Lim Chong Boon quoted in Straits Times article entitled “Couple’s assets to be split equally as man’s actions differed from terms in prenup”

LIM Chong Boon quoted in Straits Times article on prenuptial agreements in Singapore

.Date: 3 September 2021

SINGAPORE – Couple’s assets to be split equally as man’s actions differed from terms in prenup

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Source: Straits Times
Article Date: 02 Sep 2021
Author: Theresa Tan

In their prenuptial agreement, they had agreed to “protect their separate property from claims from each other if they separate”.

A well-heeled couple contested their prenuptial agreement in court after their 16-year marriage broke down.

But while the Family Justice Courts (FJC) gave due consideration to their pact, it had the final say on how the couple’s assets were to be divided after the divorce.

In her grounds of decision released in late June, the FJC’s Presiding Judge Debbie Ong noted that the husband’s actions and words during the marriage differed from the terms in their prenuptial pact.

Hence, she did not think it was “just and equitable to give full weight to the prenuptial agreement”.

Such pacts detail each partner’s agreement on how their assets are to be dealt with in a divorce.

Judge Ong ruled that the couple, both 53, split their marital assets worth $13.2 million equally.

The couple have two children, aged 14 and 16.

The wife is a bank compliance officer earning $25,000 a month, while the husband is a personal investor who receives an average of $23,000 a month from his investments.

At the heart of their dispute was about $6 million worth of assets, including an Australian property worth $800,000 and several bank accounts.

The husband said he had these assets before marriage and they should not be included in the pool of assets to be divided between the couple after the divorce.

In their prenuptial agreement, they had agreed to “protect their separate property from claims from each other if they separate”.

The wife contended these assets should be considered part of their matrimonial assets.

She argued that they had abandoned the prenuptial agreement, given “significant developments” after marriage.

For example, the husband quit his bank job shortly after they wed and he did freelance work without a stable income for most of their marriage.

Hence, they never kept their finances separate and pooled whatever they had to raise their family.

The husband’s correspondence with his wife showed that he had considered some of the disputed assets to be part of the family’s wealth, instead of his own private wealth, the judge said.

Hence, Judge Ong did not think it was fair to honour the prenuptial agreement in full, though it had some bearing on her judgment.

She said in her grounds of decision: “It is clear that prenuptial agreements are subject to the court’s scrutiny.

“The issue that usually arises in such contexts is in respect of the weight that ought to be accorded to the prenuptial agreement.”

In the end, she ruled that some of the disputed assets, such as the sums in the husband’s Central Provident Fund account before marriage and the Australian property the man’s father gave him before marriage, are to be excluded from the matrimonial pool.

But she ordered other disputed assets, such as their joint accounts, to be included in the matrimonial pool for division between them.

Lawyer Ivan Cheong from Withers KhattarWong, who did not act for the parties in the case, said of the significance of the ruling: “Presiding Judge Ong’s decision highlights the importance of parties behaving consistently with what was agreed in the prenuptial agreement, if the intention is for the assets to be split in accordance with the agreement and for the court to give significant, if not full weight, to it.”

He said such agreements are becoming more common. His clients include former divorcees who want to avoid going through another ugly divorce and the ultra-rich, such as an entrepreneur whose wealth came up to $800 million.

Lawyer Lim Chong Boon from PKWA Law Practice said his firm currently gets about a dozen inquiries a month about these agreements, up from a handful a month about a decade ago.

He said one reason could be that millennials no longer see such agreements as taboo, unlike the older generation, who feel planning for them is akin to setting a marriage up for failure.

He added that his clients include professionals who are not considered high-net-worth individuals. “They just feel it is fair that what they owned before marriage does not go to their spouse if they divorce.”

Lawyer Koh Tien Hua from Harry Elias Partnership said that sometimes, it is the parents who insist their child sign such an agreement. “Sometimes, it is because one party is obviously wealthier than the other, and that party wishes to protect his or her premarital assets.”

Both Mr Lim and Mr Koh are also not involved in the case.

Mr Cheong said a prenuptial agreement is like a contract and cannot be enforced on its own.

He added: “In a situation where there is a properly drafted prenuptial agreement in which both parties are represented, and they subsequently act in accordance with their agreement on the finances and assets during the marriage, the court would be more inclined to give significant, if not conclusive, weight in the event of a divorce, after considering all factors.”

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The full article can be found here.

Source: Straits Times
Article Date: 02 Sep 2021
Author: Theresa Tan

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