Perhaps you are marrying for the second or third time, or perhaps you have current or future wealth you want to protect. Then arranging a prenuptial agreement could be an essential part of the lead up to the big day.

Some couples may view prenups as a sign of mistrust between two people who are going to embark on life’s journey together as husband and wife. There are also those who feel that it would be bad luck. However, in the event of an unpleasant divorce or a hostile breakup of the marriage, prenups can deal with that.

What is a pre-nuptial agreement / prenup?

A pre-nuptial agreement is entered into prior to marriage. The pre-nuptial agreement will make provisions for the split of a couple’s assets and income in the event of divorce. It specifies the terms which predetermine how money and assets are to be divided in the event of a divorce or breakup of marriage.

The agreement often includes alimony payments and responsibilities towards any children. It also ensures that one partner is not burdened with his or her partner’s financial obligations. Otherwise, it would be a messy battle figuring out who should pay for what.

A prenup is tailored to individual circumstances and no one agreement is the same as another.

The agreement may also set out how assets are to be held and managed during the marriage, for example, whether a joint account will be opened and how property is to be held.

What are the benefits?

Where one partner has acquired extensive personal wealth and business assets or inherited from family before and after marriage, this may all well be planned out and protected in a prenup.

Prenups are also more important when it comes to second marriages and beyond, as they can be entered into to protect the interests of the children who are from a previous marriage.

It provides for certainty and a reduction in legal wrangling at the time of any divorce and is effectively a planning tool to ensure a more predictable resolution of the financial terms of a divorce.

Are pre-nuptial agreements enforceable in Malaysia?

There is a misconception that pre-nuptial agreements are not enforceable in Malaysia. On the contrary, the Courts may consider pre-nuptial agreements when determining distribution of matrimonial assets, so long as the agreement is not contrary to anything in the Law Reform (Marriage and Divorce) Act 1976. 

The validity of a pre-nuptial agreement is still subject to the Court’s discretion. In deciding whether to uphold a pre-nuptial agreement, the Court can examine various factors such as the bargaining position of the respective spouses and their conduct.

In Malaysia, the divorce rates are increasing and it is good to be aware of pre-nuptial agreements and how to iron out post-divorce obligations.

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About the author: Aileen Lau 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. Have a question? Feel free to contact us.

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