Resolution Precedents For Separation And Pre-Marital Agreements

As is the case in most societies, family law is constantly evolving. Agreements made by couples before or after marriage are becoming increasingly popular. In particular, pre-marital agreements – commonly known as marriage contracts or simply prenups. In essence, the prenup contracts that individuals take to determine the rights and obligations of each spouse whether their marriage ends in separation or divorce. Property acquired through family property can be protected as non-marital property with an inheritance plan and/or marriage contracts. Often, prenups are put in place to regularize financial agreements related to family finances, separate certain family assets and protect estates that would be (or have been) obtained by the parties by explicitly excluding them from the marital patrimony. We have already discussed the issue of marriage contracts in our Family Focus Week article ”Marriage contracts as necessary tools to limit damage on rainy days”. Yet many are worried about addressing the issue of marriage contracts, in part because of the lack of unbiased information and the influence of false popular beliefs. With the exception of separation agreements, other post-marital agreements are less prevalent. There is no specific legislation for such agreements and Hong Kong courts generally do not recognize them as legally binding. However, it can be argued that there is nothing to prevent courts from considering such agreements when a couple needs the decision of the courts on the division of ownership and other ancillary deductions in their divorce proceedings, if they take into account the factors mentioned in section 7 of the MPPO, which imposes on the court the obligation to ”take into account the conduct of the parties and all the circumstances”. Marriage contracts are often associated with the rich and famous and can often be sensationalized by popular news.

This has led to the widespread belief that marriage contracts are unfair, worthless and unromroming, when they can indeed be a reasonable, fair and transparent way to discuss the financial aspects of a marriage and agree on the outcome if it ever falls apart. People who are already married or in a life partnership can enter into a written agreement explaining what they plan to do with their money, property and other practical matters as a result of their current or planned separation. This written agreement is referred to as a separation agreement. Separation agreements are usually made by parties who separate but do not wish to divorce at this stage or break their life partnership, perhaps for religious or practical reasons. The legal rules governing these agreements stem from the usual laws applicable to divorce, as well as from a 2010 Supreme Court decision (Radmacher v Granatino) in which the court stated: ”The court should implement a marriage agreement freely entered into by each party with a full appreciation of its effects, unless: in the prevailing circumstances, it would not be fair to keep the parties to their agreement.” We need more judicial assurance that our confidence in the organisation of marriage contracts in Radmacher – and in light of the detailed recommendations of the 2014 Legal Committee – has no place. marriage contracts are particularly advantageous when (a) children are made up of a previous marriage; (b) one party is much more prosperous than the other; (c) the patrimony of a party includes an essential transaction, an interest or a trust; or (d) a party is heavily indebted or abandons a successful career for marriage….

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