in a pre-nuptial agreement. Is a joint bank account shared with your parents considered a personal asset? What about distributions from a trust fund from which you receive occasional payouts? This is where hiring family law specialist is crucial, as they can create a comprehensive pre-nuptial agreement that is tailored to your unique circumstances.
8. Acknowledge the difference between assets acquired before and during a marriage
In Singapore, assets acquired before a marriage will not be split in a divorce, unless they are used by the spouse during the marriage, or if they have been liquidated to acquire another asset during the marriage. For assets acquired during a marriage, these will likely be split between both parties upon divorce. However, if both parties reach a mutual understanding regarding what assets should or should not be split upon divorce, this will be reflected in the pre-nuptial agreement. This practice is recommended to ensure clarity over all financial matters and help couples save substantial time and legal fees.
9. Discuss the need for a pre-nuptial agreement with your partner
Both parties must willingly sign a pre-nuptial agreement. Beyond the moral concerns, coercing your partner into signing something they are not comfortable with renders a pre-nuptial agreement void. Broaching the topic with your partner may incite feelings of uneasiness and displeasure, but a pre-nup is the best way to plan for the future. It may not seem romantic or even necessary, but should the unwelcome happen, it will save you and your partner substantial time and effort.
10. Be clear about your intentions
Last but not least, be clear with your partner and lawyers involved about what your intentions are with the agreement. While marriages may change, the capacity for open and honest dialogue should always remain. Doing so prior to signing a pre-nuptial agreement is an ideal first step, as you can only benefit from clarity about your wishes and expectations.
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.
