Prenuptial Agreements FAQ`s - Divorce

Prior to entering into a marriage, it may be wise for parties to first consider entering into a pre-nuptial agreement with a view of protecting their individual rights and to help provide a roadmap of how things should proceed in the event parties decide to amicably separate in the future.

What are prenuptial agreements?

Prenuptial agreements:

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).

Why should I have a prenuptial agreement?

A Prenuptial agreements:

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.

A Pre-Nuptial Agreement may not always be legally enforceable.

How does one ensure the Pre-Nuptial Agreement is one that is accepted at Singapore Courts?

A validly executed pre-nuptial agreement will be taken into consideration by the Singapore Courts in the event parties commence divorce proceedings pursuant to s 112(2)(e) of the Women's Charter. Parties may fully rely on the terms as stated in the pre-nuptial agreement if neither party disputes the terms stated in the agreement.

In the event one party disputes the terms of the agreement, the Court will take into account the agreed-upon terms in the pre-nuptial agreement, amongst other factors when making a determination on whether the division of assets is 'just and equitable' or if the terms for the children's issues are in the best interest and welfare of the children.

As such, a pre-nuptial agreement is enforceable subject to the Court's scrutiny. Another issue you may bear in mind is that the Singapore Courts tend to give more weight to a post-nuptial agreement made in contemplation of divorce over a pre-nuptial agreement.

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.

In order to ensure there will be no issues with regard to the validity of the pre-nuptial agreement, we suggest that your prospective spouse also obtain independent legal counsel to ensure his/her rights are protected in the agreement.

There is also a need for parties to make full and frank disclosure of the assets each party owns prior to signing the agreement. The execution of a Pre-Nuptial Agreement is usually signed before a Notary Public or a Commissioner for Oaths to further ensure that the agreement is legally enforceable at the Singapore Courts.

Would it be better to get married in Singapore or any other country so that the Pre-Nuptial Agreement can be better respected in Singapore court?

In the pre-nuptial agreement, parties are encouraged to include a clause that identifies the governing law of the pre-nuptial agreement in the event of a dispute. If you have clearly identified that Singapore laws will prevail, the Singapore Courts will have jurisdiction to apply the agreement in Singapore. As for your wedding, so long as the wedding is registered in the Singapore Registry of Marriages, there should be no issue even if the wedding first takes place in any other country.

What are the standard terms to include in a prenuptial agreement?

The following terms are usually included in a prenuptial agreement:

Property owned by each of the two parties, CPF accounts, insurance, bank accounts, motor vehicles, shares and investments;
Maintenance, should the marriage break down (note that a husband cannot contract out of paying maintenance to his wife or his children);
Division of property if one of the party dies or if the parties undergo a divorce;
Individual debt liability of either of the parties; and
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.).

For completeness, you may include a clause to expressly exclude the assets each party owned before the marriage from the pool of matrimonial assets

How should we handle our respective income and financial contributions within the agreement?

You may expressly include a clause to the effect that each party will contribute x% of their income towards the family. You can also state that it is to be treated as separate if it remains in the respective parties' sole bank account unless it is deposited into the parties' joint bank account.

Are there legal requirements for full financial disclosure between the parties before entering into a Pre-Nuptial Agreement?

It is encouraged that there shall be full and frank disclosure of each party's assets before entering into the agreement to ensure there are no issues with the enforceability of the pre-nuptial agreement.

How should we document our financial information to avoid disputes in the future?

Keeping the relevant financial records from before marriage and after is a must to avoid any future complications.

In order for the Pre-Nuptial Agreement to be better respected, it is better for both parties to have their own legal representation during the drafting and signing of the agreement right?

Yes, it is highlight encouraged for the prospective spouse to obtain independent legal advice and to have the terms translated to him/her if he/she is not fluent in English to avoid any future disputes which may render the agreement invalid.

What are the common pitfalls if we do the above? How to minimize any possible damages?

With full and frank disclosure of each party's assets, and with both parties being legally represented, it is expected that with the legal advice received, there should be no claims of misrepresentation, signing under duress or fraud with the Pre-Nuptial Agreement.

The common pitfalls thereafter will be if parties do not adequately address the individual issues. Such issues include how the divorce may take place and in which courts, the children's issues for current and future children (if any), the division of matrimonial assets, maintenance for your wife-to-be and the possibility of relocation (if relevant). You may also include terms in contemplation of a separation before divorce, and importantly, the governing law applicable.

How should a prenuptial agreement be drafted?

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.

Does signing a Post-Nuptial Agreement after our marriage to reconfirm our Pre-Nuptial Agreement helps to make the agreement more legally tender?

The Singapore Courts do give more weight to a post-nuptial agreement made in contemplation of divorce. If you were to sign the post-nuptial soon after the wedding and many years before the divorce, the Singapore Courts would give it less weight in comparison to a post-nuptial agreement made relatively closer to the date of the divorce.

What are the formalities and requirements for executing a Pre-Nuptial Agreement?

The usual contractual formalities apply when the agreement is drafted and executed, which includes giving sufficient time to negotiate and draft the agreement, receiving independent advice and signing before proper witnesses.

What factors could potentially invalidate a Pre-Nuptial Agreement?

Some of the invalidating factors include:

Should either party claim that the agreement was signed under misrepresentation, duress or fraud, then the pre-nuptial agreement is invalidated.
Should any of the terms included in the agreement be contrary to the prevailing Singapore laws, then the clause or the entire agreement may be rendered invalid depending on the drafting of the agreement.

How can we protect ourselves against future challenges to the agreement's validity?

By ensuring the pre-nuptial agreement is drafted thoroughly and by ensuring both parties obtain independent legal advice and make frank and full disclosure of assets before signing it.

How long does it take to prepare a Pre-Nuptial Agreement?

The drafting of the pre-nuptial agreement can be done expeditiously if the parties are in agreement on the terms to be included. If there are no issues, the agreement can be drafted and signed within a few weeks. The process is only delayed when the parties wish to negotiate the terms further and if the other party engages her own lawyer to negotiate on her behalf.

Conclusion

At GJC, we have drafted many such agreements for international and local couples. Given the potential acrimony and heightened emotions during the end of marriages, having a pre-nuptial agreement as a fail-safe will allow both parties to revert to terms that were agreed upon when parties were more reasonable, thus facilitating an amicable end to the marriage and avoiding a drawn-out acrimonious divorce.

Our experienced lawyers can provide advice on how best to draft the Pre-Nuptial Agreement according to the unique set of needs of each couple and ensure that the agreement is legally enforceable at Singapore Courts.

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.

Singapore: Prenuptial Agreements FAQ`s