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When a couple we know breaks up, it seems we can’t resist asking why. When it’s a celebrity couple who go their separate ways, that wanting to know can reach unhealthy levels of intrusion and speculation.

Recently, people were weighing in on a high-profile couple who canceled their wedding plans, and pinned the blame on one party asking for a prenuptial agreement. Now, is that such a bad thing that it would lead to the couple saying goodbye to a future together?

Because we don’t like to think of bad things, we rarely plan for them. The reality though is by anticipating situations that can go wrong, we are able to control them, sometimes to the extent that they no longer happen. The same thing can be said for happy marriages with a prenuptial agreement.

What is a Prenup?

A prenuptial agreement, popularly called a prenup, is a legal contract entered by a couple headed down the wedding aisle. According to Atty. Maylanie Apawan, lead counsel of microfinance non-profit Kabalikat Para sa Maunlad na Buhay, it’s a written agreement that lays out how a couple will deal with money during their marriage and, if it happens, after an annulment (as we have no divorce in the Philippines), or when one of them passes away before the other.

Who needs a Prenup?

Contrary to popular opinion, prenups are not only for the rich. You don’t need to have millions in the bank and many assets for a prenup. Sometimes, a prenup is useful because of the absence of assets, and to manage debts between a couple.

Over the last two decades, there has been a reported steady increase in couples inquiring about prenups and entering into one across the globe. Atty. Apawan explained that in the Philippines, the absence of a prenup means the marital assets will be governed by applicable laws.

“You can consider the prenuptial agreement as a way of expanding the spouses’ options, in deciding the terms that will govern their properties. This way they will not be limited only to the conjugal property, or complete separation of property, or absolute community property regimes,” she said.

TOP 5 REASONS COUPLES SIGN A PRENUP

#1 One is richer than the other. 

If one has more assets than the other, it’s natural for the wealthier one to ask for a prenup. However, there are also cases where it is the less wealthy partner who asks for one, possibly to prove their affection has nothing to do with the other’s bank account.

#2 One has an inheritance to protect. 

If one of the couple is coming into an inheritance, or has received it, a prenup can set the rules about this particular asset. Maybe it’s a family home that has to stay on his or her side of the family. It could also be an heirloom that should only be passed on to children.

#3 One or both have been married before. 

More couples are entering into marriage a second, or even third or fourth time. If their earlier relationship/s ended with bitter battles over financial matters, they are likely avoiding that with a signed agreement to protect themselves, or even each other.

#4 One or both have children from previous relationships. 

Before exchanging I Dos, those who have children from previous marriage/s or relationship/s ask for a prenup to protect their children’s right to their assets. In case one predeceases the other, a prenup can help secure the financial interests of the children.

#5 One or both have debts. 

If you are bringing in not assets but debts into a marriage, a prenup is also a good way to clarify ownership of these borrowings. With a prenup, you can document that premarital debts will be paid by the person who incurred them. You can also specify how debts incurred during the marriage will be serviced, for example, that one spouse’s business debts cannot be paid from joint personal funds.

Where can you sign up?

If any of the top 5 reasons resonate with you, then a prenup may be a good option. In fact, if you are asking or thinking if you need one, it could be a strong sign that you do.

Atty. Apawan said the first place to start is to look at what you have, or for some, what they don’t have.

“For the couple, the challenge is always the need to disclose all assets. They will need to agree on “reasonable provisions” to be included in the contract. Admittedly, what is reasonable sometimes differs from one person to another,” she explained.

“However, once this issue is sorted, the process is quite straightforward. The agreement can be made without the need of court approval. There are law offices who work in this area of law practice. They draft the terms and ensure that all formalities are complied with,” added Atty. Apawan.

She wisely suggests that the couple contract their own lawyers.

“It’s best to have the agreement reviewed by a lawyer of your own choice, that way you get the necessary assistance in looking after your interest and assets.”

ABOUT THE AUTHOR

Aneth Ng-Lim returns to writing after more than two decades of working as a communications specialist in the government and the private sector. Her advocacy for financial inclusion and personal finance began when she served as head for Consumer Education during her stint at a multinational bank.

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