Prenuptial and Postnuptial Agreements in Singapore

Prenuptial and postnuptial agreements are legal documents that couples can use to outline financial arrangements between them in the event of divorce or separation.

Although no one wants to contemplate the breakdown of the relationship when all is going well, more couples realise that it is wise and practical to talk about financial expectations, and what would happen if the relationship fails.

Prenuptial and postnuptial arrangements are becoming increasingly popular in Singapore, not just for high-net-worth couples.

In a prenuptial or postnuptial agreement, couples can also include arrangements for the children, in addition to dealing with assets and financial arrangements.

This article will discuss pre and postnuptial agreements, what to include, when they are used, and their differences. It will also look at the benefits of both, their enforceability, how the courts will view them, and any disadvantages of entering into a pre or postnuptial agreement.

What is a prenuptial agreement?

A prenuptial agreement, often called a prenup, is a written contract that two individuals agree to before marriage.

Its primary purpose is to determine how assets and liabilities will be divided in a divorce or separation, and what will happen to the children from the marriage. It can also include financial arrangements during the marriage.

What is a postnuptial agreement?

A postnuptial agreement, or postnup, serves the same purpose but is entered into after the marriage. It can be entered into at any stage during the marriage.

Couples often use a postnuptial agreement when divorce proceedings have already commenced and want to reach an amicable arrangement on the ancillary matters.

The court will confirm the agreement as a consent order if it complies with all legal requirements.

Both agreements aim to clarify and secure financial matters, plus the children’s arrangements. It can also address various aspects such as the division of assets, maintenance payments, ownership rights to property, and financial responsibilities during the marriage.

What to include in a pre or postnuptial agreement

Prenuptial and postnuptial agreements typically include agreements relating to the following aspects:

• Division of Assets – Typically, couples will set out how their assets will be divided in the event of divorce or separation. This can include assets acquired during or before the marriage. The division doesn’t have to be 50:50.
• Property Ownership Rights – It could be important to clarify who owns what, e.g. if one party owns a house, a business, or investments before the marriage. This should also cover things like inheritance during the marriage.
• Maintenance Payments – Specify any financial support or maintenance payments that one party may be entitled to receive from the other.
• Financial Arrangements – Stipulate financial obligations and responsibilities during the marriage, such as paying bills, expenses, and debts. It is also important to stipulate how debts will be dealt with.
• The law that will govern the agreement.

When to use prenuptial and postnuptial agreements

Prenups and postnups are always a good idea, but there are specific scenarios where they are essential.

Examples include:

• When one or both parties have significant assets or wealth they want to protect.
• When there are children from previous marriages or relationships, and there is a need to ensure their financial security.
• When one party wishes to maintain ownership or control over specific assets, such as a family business or inheritance.
• When there are concerns about potential disputes over financial matters in the event of divorce or separation.

Are prenuptial and postnuptial agreements enforceable?

Firstly, prenuptial, and postnuptial agreements are contracts, meaning they must comply with the legal requirements for a valid contract to be enforceable.

Furthermore, the Women’s Charter governs pre and postnup agreements in Singapore. To be enforceable, they must comply with its requirements.

Sec 112 of the Women’s Charter stipulates that marital assets must be divided in such proportions that the court thinks “just and equitable”.

Sec 113 of the Charter gives the court the power to order a husband to pay maintenance for his ex-wife.

Suppose the prenup or postnuptial agreement, for example, says the wife cannot claim maintenance. In that case, such a clause might not be enforceable. The same applies where the property division is not just or equitable.

So, although they are regarded as legally binding contracts, prenups and postnups are not automatically enforceable in Singapore. The courts will only enforce a prenup or a postnup if it is a valid contract, and it complies with the provisions of the Women’s Charter.

Whilst a well-drafted agreement is generally enforceable, the court has the discretion to set aside any clauses deemed unfair or contrary to public policy.

