A prenuptial agreement is essentially a contract entered into between spouses before their marriage. This contract is intended to govern what happens if a couple eventually decides to divorce one another. As such, a common perception of prenuptial agreements is that they are a form of “insurance” against divorce, i.e. in the event of a divorce, the spouses will have some level of certainty with regard to their rights over their assets, property, maintenance, and children matters.
What are the benefits of a prenuptial agreement?
Although a prenuptial agreement is not automatically enforceable in Singapore, entering into such an agreement still offers many benefits. These benefits include the following:
- Providing certainty to parties by clearly setting out the financial arrangements and understandings during the marriage or in the event of a divorce;
- Being able to tailor the prenuptial agreement to your specific situation. For example, you could agree for family heirlooms and businesses to be kept out of the pool of matrimonial assets;
- Protecting the assets owned prior to marriage; and
- Protecting parties from each other’s debts.
What can and should go into a prenuptial agreement?
Almost all matters concerning the state of affairs between the spouses married to each other can be addressed in a prenuptial agreement. Common topics are the ownership of assets, issues of maintenance, and the children’s care to the marriage. The prenuptial agreement can also cover an arrangement during the marriage and in the event of separation or divorce of the spouses.
More specific terms in a prenuptial agreement could include the following:
- Ownership of property during the marriage;
- The governing law for the prenuptial agreement;
- Division of parties’ assets during separation, divorce or death of one spouse;
- Maintenance of the wife in the event of a divorce; and
- How the liabilities and debts owed by one or both spouses are to be dealt with.
What is the difference between a prenuptial and a postnuptial agreement?
A postnuptial agreement is a contract entered into between spouses after their marriage. Even though the contents of a postnuptial agreement may not substantially differ from that of a prenuptial agreement, the Singapore Courts tend to give greater weight to postnuptial agreements when exercising their discretion in the division of matrimonial assets. This is evident from Section 112(2)(e) of the Women’s Charter, which specifically states that the Court should have regard to postnuptial agreements with respect to the ownership and division of the matrimonial assets.
The Court’s reason is that the circumstances in which a postnuptial agreement is made are normally vastly different from those in existence for prenuptial agreements, being that parties would have taken into account that a divorce may be impending. Therefore, the Court is more likely to emphasise postnuptial agreements compared to prenuptial agreements.
Is a prenuptial agreement valid and enforceable in Singapore?
While the law in many countries around the world recognise prenuptial agreements to be valid and legally binding, the law in Singapore is not so straightforward.
In Singapore, a prenuptial agreement is not automatically valid and legally binding. The terms and conditions set out in a prenuptial agreement cannot be legally enforced in and of itself and will always be subject to the Court’s scrutiny.
Firstly, a prenuptial agreement should generally comply with the basic requirements of contract law. This also means that a prenuptial agreement can be set aside for failure to disclose all assets or evidence of fraud, duress, unfairness, or lack of representation at the time of signing the agreement.
Second, whether the Court will enforce the prenuptial agreement will depend on their assessment of the weight to be given to it in order to come to a just and equitable decision. The case that established the law on prenuptial agreements in Singapore is TQ v TR [2009] 2 SLR(R) 961. In that case, the Court of Appeal discussed the legal enforceability of prenuptial agreements in respect of the various ancillary matters as follows:
Division of matrimonial assets
The governing provision is Section 112 of the Women’s Charter. In essence, the ultimate power lies with the Court to order the division of matrimonial assets “in such proportions as the court thinks just and equitable”.
The weight that a prenuptial agreement will be given will depend on the matter’s precise facts and circumstances. However, if the agreement is valid by contract principles, the Court will usually consider it when exercising its power.
Where there are foreign individuals involved, the Court may be more willing to accept the prenuptial agreement’s legality as long as it is governed and valid according to foreign law (assuming that the foreign law is not contrary to Singapore’s public policy).
Maintenance
While the Women’s Charter is silent in this aspect, the Court of Appeal in TQ v TR [2009] held that all prenuptial agreements relating to the maintenance of the wife and/or the children would be subject to the overall scrutiny of the courts.
For prenuptial agreements that address the maintenance of the children, the Court would be especially vigilant and slow to enforce agreements that are not in the children’s best interests. Again, this is in line with the Court’s emphasis that the paramount consideration is the welfare of the children.
Custody, care and control of children
In light of the fact that the Court’s paramount consideration is the welfare of the children, the starting presumption is that such an agreement is unenforceable unless it can be clearly shown by the party relying upon it that the agreement is in the best interests of the children.
