Prenuptial Agreements in Singapore

Prenuptial Agreements in Singapore

Introduction

Every marriage has uncertainties and difficulties which are faced by the spouses. There is no certainty as one cannot predict the future after two people have entered into a marriage. This problem of uncertainties can be curtailed with parties to a marriage agreeing on certain solutions in circumstances that might arise in the future. This is where prenuptial agreements come into play.

Explanation of a Prenuptial Agreement

Prenuptial Agreement, also called Premarital Agreement or Antenuptial Agreement, is essentially a written agreement entered into by the spouses before their marriage, to agree on certain conditions and issues arising out of problems between them during and after the end of the marriage. Thus, it is a contract between the parties that deals with different issues like finances, arrangements, insurance coverage, etc., during and after the end of the marriage. Prenuptial Agreements are signed before a couple enters into a marriage. The agreement specifically covers solutions in case the parties end their marriage by divorce. The elements of uncertainties are curtailed and a foundation of honesty and mutual respect is established.

Issues that can be Included in a Prenuptial Agreement

Essentially all issues and matters relating to the relationship between the spouses can be included in a prenuptial agreement. Parties are free to agree on the matters and specific details of such issues that should be included in the prenuptial agreement. Matters concerning the state of affairs between the spouses during the marriage as well as after ending the marriage can be dealt with in such agreements. Some common issues that can be included in prenuptial agreements are:

1) Arrangement concerning ownership of the property during a marriage.
2) In the case of separation, divorce, or death of one party, the division of their properties.
3) Issues relating to dealing with liabilities and debts owed by one or both parties.
4) In the case of divorce, maintenance provided to the wife as well as the child(ren), if any.
5) Deciding the law which will govern the prenuptial agreement.
6) Issues concerning the custody and arrangements of the child(ren).
7) Insurance coverage of the spouses including life, medical, and disability insurance.
8) Inclusion or non-inclusion of inheritances and gifts in the pool of matrimonial assets.

Advantages of a Prenuptial Agreement

A) Curtailing Uncertainties: By agreeing on financial arrangements during the marriage and if the marriage ends up failing.
B) Protection of Premarital Assets: Parties can agree to preserve assets that were owned before the marriage.
C) Protection of Family Heirlooms: By agreeing on not including family heirlooms in the matrimonial assets, such heirlooms can be preserved for whoever those were intended for.
D) Protection of Family Business: By agreeing on issues concerning a family business, spouses can avoid complications later on.
E) Protection from Debts: Protection from debts owed by the other party is another benefit of a prenuptial agreement.
F) Guidance during Court Proceedings: A prenuptial agreement can help in guiding a court proceeding through references.

Validity and Enforceability of Prenuptial Agreements

The validity and enforceability of a prenuptial agreement in Singapore is a complex matter. Prenuptial agreements in Singapore are not automatically valid and legally binding. The Courts, however, do refer to these agreements while proceedings related to family matters. The final decision of the Court completely depends on its own findings and not the prenuptial agreement. The issues covered under a prenuptial agreement are generally governed by the Women’s Charter.

During Ancillary Proceedings, the Court has the power to make the final decision being just and equitable depending on the circumstances and facts of the case and is not bound by the prenuptial agreement. This is mentioned under section 112 of the Women’s Charter. Any term of the prenuptial agreement which is inconsistent or goes against any law or provision mentioned in the Women’s Charter is not valid in a Court. The Court also follows the instructions mentioned under section 114 of the Women’s Charter in proceedings concerning maintenance awarded to spouses and/or children. A prenuptial agreement will be scrutinized by the Court before a final decision is awarded. In short, a prenuptial agreement will be taken into consideration by the Court but it is not binding on the Court.

Factors that the Courts can Look Into

Some factors that the Court can consider while referring to the prenuptial agreement are:

a) Whether both the parties intended to enter into the prenuptial agreement.
b) Whether legal advice was necessary before signing the agreement and if so, was such legal advice taken.
c) Whether there was extreme pressure applied by one spouse on another that resulted in the other spouse accepting the agreement.
d) Whether the agreement was signed after the parties were separately advised on the terms.
e) Whether poverty or ignorance played a role in the acceptance of the agreement by one party.
f) Whether the child’s welfare is not being affected by the agreement and in case of child custody, the best interests of the child are being considered.
g) Whether adequate maintenance is being awarded to wife and/or children under the prenuptial agreement and according to the provisions under Women’s Charter.
h) Whether the prenuptial agreement is complying with the basic requirements of contract law.

Is Prenuptial Agreement a Contract?

Although not automatically valid and legally binding, prenuptial agreements are contractual in nature. This means that they must satisfy the basic requirements under the law of contract.

1) The agreement must be supported by consideration.
2) It must not be obtained by means of misrepresentation, fraud, duress, unconscionability, or undue influence.
3) It must include honest and full disclosure of assets.

