Guide to Prenuptial Agreements

A prenuptial agreement is often thought of as a sort of insurance policy against divorce. It is, in effect, a contract that spouses both sign, before they marry. If the worst does happen and the parties want to divorce, then it can give the parties some certainty about their rights to their own assets, as well as matters of property, maintenance, and of course child care.

Benefits of a prenuptial agreement

In Singapore, prenuptial agreements are not automatically enforced. However, there are still many benefits to entering into one, such as:

  • It can protect the parties from each other’s debts.
  • Assets owned prior to marriage are protected.
  • The agreement can be tailored to your specific circumstances. For instance, you may agree that businesses and family heirlooms should not form part of the pool of matrimonial assets.
  • Parties are provided with certainty as to what happens to their financial arrangements should a divorce occur.

Contents of a prenuptial agreement

Often a prenuptial agreement will cover many issues relating to the parties’ married life. Some of the more common matters addressed include questions of maintenance, child care, asset ownership, and what should happen in the event of a divorce.

Specific terms in such an agreement might be:

  • The law which should govern the prenuptial agreement
  • How liabilities and debts that one or both spouses owe should be dealt with
  • How much maintenance the wife should receive if a divorce occurs
  • How the parties’ assets should be divided during the separation, death or divorce of one spouse
  • Property ownership during the marriage.

Prenuptial agreements vs postnuptial agreements

If parties enter into a contract after they have married, this will be known as a postnuptial agreement. The contents of it may not be that different from a prenuptial agreement, but note that the Courts in Singapore usually put greater importance on postnuptial agreements than they do prenuptial ones. This is demonstrated by section 112(e) of the Women’s Charter, which states that the Court should have regard to such postnuptial agreements in relation to how matrimonial assets are owned and divided.

Why is it the case the Courts emphasise the importance of postnuptial agreements rather than prenuptial agreements? The answer is that, usually, postnuptial agreements are drawn up in very different circumstances compared to prenuptial ones, being that parties would have taken into account an impending divorce.

Is a prenuptial agreement valid and enforceable in Singapore?

In Singapore, the law is more complex than in other countries, where prenuptial agreements are more often recognised and legally binding. In Singapore the agreement is not always binding and enforceable. The terms and conditions contained within the document are always scrutinised by the Court before the agreement is accepted as being binding.

In the first instance, the basic requirements of contractual law must be complied with in the agreement. The agreement may be set aside if it fails to disclose all assets, for example, or all evidence of duress, fraud, lack of representation or unfairness at the time the agreement was signed.

Secondly, the Court will look at how just and reasonable the agreement is, when deciding on whether to enforce it or not. The case of TQ v TR [2009] 2 SLR(R) 961 established the law on prenuptial agreements in Singapore. This case saw the Court of Appeal discuss the legal enforceability of prenuptial agreements relating to ancillary matters, as follows:

Dividing matrimonial assets

Section 112 of the Women’s Charter governs how matrimonial assets should be divided. The Court is the ultimate arbiter of how assets are divided, “in such proportions as the Court sees just and equitable”.

The individual circumstances of the case will impact on the weight that a prenuptial is given by the Court. If the agreement abides by contractual principles, then the Court will ordinarily consider it when exercising their power.

Sometimes, foreign individuals will be involved in a divorce. In these cases, a Court might be more willing to accept the legality of the prenuptial agreement if it is governed by and valid according to the foreign law (as long as that overseas law doesn’t conflict with public policy in Singapore).

Maintenance

Though the Women’s Charter does not mention maintenance, there is caselaw on it. The case of TQ v TR [2009] held that all prenuptial agreements pertaining to the maintenance of the wife and/or children should be scrutinised by the Courts.

The Court would be especially vigilant regarding prenuptial agreements relating to child maintenance, and would be reluctant to enforce agreements which they think are not in the best interest of the children. This demonstrates the importance the Courts place on the welfare of the children, which is always their overriding consideration.

Child custody, care and control

As the Court’s main concern is the welfare of the children involved, they will start with the premise that an agreement will not be enforceable, unless the party relying on it can clearly demonstrate that it is in their child’s best interests.

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Lim Chong Boon

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