ANISHA KUMAR RAMANATHAN, SENIOR ASSOCIATE AT WITHERS, DISCUSSES THE BENEFITS OF A PRE-NUPTIAL AGREEMENT
More and more couples are discussing getting a Pre- Nuptial Agreement (PNA) in anticipation of marriage. Such agreements are already very common in the US and in Europe, and their popularity in Asia continues to grow.
Though not yet legally binding in Hong Kong per se, since a Court of Final Appeal ruling in 2014, the presumption is that Family Courts should uphold PNAs if they are fair and both parties fully understand the implications. A properly drafted PNA is crucial to protect the assets of the party bringing the most wealth into the marriage or to safeguard any potential inheritance or business interests.
For most, the challenging aspect of a PNA is broaching the subject with their partner in the first place. It is a sensitive and awkward topic which could lead to a negative reaction during a time meant to be filled with happiness and excitement.
Strong marriages are built on good communication so the best way to avoid awkwardness is to broach the subject as early as possible in a relationship, and to have a frank and open discussion about your future together.
DOS AND DON’TS TO CONSIDER
Be fair and honest. One of the fastest ways for a PNA to be invalidated is if one of the parties has not fully disclosed their assets. A schedule of assets should be attached to the PNA so the parties are ‘full and frank’ with each other about their financial position when entering into the marriage.
Do not allow emotions to prevail. If the drafting of the PNA is causing undue stress and arguments, take a short break from the process. This is why it is advisable to start the process early. It is better to wait until you are able to put your emotions aside and proceed with your best interests in mind.
Treat it as insurance. You would insure against burglary or upon entering a business contract, in the hope that nothing bad will happen. It should be the same for a marriage.
Encourage review. Both parties should know exactly what the PNA says and what the terms require. Often one party will have the document drafted by his or her lawyer first and then sent to the other for review. You should encourage your partner to obtain independent legal advice and review the document as it is important that they also have their interests protected.
Do not include anything that is illegal or would be considered unconscionable and do not include anything that may encourage or trigger divorce. A good lawyer will advise against this as it would defeat the purpose of having a PNA in the first place.
Do not leave it until the last minute. If the PNA is drafted too close to the wedding, the spouse may try to invalidate it. It is always wise to have the agreement signed and sealed at least 28 days before the big day. The document can then be filed away and in ideal circumstances, forgotten about. However, if the worst does happen, the PNA will be an excellent insurance.
Tags: advice, legal advice, marriage, prenup, prenuptial
For more information on PNAs and protecting yourself in the unfortunate event of a divorce, reach out to Anisha Kumar Ramanathan, Senior Associate at Withers, at [email protected]. Withers, 30/F United Centre, 95 Queensway, Admiralty, 3711 1600, www.withersworldwide.com.