Many couples entering into marriage may have heard of prenuptial agreements, but most are surprised to learn that postnuptial agreements exist too.  A postnuptial agreement is an agreement that establishes how the couple’s assets will be divided in the event of a divorce and the amount of spousal support that one spouse will pay to the other if the marriage ends.

Postnuptial agreements are entered after marriage. In most circumstances, a prenuptial agreement was never considered and now that a couple has entered into marriage, they are considering how best to resolve any issues with regard to financial security, division of assets and support payments, in the event that the marriage dissolves.

In a postnuptial agreement, you are likely to have a better idea of your assets, projected income, or support expectations. Furthermore, you may have amassed more debt which is often the subject of divorces. A postnuptial agreement may therefore be able to cover all the financial bases. It is an opportunity for couples to analyse their assets, debts and impact of financial stress on their lives and to discuss any grievances they may have when it comes to one another’s obligations and responsibilities of each partner.

Here is an analysis of some issues commonly addressed in postnuptial agreements:

  1. Defining Property/Assets – What property is held jointly and/or individually? Identify property that will considered as marital property or separate property.
  2. Establishing Debt – Who is responsible for paying off debt? Is debt in joint names? How can debt be repaid and what are the priorities in repayment of debt.
  3. Establishing Maintenance – what kind of support you or your spouse will pay to the other spouse during or after a divorce, or establish that there will be no support in case of divorce
  4. Other Assets – How should your business be disposed of in the event of divorce, disability or death?
  5. Child Support – Address child support issues or child custody issues.
  6. Establishing Support for Children of a Prior Marriage – How are monies divided to a previous family? How much support should be given to children from previous marriages?
  7. Upon Death – What protection do you have in the event of one another’s death? Do you have life insurance for the other; updated wills; considered estate planning?

Even though the Courts’ powers to order the division between the parties of any assets acquired during the marriage is provided under Section 76 of the Law Reform (Marriage and Divorce) Act 1976, there is an express provision in Section 56 of the Act for the Court to consider “any agreement or arrangement made or proposed to be made between them, being an agreement or arrangement which relates to, arises out of, or is connected with the proceedings for divorce”, in order for the Court to assess its reasonableness.

In Lim Thian Kiat v Teresa Haesook Lim nee Teresa Haesook Dean & Anor [1997] 5 CLJ 358, a deed of separation (“Deed“) was entered into between a husband and his wife, which settled the wife’s claims to matrimonial properties and maintenance. By this Deed the parties agreed that its terms would be incorporated into a joint petition for divorce in the event that either spouse demands for a divorce.

It is possible for post nuptial agreements to carry significant and even conclusive weight. However, the Courts will be guided by the principles of justice and fairness and will retain the power to decide how matrimonial assets should be divided. Thus, the Courts may be persuaded to consider a postnuptial agreement  to assist in arriving at a fair determination of the intention of the parties to the marriage with regards to matrimonial assets.

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This article was written by Aileen Lau. Aileen heads the family law practice at Donovan & Ho. She has extensive experience in both contested and uncontested divorce proceedings, and has advised clients on family law matters ranging from child custody, payment of alimonies and division of matrimonial property. 

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