With more than 40 percent of developed world marriages ending in
divorce, more UHNW couples are getting a prenuptial agreement.
Earlier this year, US real-estate billionaire Harry Macklowe
announced that he would be getting divorced from his wife Linda,
after 57 years of marriage. It is likely to be an epic battle
because the couple reportedly never signed a prenuptial agreement.
While high-profile divorce is never easy, it can be considerably
mitigated with the signing of a pre-nup.
Pre-nups are already common in the US and in Europe, and their
popularity in Asia is growing. With more than 40 percent of
marriages in developed countries ending in divorce, these
agreements can save a lot of stress, heartache, time and legal
fees, particularly for ultra-high-net-worth (UHNW) individuals and
families whose financial affairs are more complex and who have more
to lose in a divorce.
Although not yet legally binding in Singapore, courts are
looking increasingly favourably at such agreements. In Hong Kong
the presumption is now that family courts should uphold nuptial
agreements if they are fair and if both parties fully understand
the implications. They should be an important part for any HNW
couples in planning their future lives together. A properly drafted
pre-nup is crucial to protect the assets of the party bringing the
majority of wealth into the marriage or to ring-fence any potential
inheritance or business interests.
The most challenging aspect of pre-nups, for most, is broaching
the subject with their partner in the first place. It is a
sensitive, awkward subject that could lead to a very negative and
embarrassing reaction during a time meant to be filled with
happiness and excitement.
Strong marriages are built on good communication so the best way
to avoid awkwardness is to broach the subject as early as possible
in a relationship, and to have a frank and open discussion about
your future together. It is also important to choose your moment
wisely. Pick a time to discuss getting a pre-nup when you have
plenty of time to talk things through properly and when your
partner is in a good mood. It may be useful to use friends of yours
as examples who may be able to talk to you both about their
experiences to make the process seem less alien.
It may be the parents or close relative of an engaged couple, or
even a shareholder or trustee, who feels the need to suggest a
pre-nup to an engaged couple rather than the couple themselves.
That person may worry about causing offence. However, by starting
the conversation so the couple don't have to, a 'third
person' can make the subject less personal for the couple, and
it will be more of a lifestyle choice. A lawyer can also be asked
to bring up the subject, making it even less personal.
Pre-nups can be very simple, dealing only with one asset, such
as vast family inheritance or a pre-marital bachelor pad,
provisions about to whom jewellery will belong, capital payments to
one spouse in the event of the dissolution of the marriage or
clauses setting out provisions for any future children. The pre-nup
can be as complicated and detailed, or as simple, as you like.
The agreement should be drawn up plenty of time in advance of
the big day. We recently represented a client whose spouse tried to
set aside a pre-nup on the basis it was drafted just three weeks
before the wedding. In that case, the pre-nup was given great
weight by the court, however, it is always wise to have the
agreement signed and sealed at least 28 days before the wedding.
The document can then be filed away and in ideal circumstances,
forgotten about, allowing the bride and groom to get on with their
lives and to enjoy the excitement of planning their wedding.
However, if the worst does ever happen, the pre-nup will be
You would insure against burglary or upon entering a business
contract, in the hope that nothing bad will actually happen, but to
make things as painless as possible if they do. It should be the
same for a marriage.
The article was originally published online inbillionaire.comon 19 August 2016.
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.
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The well documented case of Heather Ilott and her attempt to overturn her Mother's will appears to have come to an end with the Supreme Court ruling that, whilst she may have be granted some money from her Mother's estate, it is a far smaller sum than the Court of Appeal awarded.
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