Malaysia - Do You Need A Pre-Nuptial Agreement?

Legal News & Analysis - Asia Pacific - Malaysia - Dispute Resolution

29 May, 2017

 

The awareness on the importance of a pre-nuptial or pre-marital agreement (colloquially referred to as a “prenup”) in Malaysia is relatively low, as it is felt as a sign of mistrust between two people who are going to embark on life’s journey together as husband and wife. There are also those who feel that it would be bad luck. However, in the event of an unpleasant divorce or a hostile breakup of the marriage, pre-nuptial agreements may help ease some disagreements.

 

What is a pre-nuptial agreement / prenup?

 

A pre-nuptial agreement is  a contract entered into prior to marriage. The pre-nuptial agreement will specify the terms which predetermine how money and assets are to be divided in the event of a divorce or breakup of marriage. The agreement often includes alimony payments and responsibilities towards any children. It also ensures that one partner is not burdened with his or her partner’s financial obligations. Otherwise, it would be a messy battle figuring out who should pay for what.

 

In instances where one partner has acquired extensive personal wealth and business assets or inherited from family before and after marriage, this may all well be planned out and protected in a pre-nuptial agreement.

 

Pre-nuptial agreements are also more important when it comes to second marriages and beyond, as they can be entered into to protect the interests of the children who are from a previous marriage.

 

Are pre-nuptial agreements enforceable in Malaysia?

 

There is a misconception that pre-nuptial agreements are not enforceable in Malaysia. On the contrary, the Courts may consider pre-nuptial agreements when determining distribution of matrimonial assets, so long as the agreement is not contrary to anything in the Law Reform (Marriage and Divorce) Act 1976.

 

The validity of a pre-nuptial agreement is still subject to the Court’s discretion. In deciding whether to uphold a pre-nuptial agreement, the Court can examine various factors such as the bargaining position of the respective spouses and their conduct.

 

In Malaysia, the divorce rates are increasing and it is good to be aware of pre-nuptial agreements and how to iron out post-divorce obligations.

For further information, please contact:

 

Donovan Cheah, Partner, Donovan & Ho

donovan@dnh.com.my