Family Law / Divorce / Prenuptial

A. Prenuptial agreement

A prenuptial agreement (also known as a "premarital agreement") is an agreement between a couple before they get married that stipulates how their finances will be managed if they divorce or separate in the future. It would generally include the financial distribution of assets and the financial support to their children (if any).

Talking about a prenuptial is a romance killer, in particular shortly before you get married, which is supposed to last forever (after all, you promise to “love and cherish … for so long as you both shall live” in your wedding vows).  Unfortunately, negotiating a prenuptial is not being overly pessimistic about a risk that will never materialise. Divorce rates in many developed countries are close to half and a prenuptial agreement is necessary to protect the wealth accumulated by a husband or wife before they get married, or even after marriage. This is especially true if you come from a wealthy family, or if you plan to inherit your parents' property.

1. Reasons for a Prenuptial Agreement

 Under the laws of many common law jurisdictions, married couples automatically receive 50% of their spouse's financial and asset claims in a subsidiary relief process for divorce. If the couple is from different economic classes (one being wealthy and the other being poor), the rich family would want to prevent the other half from gaining part of their family assets. By signing, the economically weaker spouse can show that they are married for love, not for money. A prenuptial agreement can also reduce the possibility of a messy divorce proceeding. By agreeing to the terms upfront, they do not need to resolve any differences through litigation, which may be very costly.

Unfortunately, the prenuptial agreement may not be recognised and enforceable in many common law jurisdictions. You should check with your local lawyer on the validity of a prenuptial agreement in your jurisdiction before you sign one. However, if it can be shown that (i) the couple fully understood the terms of the prenuptial agreement when it was signed, and (ii) it was signed willingly and not by coercion, the court may give some weight to it to demonstrate the original intention of the couples. In any case, the court will primarily rule in the spirit of "fairness" between the couple in a divorce proceeding. It is common for the court to protect the economically weaker spouse.

Things may be slowly changing with the English case - of Radmacher v Granatino in which the English Supreme Court has ruled that prenuptial agreements regulate a couple’s financial affairs in the event of their separation and/or divorce are reasonable and not contrary to the principles of divorce law. The courts of many common law jurisdictions are likely to follow the case as a convincing precedent.

2. Content of a Prenuptial Agreement

The content of a prenuptial agreement may vary widely, but Prenuptial agreements usually cover three things after a divorce:

• How the property will be distributed - a prenuptial agreement lays out specific terms for the treatment of the following:

  The assets, liabilities, and income acquired by both partners before and during the marriage.
  The joint assets, liabilities, and income acquired during the marriage.
  The gifts, inheritances, and trust interests received by both partners prior to or during the marriage.

• How to support a spouse (of children, if any) after a divorce

• Who can obtain existing financial assets or estates, such as property, trust funds, business, shares, etc.

The couple should indicate their willingness to be bound by the prenuptial agreement. It should be signed voluntarily and not under stress, coercion, or undue influence. The couple should also allow enough time to negotiate the terms and conditions of the agreement and not signed it on the eve of the wedding (which may be a sign of coercion). The couple must be fully aware of the meaning and existence of a prenuptial agreement. The couple should provide sufficient, fair, and reasonable information with no substantial lack of disclosure of income, assets, and liabilities. It would be best if each party could seek independent legal advice if necessary. Most of all, the fairer the prenuptial agreement is drafted, the more likely it is for the court to enforce it.

B. Divorce

Although the legal framework for divorce may be different in different common law jurisdictions, the main basis for filing a divorce application in most countries is that the marriage has irreparably broken down.

1. Grounds for Divorce

To meet the court’s requirement of “marriage has irreparably broken down”, there are generally five different situations one can rely on. Three of which relate to the behaviour of the other party - namely adultery, unreasonable behaviour, desertion/abandonment for a period of time (normally 1 – 2 years after desertion). The other two relate to separation, one party may unilaterally file for divorce after being separated for a period of time (normally 2 – 5 years after separation). The period of time varies depending on the jurisdiction.

2. Mutual Divorce

The parties may agree to file for divorce after being separated for a period of time (normally 1 - 2 years after separation) if it is a mutual divorce or with the consent of the other party. The period of time varies depending on the jurisdiction.

Therefore, if the dissatisfied spouse wishes to have a non-controversial commencement of the divorce process, it is easier to wait for the completion of the time period after separation before formally ending the marriage. On the other hand, if the dissatisfied spouse decides to file an application for divorce immediately, one must prove the other party’s behaviour amount to “unreasonable behaviour” or “adultery”, which may be difficult to prove.