Till prenup do us part


  • Nation
  • Sunday, 11 Mar 2012

Changing life trends indicate that prenuptial agreements may not only be for Hollywood couples and Donald Trump.

BUSINESSWOMAN Clara* did not think she would find love again after being divorced for 10 years. Then she met entrepreneur John*, and after a whirlwind courtship, the couple, both in their 40s, decided to tie the knot.

“But before I let another man into my life, I insisted that we sign a prenup. Not because I had a bad experience in my first marriage or that I do not trust John. I'm thinking of my children's welfare,” says Clara who has two children from her first marriage.

“If my second marriage fails too, at least I can protect them from any financial squabbling. If my income is affected, it would disrupt their lives,” she adds.

A prenup (prenuptial or premarital agreement) is basically a contract two people intending to marry sign to specify terms of agreement in the event of the breakup of the marriage. These terms are mainly related to how assets will be divided upon divorce but can also include other issues such as alimony obligations and the family dog.

Although prenups have been popular in the West for decades, they have been slow to catch on in Malaysia, until recently.

However, the awareness on the importance of prenups is still low among Malaysians, says family law practitioner Andy Low Hann Yong.

Last year, his firm handled around 10 prenuptial agreements compared to 300 divorce cases, he shares.

“Culturally, Malaysians still feel that it is a sign of mistrust. Some even think it's bad luck for a marriage when in fact, it is only realistic,” Low says, pointing out that marriage is a also a contract.

It sounds cold, he admits, and no one wants to think about divorce when they are giddy with love but you need to prepare for the bad times.

Then there is the idea that prenup is bad, propagated by the popular media, he opines.

“In many movies and television dramas, they always show people (usually the girl) getting offended if they are asked to sign a prenup, or the hero will tear up the prenup as a sign of their love.”

No matter how unromantic a prenuptial agreement may be, it is a guarantee for the future, he stresses.

“It is one thing to be in complete love and trust with one another but when things turn sour, you will only remember the bad things, you will not remember all the promises you made in the good times,” he reiterates.

As Low puts it, divorce can get messy, with even the smallest thing becoming an issue.

“Taking finances off the table as a potential problem area can save you a lot of time and heartache,” he says.

This is especially important at a time when statistics tell us that divorce is rising one in eight unions in Malaysia fail.

In Malaysia the divorce rate is not as high as in the United States (approximately 13% in Malaysia compared to 51% in the US) but the number of divorces is increasing, so it is good to be aware of the need for prenups, Low notes, quoting Donald Trump.

“As Trump advised aspiring entrepreneurs and business people Don't ever get married without a pre-nuptial agreement.' He says, it is a part of financial planning.”

Not only for the rich

More importantly, one does not have to be a multibillionaire like the thrice-married Trump, or an aspiring one, to get a prenup, Low quips.

Even in marriages where the disposable income and assets are limited, divorces can get ugly.

In this current economic climate and urban lifestyle especially, where most married couples are burdened by loans and credit card bills, having a prenup can ensure that one partner is not saddled with his or her partner's debts when they split up.

Dave* wished that he had known this before he got married.

“When my wife and I divorced, we both had outstanding credit card balances, car loans and a house loan. I also had a business loan. It was a real mess to battle out who should pay for what.”

His divorce has left him slightly “bankrupt!” he tells wryly.

Prenups are also more important now that second or more marriages are becoming common. Like Clara, couples entering their “latest” marriage are advised to execute an agreement to protect the interests of their children from their previous marriage.

Another trend that makes it wise for prospective brides and grooms to iron out their post-divorce financial obligations before they take their marriage vows is late marriages.

Population trends show that that Malaysians are now marrying later, with the average age at first marriage for men standing at 28 years and women at 25.7 in 2010 (compared to 25.5 and 22.0 years respectively in 1970).

A survey by the National Population and Family Development Board (LPPKN) on population trends between 2000 and 2007 indicated that the average marrying age of Malaysians would increase to 33 years by 2015.

Hence, many would come into marriage already established and having amassed a few assets.

This was one of the things that Liza* had to think about when she finally met the man of her dreams at 37.

“I have life insurance, savings and EPF savings for my old age. I had to think about whether I could risk losing any of it if the relationship fails.”

For Chan*, it is her business partner and staff that she has to think about.

“I cannot let my personal issue jeopardise other people's lives. My business is also my source of income, so I have to be careful,” she says.

Even young professionals who have yet to make their mark need to think about prenups as a way to protect the future rewards of their personal success, Low advises.

Perhaps American celebrity lawyer Star Jones' basic criteria for a prenup is best: “if you have children from a previous marriage, own a business or are a partner in a business, law firm, or medical practice; possess significant assets or property; or have much more money than your prospective spouse, you need to have that talk.”

In fact in this social media age, her advice to the rich and famous is worth thinking about too for us mere mortals.

As she wrote in Uptown magazine, if you are a prominent person, be sure to include a confidentiality clause that prohibits disclosures about your relationship and marriage, in any and every forum covering everything from videos, photos to Internet postings.

True, you surely do not want to be an accidental YouTube “star” after your divorce.

Not binding

Engineer May, 33, still believes strongly that the prenup is a bad omen for love.

“It is too calculative. I feel that if you start a marriage on that basis with distrust in money matters your relationship will be doomed for failure.”

It is not cheap either, she says, something that can be a burden when you are already spending so much on your wedding ceremony.

It costs between RM3,000 and RM10,000 to get a prenup, but as Low sees it, the advantages might be priceless in the future.

“It's not because I'm a lawyer, but I have seen how some clients get depressed and live in fear of losing everything during their divorce proceedings, especially if the court case drags on. A prenup can help settle some financial disagreements, including alimony,” he notes.

