Question: I am getting married. However, I am worried about the outcome if my marriage does not work out. I have heard of couples signing prenuptial agreements. Should I make a prenuptial agreement? Are prenuptial agreements enforceable in Malaysia?
Answer:
Relax. You’re probably getting anxious about marriage, and that’s normal. Talking about prenuptial agreement, that’s pretty normal, too.
It’s just not normal in Malaysia. For that matter, it’s not normal to discuss prenuptial agreements in most Asian countries.
However, things are changing. More and more people getting educated in the USA, where it is normal to do a prenuptial agreement. After graduation, they bring back ideas that they picked up from the USA, including the prenuptial agreement.
What is a Prenuptial Agreement
The prenuptial agreement, in a nutshell, is an agreement between a man and a woman to agree on the terms that will apply if they get a divorce. They usually sign it before entering into the marriage.
In some cases, wealthy families worry about what will happen if their sons and daughters go through a divorce. Wealthy families have amassed their wealth through great effort, and want to hold on to their wealth in case a son or daughter goes through a divorce. They want to be sure that the wealth will remain with the family, and so they will request the son or daughter to sign a prenuptial agreement before marriage.
For Chinese families, there is a real tendency of parents to cut off disobedient children from their inheritance. This is the case in Malaysia and Singapore, as well as China, Hong Kong and Taiwan. This makes it a real issue which must be considered by the couple. Naturally, the wishes of the patriarch or matriarch are usually respected in Chinese families, out of a sense of loyalty, and sometimes out of fear of getting cut off.
Divorce can be incredibly messy for the wealthy. It can be damaging financially, as well. In April 2017, the UK court ordered Malaysian billionaire, Khoo Kay Peng, to pay RM335 million to his wife. In 2011, a Hong Kong court ordered a Hong Kong tycoon, Samathur Li Kin-Kan, to pay HKD$1.22 billion to his wife.
So if you’re reading this article, you could be a person who is planning to get married soon, or a person whose child is planning to get married soon.
And now you’re wondering, what is the legal status of the prenuptial agreement in Malaysia. Fear not, the family lawyers at our firm have got you covered.
The law related to prenuptial agreement in Malaysia
Practically speaking the Malaysian courts have not had much opportunities to consider prenuptial contracts. Prenuptial contracts are typically designed to protect the wealth of one party in the event of a divorce. Malaysian courts are possessed with powers to order for division of property, maintenance, etc. according to the discretion of the judge. The following provisions are relevant.
In granting a decree of divorce or judicial separation, the Courts have powers under section 76(1) of the Law Reform (Marriage and Divorce) Act 1976 to order the division between the parties of any assets acquired during the marriage by their joint efforts, or to order the sale of such assets and the division of the proceeds of the sale to both parties.
In granting a decree of divorce or judicial separation, the Courts have powers under section 76(3) of the Law Reform (Marriage and Divorce) Act 1976 to order the division between the parties of any assets acquired during the marriage by the sole efforts of one party, or to order the sale of such assets and the division of the proceeds of the sale to both parties.
Section 56 of the Law Reform (Marriage and Divorce) Act 1976 allows for provisions to be made under rules of court, enabling parties of a divorce, to apply before or after the divorce is presented, to refer to the court any agreement or arrangement made or proposed to be made between them. James Foong J in Lim Thian Kiat v Teresa Haesook Lim [1998] 2 MLJ 102 held that O. 33 r. 2 of the Rules of High Court is included in the meaning of “rules of court” of section 56 LRA. Hence in a matrimonial dispute, agreements or arrangements may be referred to the court for consideration.