Factors that may affect the enforceability of these agreements include:

• One (or both) of the parties failed to provide full and honest disclosure of their assets, liabilities, and financial circumstances when entering into the agreement. Such failure can be seen as fraud or misrepresentation, making the contract invalid.
• If the parties consulted one lawyer and the court has reason to suspect that one party’s rights were not fully understood or protected, it might be grounds for not enforcing the agreement. Each party should seek independent legal advice before signing the agreement to ensure that their rights and interests are protected. It must be clear that there was no coercion in signing the agreement.
• Suppose the court regards the terms of the agreement as unfair, unjust, unreasonable, or unconscionable. In that case, it may refuse to enforce the agreement or a particular clause.

Ultimately, the enforceability of the agreement depends on its fairness and legality.

What are the differences between prenuptial and postnuptial agreements?

The content of prenuptial and postnuptial agreements are often very similar.

The primary difference between prenuptial and postnuptial agreements is the timing of their execution. A prenuptial agreement is entered into before marriage, while a postnuptial agreement is executed after the marriage.

However, both agreements serve the same purpose of outlining financial arrangements in the event of divorce or separation, and cover similar aspects such as division of assets, alimony payments, and property rights.

How does the court view prenuptial and postnuptial agreements?

The court generally views prenuptial and postnuptial agreements the same. However, the timing of execution may be an important factor when the agreements have conflicting terms.

The courts tend to attach greater weight to postnuptial agreements as they are usually more current, and the circumstances may differ from when a prenuptial agreement was executed.

Often, when a couple enters into a postnuptial agreement, they are already contemplating divorce, and the agreement reflects their recent attitudes.

What are the benefits of prenuptial and postnuptial agreements?

Prenuptial and postnuptial agreements offer several benefits, including:

• Protecting your assets – assets and wealth accumulated before and during the marriage can be protected, safeguarding each party’s financial interests.
• Clarity and certainty – defining what will happen in divorce or separation reduces the risk of potential conflict and uncertainty when the relationship breaks down.
• Preserving family wealth – where there are family businesses, generational wealth, or significant inheritances, prenuptial and postnuptial agreements can help preserve family wealth and assets by excluding them from the matrimonial property.
• Flexibility – couples can tailor their agreement to suit their specific circumstances and preferences according to their unique financial concerns and objectives.
• Reflecting any change in circumstances – a postnup is a great way to reflect any change in circumstances since the marriage, e.g., one party unexpectedly inherits significant assets and wants to protect them.
• Expediting divorce proceedings – agreeing on the ancillary matters beforehand can lead to a quicker and uncontested divorce.

Are there disadvantages to having a prenuptial or postnuptial agreement?

There are some potential disadvantages, including:

• Some may feel that requesting a prenuptial or postnuptial agreement is a sign of distrust or lack of commitment. This perception can place strain on the relationship.
• Discussing and negotiating the terms of a prenuptial or postnuptial agreement can be stressful for couples, especially if it involves sensitive issues such as family wealth or asset division.
• There is always a risk that specific clauses may be unenforceable if the court deems them unfair or unreasonable, meaning there is a level of uncertainty and the potential for legal disputes.
• When it concerns child custody and visitation rights, the court will always focus on the child’s best interests. The court will not enforce the agreement if it is not in the child’s best interest. The child’s welfare is always paramount.

Do you need a lawyer to draft a prenuptial or postnuptial agreement?

Technically, you don’t need a lawyer to draw up a prenup or postnuptial agreement.

Prenuptial and postnuptial agreements are also not compulsory. Still, they play a significant role in modern relationships, providing couples with a means to protect their assets, clarify financial expectations, and plan for the future.

While these agreements offer various benefits, they also have potential disadvantages, and may not always be enforceable in court.

When drafting these agreements, seeking legal advice can ensure they are fair, reasonable, and legally binding. This is especially true when your circumstances are complex.

Although a single lawyer can draft a pre or postnuptial agreement, if there is a possibility of disagreement between the parties, they should consider getting their own lawyer to advise them on their rights and needs.

An experienced lawyer will help couples navigate the complexities of drafting prenuptial and postnuptial agreements with greater clarity, certainty, and peace of mind.