Unfortunately, he laments, prenups are not legally binding in Malaysian courts, in line with the English Common Law which does not recognise prenups.

In countries like the US and even Thailand, however, it is becoming a prerequisite for prospective newlyweds.

Still, Low assures, the prenup is a valid legal document in Malaysia and the judge will always scrutinise it as proof of both parties' intentions, “You will definitely have a stronger case if you take a prenup.”

Low is optimistic that prenups will play a bigger role in Malaysia's Family Law in the future.

If they grow more common and courts have to deal with more prenups, precedents and judicial decisions will be laid down, he rationalises.

For many young couples, the prenup is becoming a criterion on their wedding to-do list.

As lawyer Sara*, who is busy planning for her wedding in November, puts it, it is worth checking out.

“I am exploring all my options. You can never be too careful. Looking at the number of divorces happening among my friends and even in my own family, I understand that it is necessary planning no matter how much you love and trust your partner,” she says, before adding ruefully, “I still believe in fairytale endings and happy ever after.”

*Not real name

Celebrity prenups KIM KARDASHIAN WHILE everyone was obsessed with how short her marriage was 72 days TV reality show star Kim Kardashian was preoccupied with whether she deserved to keep her large US$2mil (RM6.2mil) wedding diamond ring instead of buying it off her ex-husband Kris Humphries as they had agreed in their prenup. TIGER WOODS FORMER model Elin Nordegren and golf star Tiger Woods reportedly had an agreement that stipulated they must remain married for 10 years before Nordegren can collect a settlement of US$20mil (RM60.2mil) should they divorce. When Woods admitted to “transgressions” after six years of marriage, she had her prenup revised before filing for divorce. Although it was undisclosed, varying reports suggested that she walked away with US$110mil (RM330.9mil). JENNIFER LOPEZ HER marriage to then fellow struggling actor Ojani Noa ended in 1998 but last year, Jennifer Lopez's ex returned to haunt her with sex tapes made during their short marriage. Noa leaked a 15-minute footage on the Internet after he was denied the rights to sell and distribute them. The rest of the footage is locked in a safety deposit box at the City National Bank in Century City, California while the two fight in court over their ownership. Lopez is probably regretting not thinking ahead. DONALD TRUMP APPRENTICE star and business tycoon Donald Trump's first wife, Ivana, challenged the legality of their pre-marital document in 1991 and walked away with far more than she would have had had it held up in court. According to reports, his former wife was given US$20mil (RM60.2mil) cash, the US$14mil (RM42.11mil) family home and US$350,000 (RM1.1mil) a year in alimony. CATHERINE ZETA-JONES ACTRESS Catherine-Zeta Jones obviously does not believe in Hollywood happy endings. In her prenup with husband Michael Douglas, she included a paragraph about how much money she stands to receive if her husband Michael is caught cheating US$5mil (RM15.2mil). She already receives US$3mil (RM9.02mil) for every year they're married. MADONNA DESPITE their prenup, Madonna's husband Guy Ritchie still walked away from their eight-year partnership with a reported US$76mil (RM243mil). The Material Girl reportedly just wanted out of the marriage that she did not put up much of a fight. KATIE HOLMES Katie Holmes reportedly earns US$3mil (RM9.02mil) for every year she stays with Tom Cruise. If they're together for over 11 years, the agreement is abolished and she is entitled to half of the mega-rich Hollywood star's fortune, said to be roughly US$250mil (RM752mil).

KIM KARDASHIAN

WHILE everyone was obsessed with how short her marriage was 72 days TV reality show star Kim Kardashian was preoccupied with whether she deserved to keep her large US$2mil (RM6.2mil) wedding diamond ring instead of buying it off her ex-husband Kris Humphries as they had agreed in their prenup.

TIGER WOODS

FORMER model Elin Nordegren and golf star Tiger Woods reportedly had an agreement that stipulated they must remain married for 10 years before Nordegren can collect a settlement of US$20mil (RM60.2mil) should they divorce. When Woods admitted to “transgressions” after six years of marriage, she had her prenup revised before filing for divorce. Although it was undisclosed, varying reports suggested that she walked away with US$110mil (RM330.9mil).

JENNIFER LOPEZ

HER marriage to then fellow struggling actor Ojani Noa ended in 1998 but last year, Jennifer Lopez's ex returned to haunt her with sex tapes made during their short marriage. Noa leaked a 15-minute footage on the Internet after he was denied the rights to sell and distribute them. The rest of the footage is locked in a safety deposit box at the City National Bank in Century City, California while the two fight in court over their ownership. Lopez is probably regretting not thinking ahead.

DONALD TRUMP

APPRENTICE star and business tycoon Donald Trump's first wife, Ivana, challenged the legality of their pre-marital document in 1991 and walked away with far more than she would have had had it held up in court. According to reports, his former wife was given US$20mil (RM60.2mil) cash, the US$14mil (RM42.11mil) family home and US$350,000 (RM1.1mil) a year in alimony.

CATHERINE ZETA-JONES

ACTRESS Catherine-Zeta Jones obviously does not believe in Hollywood happy endings. In her prenup with husband Michael Douglas, she included a paragraph about how much money she stands to receive if her husband Michael is caught cheating US$5mil (RM15.2mil). She already receives US$3mil (RM9.02mil) for every year they're married.

MADONNA

DESPITE their prenup, Madonna's husband Guy Ritchie still walked away from their eight-year partnership with a reported US$76mil (RM243mil). The Material Girl reportedly just wanted out of the marriage that she did not put up much of a fight.

KATIE HOLMES

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