THE prenuptial agreement (or more glamorously referred to as the prenup) has always been a tricky subject for couples. Yet in today's world where divorces are quite common and marriages can last a fortnight, doesn't a prenup make more sense than ever?
Though most of us will agree that it dampens the romance, for some it can be a fair way of disbursing assets and responsibilities - especially if one has more than the other.
So what is a prenuptial agreement?
A prenup is basically a type of contract created by two people before entering into marriage. It can outline each party's responsibilities and property rights for the duration of the marriage. More commonly, however, prenuptial agreements list terms and conditions associated with dividing up financial assets and responsibilities should the marriage dissolve (sniff!).
What happens to Hollywood celebs who did not draft a prenup?
Perhaps it all started with American business magnate Donald Trump's famous ex-wife Ivana, best known for her quote "Don't get mad, get everything".
In 1991, she left Donald because of his affair with Marla Maples. Despite a prenup, Ivana sought to get more than what was promised and the two battled it out in court. It was rumoured that Ivana received US$20mil (S$24 million) and an annual alimony of US$350,000.
Of course, the list of celebrity casualties don't end there.
Basketball star Michael Jordan paid an estimated US$168mil to his wife of nearly 18 years when they divorced in November 2007. Amy Irving, the first wife of famed director and producer Steven Spielberg was awarded an estimated US$100mil in 1989.
Who can forget the infamous divorce between model Heather Mills and legendary rock star, Paul McCartney? Much to public dismay, Mills was awarded £24.3mil in her divorce settlement with estranged husband McCartney.
Safe to say, a marriage ending without a prenup can be quite a tormenting experience (well, unless you're on the receiving end).
Let's review the benefits and drawbacks.
Pros
> A premarital agreement can safeguard the inheritance rights of children and grandchildren from a previous marriage.
> If you have your own business or professional practice, a premarital agreement can shield that interest so that the business is not subjected to the control or involvement of your former spouse upon divorce.
> If one spouse has significantly more debt than the other, a premarital agreement can protect the debt-free spouse from having to undertake the obligations of the other.
> If you plan to give up a lucrative career after the marriage, a premarital agreement can ensure that you will be remunerated for that sacrifice if the marriage does not last.
> A premarital agreement can protect the financial interests of older persons, persons who are entering into second or subsequent marriages, and persons with sizable wealth.
Cons
> If a business was involved as part of your prenuptial agreement, but you have contributed to increasing its profitability, you could lose claim to its increased value in a divorce settlement.
> It cannot define child support payments.
> It can generate a sense of lack of trust.
> In the "honeymoon" stage of a relationship, one spouse may agree to terms that are not in his best interests because he is "too in love" to be concerned about the financial aspects and can't imagine the union coming to an untimely end.
Here's some advice
Legal jargon aside, it has been proven that heartbreaks can be costly.
Most people who have worked hard to achieve their wealth want to hang on to it and thus a prenup is the answer.
For those of who are signing one, make sure you take it to your own lawyer for a second opinion. There's the famous case of New York socialite Tricia Walsh, who took to the Internet when her millionaire hubby kicked her out with a one-sided prenup. Sadly, she never got the payout she wanted, apart from becoming a YouTube sensation!
At the end of the day, a prenup is quite the catch-22. After all, if you truly believe your partner is the one, isn't asking for a prenup the precursor to failure?
Whatever you decide, there's only one tip we can truly give - and that's to get a good lawyer!