Difference between Prenuptial and Postnuptial Agreements

Postnuptial agreements are agreements that are entered into by the spouses after they are married. Even if the contents of the postnuptial agreement do not vary substantially from the contents of the prenuptial agreement, more weight is generally given to the postnuptial agreement. Section 112 (2)(e) of the Women’s Charter provides for the provision which mentions that the Court should give regard to postnuptial agreements concerning division and ownership of matrimonial assets. More weight is given to postnuptial agreements generally because of the circumstances in which the two agreements are entered into. While a prenuptial agreement is entered into by the parties before marriage when the circumstances were vastly different, a postnuptial agreement is entered into by the parties during a marriage taking into consideration that a divorce may be impending. Thus, the parties have a better understanding of the issues and circumstances arising out of the marriage when they are already married than before marriage. For this reason, the Courts give more emphasis to postnuptial agreements compared to prenuptial agreements.

Cases Concerning Prenuptial Agreements

1) TQ v TR and another appeal [2009] SGCA 6

The background of this case included a marriage between a Dutch husband and a Swedish wife in the Netherlands. The parties entered into a prenuptial agreement in the Netherlands prepared by a Dutch Civil Law Notary. After 6 years, the married couple moved to Singapore with their children. The agreement stated that there would be no community of matrimonial assets between the couple and that the marital property regime in the agreement would be governed by the Netherlands law. The Court in one of its findings stated that the children’s circumstances must also be taken into consideration and not just the parents while deciding on custody, care, and control of such children. The Court noted that the validity of a prenuptial agreement should be governed by its proper law, as with the case in any other contract. The descending priority in which proper law should be determined were:

a) Express choice of the parties
b) Implied choice of the parties
c) Presumably, the law of matrimonial domicile or the law in which the agreement has the closest and most real connection when there is no express or implied choice of law.

When maintenance to wife and children are provided for in the prenuptial agreement, it is up to the Court to determine whether the terms produce a fair and just result and that the wife and/or children are getting adequate maintenance. Agreement concerning custody, care, and control of children will be presumed to be unenforceable unless it has been demonstrated that the agreement is in the best interest of the child. The Court of Appeal held that it would normally enforce foreign agreements valid under foreign law in question, subject to public policy considerations.

2) AUA v ATZ [2016] SGCA 41

The High Court passed a decision that was different from what had been agreed in the agreement concerning the division of matrimonial assets, maintenance of wife and child along with the custody, care, and control of the child. The Husband appealed against the High Court’s decision. The Court of Appeal concluded that due weight should be given to arrangements concerning the division of matrimonial assets in contemplation of divorce. The Court noted that it will consider if one party has misled the other by misrepresentation of the nature and/or value of their assets. If the child would be left with inadequate support, the Court will not sanction any agreement entered into for the maintenance of the child. The Court also noted that all agreements are unenforceable if they are entered into for the custody, care, and control of the child unless the Court is satisfied that such agreements are in the best interests of the child.

3) AQN v AQO [2015] SGHC 19

The facts of this case included a Singaporean husband and an American wife who got married to each other in New York. Before marriage, they entered into a prenuptial agreement stating that neither would receive any maintenance or share from each other’s property in case of divorce and that the agreement would be governed by New York law. However, after marriage, they left New York and never returned. In 2010, the wife filed a divorce petition and sought ancillary relief in Singapore. The husband filed a petition in New York asking the wife to be restrained from allegedly breaching the term of the prenuptial agreement. The Singapore District Court granted an interim judgment for divorce and also granted the wife an interim anti-suit injunction restraining the husband from pursuing the New York action. The husband appealed against this decision. The High Court, in this case, noted that prenuptial agreements travel with parties and upon divorce, the court with jurisdiction over the divorce action will decide any issues concerning the prenuptial agreement. The husband’s appeal was dismissed.

4) CLB v CLC [2021] SGHCF 17

The background of this case was that the husband and wife entered into a prenuptial agreement 5 days before their marriage. The agreement excluded a long list of properties from the matrimonial assets as well as any properties which were acquired from the sale of the listed properties in the agreement. The agreement also excluded gifts and inheritance received later on by each party and all property acquired in exchange for such gifts and inheritances. It also excluded all income and gain derived from the separate property of each other from the pool of matrimonial assets. The wife wanted some assets to be included in the pool of matrimonial assets while the husband stressed that the list of premarital assets and gifts be excluded. The Court held that, although it might have regard to the prenuptial agreement, it still holds the ultimate power to divide matrimonial assets in a fair and just manner. The Court will decide what weight to give to the prenuptial agreement after scrutinizing the agreement and that the parties’ conduct during the marriage may be a determining factor. After carefully evaluating each asset of the parties, the Court included some of those in the pool of matrimonial assets to be divided among the parties.