There has been an increasing demand for prenuptial agreements in Singapore, based on feedback from our interaction with lawyers. Why is this so?
After all, prenuptial agreements are still taboo for most Singapore couples. There is a stigma attached to it. If a couple is serious about working at a relationship, and married “till death do us part”, how can they start preparing for separation? The mere mention of prenuptial agreements seems to suggest that someone is not willing to give his/her all to the marriage.
However, we must remember that not every marriage is between two young optimistic people prepared till death to struggle together through the vicissitudes of life. Sometimes, getting a prenuptial agreement is the responsible and mature thing to do. There may be certain issues that should be discussed and agreed upon before marriage. It shows that the couple can resolve issues together, which bodes well for the marriage ahead.
Below, we discuss 5 such situations.
1. When one of the couple is much wealthier than the other
There may be tension if one party comes into a marriage with a lot more assets than the other. A prenuptial agreement can set out the split of assets in the case of divorce, as well as the amount of maintenance that should be paid.
If there was no agreement, in case of divorce, each side will submit their case and the assets will be subject to the unpredictability of the court splitting the assets. See here for more information on how the court splits matrimonial assets.
Having a prenuptial agreement gives a measure of certainty to the split of assets. Each side knows where he/she stands with regard to the split of assets, and the settling of financial issues keeps them from creating conflict during the marriage.
2. When the couple has children from previous marriages
In this scenario, a prenuptial agreement can be the starting point in making provisions for children from previous marriages. It can set out that in case of death, certain assets should be left to children from a previous marriage. Wills should still be made to ensure the legality of such provisions.
The prenuptial agreement can also make provisions for child support of children from previous marriages in case of divorce.
3. When one or both people are business owners or entrepreneurs
Business owners going into a marriage might not want to run the risk of having the ex-spouse getting a split of their company shares. This is especially so if the business is a closely-held family business, and the business owner’s family may be the one that needs the assurance.
Other examples where the retention of company shares in case of divorce is especially important are businesses with the business owner’s name on it, and private businesses run with other people. In these cases, the company shares have more than monetary value: they represent the reputation and professional relationships of the business owner.
Having a prenuptial agreement makes it more certain that the business owner will get his shares in case of divorce.
4. When it is a cross-border marriage that involves expatriates
The breakdown of a cross-border marriage is a complicated matter. Who will have custody of the kids? Which country will the kids be brought up in? There may also be matrimonial properties in multiple countries, making any resolution challenging.
A prenuptial agreement resolves these issues if they ever arise. In fact, some of these issues, such as the country to stay in, should be discussed and resolved by the couple even if there is no thought of ever separating. Making a prenuptial agreement may help in discussing such issues.
5. When one of the couple doesn’t plan to work
If one of the couple plans to stay at home to raise a child, for example, the couple can agree on financial provisions so that the stay-at-home mum or dad can have a financial plan in the event of a divorce. Although the court can award maintenance in the event of divorce, there is often dispute as to the amount of maintenance that should be awarded.
With all that said, it has to be noted that prenuptial agreements are not always enforceable in Singapore, although they have persuasive value with the courts. The courts would not usually want to interfere in issues that have already been agreed upon between the parties. For more information, see our article on Prenuptial Agreements in Singapore.
For further advice for your specific case, feel free to get in touch with lawyers for prenuptial agreements.