International Prenuptial Agreements

Prenuptial agreements
around the world
 
"Set for Life" article 

Set For Life" Article

PERSONAL JOURNAL
Your Money / Your Life -- Set For Life: The Price of Love
With Kevin Voigt

9 July 2004
The Asian Wall Street Journal

(c) 2004 Dow Jones & Company, Inc.

MONEY AND LOVE are a volatile mix, and with divorce rates around Asia skyrocketing, more couples are discussing the potentially thorny issue of saying "I do" to a prenuptial agreement. But the very mention can take the passion out of a relationship.
 
Ten years ago, a colleague of mine was aghast when her Singaporean boyfriend of more than two years -- a man who'd been married once before, and paid one-third of his income to his ex-wife -- suggested they get a prenup before they walked down the aisle. "I wasn't indignant right off until I had a bit of a think about it . . . and then it really cheesed me off," she says. Although they stayed together for a few years longer, "it was probably one of the factors that led to our breakup," she says.

There's nothing romantic about a prenuptial agreement. It's a contract, often haggled over by attorneys representing each side, spelling out what will happen financially if the marriage ends. Prenups primarily protect assets, making sure both parties take out of the marriage what they came in with, and equitably divvying up assets acquired during the marriage.

But, as my colleague's situation showed, the mere mention of a prenup can suck the fun out of love. "It forces people to get into a state of confrontation rather than a state of marital bliss," says Jeremy Morley, a New York attorney specializing in international divorce law, who has counseled clients in Japan, South Korea, China and the Philippines. "What's worse for romance than sitting in a room with two divorce lawyers?"

In the case of my colleague, the prenup discussion was a moot point. After talking with attorneys she learned that former British colonies such as Singapore and Hong Kong don't recognize them -- but that doesn't mean they're without merit. In Hong Kong, prenup agreements are given more legal weight if both parties were represented by counsel when they were signed, and if the documents were signed long before the actual wedding date. "They aren't legally binding, but they're of enormous evidential value to the court (in case of divorce)," says Sharon Ser, a Hong Kong attorney specializing in family law.
 
Prenups are legally recognized in Japan and South Korea, the divorce capital of Asia (second in the world to the U.S.), yet not very popular. Seoul attorney Chung Mihwa, who specializes in family law, says he has heard of only one couple who filed a prenuptial agreement in the past three years. But in mainland China, prenups are fast on the rise. A 2002 survey by China Mainland Marketing Research of women in Beijing, Shanghai and Guangzhou showed nearly 60% favored a prenuptial agreement.

In the event of a divorce, without the protection of a prenup there's a greater chance that the outcome may be determined by where the divorce proceedings are being held, rather than where the couple married.

Because of the wide variety of laws among countries regarding divorce, Mr. Morley, the New York divorce attorney, recommends that all couples marrying in a foreign country, marrying a foreign national, or marrying a globe-trotting executive would do well to consider a prenuptial agreement.
 
Just as divorce proceedings vary from country to country (and in countries such as the U.S., even state-to-state), the legitimacy of prenuptial agreements depends on the country and even on the judge hearing the case. "It's very hard to pin down, but a prenup can most definitely give the court evidence of the (pre-marriage) intentions of both parties," Mr. Morley says.

One of the strongest reasons for drawing up a prenup may be simply to dictate where the divorce proceedings will be held. For example, prenuptial agreements generally carry little weight on matters related to children -- such as custody and future support payments -- but where the divorce occurs could have a big impact on issues such as visitation rights, Mr. Morley says.

The difference in divorce laws among countries can lead to dirty tactics. Clients have been known to ask Mr. Morley to research countries where divorce laws will favor their situation -- then they move the family there before beginning the divorce. "The romance has faded, they're facing a likely divorce, and they realize a huge chunk of assets will go to a person they now hate," he says. "In this way, they can (find a country) that's more favorable in terms of the law or the inability of the courts to divide assets."

Once you decide you want a prenuptial agreement, how do you bring it up with your future spouse? This is tricky and differs from person to person, Mr. Morley says. "Sometimes people will say, `My parents are concerned about my future . . . ' Or, `I was reading something about prenuptial agreements -- what do you think about them?' " he says. "Usually, (people seeking prenups) are more mature people and have acquired more assets . . . people who find it easier to discuss these things. Once you go through a horrible divorce, you never want to go through it again."

If a prenup is happily embraced by both sides, draw up the arrangement well before the big day, says Ms. Ser, the Hong Kong attorney. "I get quite a number of calls a fortnight before a wedding, but courts are very suspicious of those entered into very close to the wedding date," she says. "The invitations are sent out, the wedding dress bought -- how can the girl say no?"

Ms. Ser says prenup agreements -- and all matters related to the financial situation of the couple -- should be openly discussed before walking down the aisle. "Anyone who is frightened to talk money when you're embarking on the greatest adventure there is, then maybe there's something wrong there to begin with."