Pre-Nuptial Agreements And The Purpose They Serve

 

Basically, pre-nuptial agreements which are popularly known as “pre-nups”, are agreements that couples who intend to get married enter into to protect their assets in the event they get divorced. 

Usually the pre-nuptial agreements cover the division of assets of both parties, spousal support/maintenance and custody, care and control of children. 

Most of the time, couples who enter into such agreement are well established and have substantial assets which they believe need to be protected in the event the marriage does not bode well for both parties.

Further, by having drawn up a pre-nuptial agreement, it gives the couple the knowledge and certainty as to what will happen to their assets, etc – if at all they decide to go their separate ways.

For the well-heeled, it definitely gives them a peace of mind in that they do not have to worry about their spouse taking all their money when they divorce. 

Also, in the circumstance of either one of the spouse being affluent in comparison to the other, the affluent spouse need not worry himself or herself to death if the person he/she is marrying is doing so only to attain his/her wealth especially in the event of divorce.

 

Does The Court Recognise Pre-Nuptial Agreements?

 

In the United States of America, pre-nuptial agreements are recognised.  However, this is subject to the different rules and requirements in each State. 

Therefore, parties have to decide in which State they wish to draw up the pre-nuptial agreements and ensure they comply with that particular State’s rules so that if the need arises, the pre-nuptial agreement can be enforced accordingly.

In the United Kingdom, the legal position is different in that pre-nuptial is not legally binding.  However, the position has shifted in that the English Courts do give weight  to pre-nuptial agreements when deciding the division of matrimonial assets. 

In the United Kingdom landmark case of Radmacher v Grantino 2009, the Courts recognised pre-nuptial agreement.   The appeal judge said that it has become “increasingly unrealistic” for the Court not to recognise pre-nuptial agreements. 

 

In this case, both parties were of high net-worth value.  At the hearing of first instance, the husband was awarded a substantial proportion of the wife’s wealth.

The wife appealed against the decision.  On appeal, the Court recognised the pre-nuptial agreement and reduced the husband’s share of the matrimonial asset substantially.

When the Court looks at the pre-nuptial agreements, it takes into account various factors amongst others, such as the financial position of both parties pre and post the pre-nuptial agreements, was it a fair agreement, etc.

 

Pre-Nup In Singapore

 

In Singapore, pre-nuptial agreements are not enforceable.  In the landmark Court of Appeal case of TQ v TR [2009] SGCA 6, the Court of Appeal recognised the pre-nuptial agreement entered into by the parties who were Dutch citizens. 

They got married overseas and had three children.  Subsequently, both parties and their children came to live in Singapore.  Things did not work out in the marriage and parties decided to go for divorce.

The Court of 1st instance recognised the pre-nuptial agreement and made no order as to the division of the matrimonial assets.  The Wife appealed against the maintenance amount ordered for the children and no order as to the division of the matrimonial assets. 

The Wife’s stand in respect of the pre-nuptial agreement was that the said Agreement was invalid and/or parties had abandoned the Agreement and as such it was no longer valid/applicable.

The Court of Appeal held that if it is a foreign pre-nuptial agreement, is valid in accordance with the foreign law and is not repugnant to the laws of Singapore and does not contravene any public policy in Singapore, the Courts here will uphold the pre-nuptial agreement. 

Further, there is no need to fulfil the further requirements of the Singapore common law of contract.

 

What about Singapore based pre-nuptial agreements? According to the Court of Appeal, the starting point is the “…. interaction of both statute law (here, the Act) on the one hand and the common law on the other.  Put simply, where one or more of the provisions of the Act expressly covers a certain category of prenuptial agreement, then that provision or those provisions will be the governing law.  Where, however, the Act is silent, then the legal status of the of the prenuptial agreement concerned will be governed by the common law. Needless to say, the pre-nuptial agreement must not contravene “any express provision of the Act and/or the general or specific legislative policy embodied within the Act itself will not pass muster under the common law.”

 

The Court held that the pre-nuptial agreement acts as an aid in assisting in the division of the matrimonial assets.  In Section 112 (2)(e) of the Women’s Charter, reference is made to any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce..”

The Court held that Section 112(2)(e) of the Women’s Charter does include pre-nuptial agreements i.e. Court will look to the agreement when the division of the matrimonial assets are divided. 

At the end of the day, the Court further held that “ultimate power resides in the court to order the division of the matrimonial assets”.  In doing so, the Court takes into account the circumstances of each case as well as all the relevant factors including the pre-nuptial agreement, if any.

However, caution must be exercised in that the pre-nuptial agreements per se are not enforceable.

 

The information contained on this website contains general information about our lawyers, firm and procedures and is not intended to constitute legal advice. Any person viewing or receiving information from this Website should not act or refrain from acting, on the basis of any such information without first seeking appropriate legal advice.

 

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