What is a Prenuptial Agreement?
A prenuptial agreement (also called ‘prenup’) is an agreement entered into by a couple before marriage. Though prenuptial agreements vary widely, most of the prenuptial agreements make arrangements that establish rights to property and support, and the division of financial assets and responsibilities in case of divorce or death of either spouse. It can also delineate the responsibilities and property rights during the marriage.
A prenuptial agreement is helpful in a number of ways. It determines the division of wealth after the dissolution of marriage, the terms of child custody and other family members in case of an intestate death, maintenance of non-working spouse and children in case of divorce and resolves family issues without going to court.
What is the need of a Prenuptial Agreement?
Contrary to popular belief, a prenuptial agreement does not necessarily reflect a lack of trust between the partners. What it certainly does is provide an amicable way to resolve the disputes that might arise during marriage or in case of divorce.
A prenuptial agreement aids in:
- Passing property to children from a prior marriage.
- Avoiding unnecessary disputes and trauma in divorce.
- Clarifying financial rights of each spouse.
- Getting protection from the debts of the spouse.
- Getting protection from false domestic violence and dowry harassment accusations.
Rights and Responsibilities in Prenup
Although the rights and responsibility of spouses vary in each prenup, some clauses can be commonly seen.
- Separate property: All the property acquired and owned in the duration of the marriage is considered marital property which will be divided in case of dissolution of marriage. By a separate property clause, spouses can enumerate certain property or classes of property which will be considered separate and considered sole ownership even after divorce.
- Shared property: The shared property is co-owned by the spouses, therefore, it is divided on the dissolution of marriage.
- Earnings in the duration of marriage: This clause in a prenup may declare earnings of each spouse as separate property to avoid disputes during the divorce.
- Maintenance, alimony and support: It clarifies what alimony/maintenance is to be given to a spouse who is not earning and the situation if he/she starts earning in the future. This clause helps to avoid unnecessary litigation for alimony/maintenance and relieves the court from the burden of determining it during a divorce.
- Wills/Transfer of property: Either spouse to the agreement can include a clause that any will or codicil thereto, or any transfer of property made by them will remain enforceable notwithstanding their obligations under this agreement. However, this clause should be given effect to cautiously, as the spouses can use it to find a way out of their obligations towards each other. Spouses may include clauses that determine the disposition of their property, upon their death, under this agreement, thereby creating a will therein.
- Custody of children: This clause determines the custody of children born in the wedlock. This avoids undesirable litigation and disputes. This clause will only be enforced if the circumstances under which the agreement was made have not changed.
- Maintenance of parents and prior children: In case of a second marriage, or if a spouse has living parents, a part of the property, marital or separate, will be used for their maintenance.
- Applicable law: This clause specifies the law that would be applicable. If this clause is absent, the rule of lex loci contractus or lex loci celebrationis may be applied by the court, at the time of enforcement.
The validity of Prenups in India
The concept of the prenuptial agreement is relatively foreign to India. Most of the religions in India do not consider marriage a contract rather a sacred bond ordained by God. Marriage is a strong social institution and divorce is still stigmatised. Therefore, it is perceived as highly undesirable, by society and the couple itself, to prepare for the eventuality of divorce before marriage.
Furthermore, not only is this concept abhorrent to the society, the Indian legal system also lacks laws and enforcement for prenuptial agreements.
One view is that like any other agreement a prenuptial agreement should be governed by contract laws rather than matrimonial laws. Therefore, it should be governed by the Indian Contract Act, 1872.
Alternately, it is also contended that Indian society considers divorce a very unwanted event. Therefore, prenups are against public policy, hence void under section 23 of the Indian Contract Act, 1872.
Some argue that prenuptial agreements are not binding since they are merely Memorandum of Understanding between spouses.
Another view is that a prenup can be granted legally binding status under the Special Marriage Act, 1954 if it is submitted with necessary documents and duly registered with the Registrar.
Although prenuptial agreements are not binding in India, they can be used for reference and evidence. For example, in Sunita Devendra Deshprabhu v. Sita Devendra Deshprabhu, the Bombay High Court considered the terms of the prenup to decide on the separation of assets.
Moreover, Portuguese law is still followed in Goa that allows prenuptial agreements.
Prenuptial agreements may be a relatively unexplored concept in India, and the only takers for it, as of yet, may be found among the upper class of metropolitan cities. It still remains unknown to the majority of the people. While prenuptial agreements indeed offer a very convenient way to settle disputes in case of divorce and protect the interests of both the parties, the persisting stigma attached to divorce in our society exponentially decreases the chances of it’s acceptability in our culture.
Moreover, the existing laws offer little to no support as the undeveloped law makes prenuptial agreements difficult to enforce. If the Indian Parliament makes effective laws to govern prenuptial agreements, a lot of marital and divorce disputes can be resolved in an efficient way while protecting both parties and reducing the burden of courts.
- A second-year BALLB student at National Law Institute University, Bhopal. Apart from being profoundly keen on legal research, she is also interested in biological sciences.