Top 10 things you may not know about Prenuptial and Postnuptial Agreements
1. If done properly, the agreement will be enforced in Hong Kong
The Hong Kong Court will give effect to an agreement so long as it is ‘fair’, neither party is left in a predicament of ‘real need’, and it was entered into with a full appreciation of its implications and with the benefit of independent legal advice.
2. A Hong Kong nuptial agreement is not the same as a marriage contract
In many European countries it is common to sign a marriage contract electing a matrimonial property regime shortly before the marriage which applies during the marriage, on divorce, and on death. The most common regimes are those of separate property and community property. If no election is made, a default regime will apply (usually one of community property).
Such documents are signed before a notary, without the benefit of financial disclosure or legal advice, and sometimes only a few hours before the wedding.
These contracts are not the same as nuptial agreements and are unlikely to be enforced in Hong Kong in the event of marital breakdown.
3. It’s never too late to have a nuptial agreement
Nobody wants to think about the possibility of things going wrong when planning a wedding, and unless family and friends have a prenuptial agreement, it is unlikely to be at the forefront of your mind.
If you didn’t have time, or simply did not think about having an agreement before the wedding, then you can still enter into a post-nuptial agreement, which is signed after the wedding. In fact, these agreements are often considered to be even more enforceable as it is harder to raise allegations of pressure.
If you have a foreign marriage contract or prenuptial agreement, it is essential to consider a Hong Kong post-nuptial agreement that meets the local requirements.
4. There is no ‘standard’ agreement
There are many different ways of drafting a prenuptial agreement; there is no ‘one size fits all’.
It should be tailor made to your specific circumstances. It may contain financial provision for your spouse, or it may not, depending on the assets in question. It can provide for a clean break, with a one-off lump sum payment, or it can leave open the possibility of spousal maintenance.
So long as the financial needs of both parties are met, you can say whatever you want in the agreement (within reason).
5. The agreement can be limited to dealing with only certain assets
A nuptial agreement doesn’t have to prescribe in detail exactly what the financial settlement may be on divorce. It can be limited to dealing with only certain assets.
For example, where there are important collections such as artworks, wine, watches etc., the agreement can be limited to simply ensuring that those assets are not shared.
An agreement can also cover ownership of intellectual property, for example, literary and artistic works, such as royalties.
The existence of heirlooms and wanting to ensure those are returned to the original family can be the main and only issue dealt with in an agreement.
6. Arrangements for children are always variable
Whatever may be agreed in a nuptial agreement in connection with children is always capable of being varied, with the Court always considering what is in the best interests of the child at the time of the divorce.
This includes the provisions regarding custody, care and control, and also child maintenance. These cannot be set in stone.
7. It can deal with the family pet
The Court in Hong Kong does not treat the family pet as a sentient being. It is treated as chattel which means on divorce the pet will usually remain with the legal owner.
Including provisions regarding pets in nuptial agreements can be sensible if you want to ensure you can continue to have access to your furry friend after a divorce.
8. If the matter still proceeds to Court, financial disclosure can be limited
In the event one party seeks to resile from a nuptial agreement, the Court can deal with the matter by way of preliminary issue, where the onus is placed on that party to ‘show cause as to why the agreement should not be binding’.
In these circumstances, time and costs can be saved when the Court makes early findings regarding the agreement. Importantly, the Court can also dispense, or reduce the need for extensive financial disclosure, which would otherwise have been required if no agreement had been entered into.
9. There is no point in having an infidelity clause
Infidelity clauses (which usually provide for the spouse who has been unfaithful to pay more to the other spouse or receive less from them) are contrary to public policy in Hong Kong.
They won’t be enforced and may render the agreement more vulnerable to being set aside.
10. Prenuptial agreements are a sign of a strong relationship
The prenup conversation is not always easy, and expectations are not always the same. Entering into a prenuptial agreement means a couple has to be able to discuss financial matters and reach compromises. This is important for the future of the relationship. Being able to tackle and discuss difficult issues early on is a sign of a strong relationship.