PRE NUPITAL CONTRACT - Second Marriages - Discussion Forum

In India, Prenuptial Agreements Are Not Governed by the Indian Marriage Laws, but by the Existing Contract Laws.

Lawyers estimate that almost ** per cent of marriages that take place in the metros, especially in Mumbai and Delhi, involve some form of prenuptial agreement. “Couples opting for prenuptial agreements are not just financially unequal couples or wealthy couples, but even those who simply want to avoid the financial entanglement and trauma that follows a divorce,” says Anand. “The problem, however, is that Indian courts have not totally recognised the validity of prenuptial agreements,” says Indranil Bose, partner (litigation,Fox Mandal Little, a Delhi-based law firm. The Indian law defines what marriage is and agreements such as these do not fall into that definition. So they are not deemed valid.

“In India, prenuptial agreements are not governed by the Indian marriage laws, but by the existing contract laws,” says Duggal.

“Under Section ** of the Indian Contracts Act, prenuptial agreements have as much sanctity as any other contract, oral or written; just because litigation has not begun in this area does not mean that it has to be treated any differently, and that it cannot be enforced.

Courts do take cognisance of a prenuptial agreement if both parties have mutually agreed, are competent to contract, and the prenuptial agreement clearly states the fair division of property, personal possessions and financial assets of the parties,” he argues. “A big advantage of a prenuptial is that it forces couples to have that all-important financial discussion before marriage,” says Anand.

She adds that issues that can be efficiently dealt with in a prenuptial range from divorce settlements, if the case arises, and the prevention of disputes regarding joint accounts to the custody issues of the children after the dissolution of a marriage. “Another important benefit of the prenuptial is that it offers protection from the spouse’s debts, if any.”

For couples about to take the plunge, it is perhaps wiser to go in for a prenuptial agreement that clearly outlines a fair division of property, personal possessions and financial assets, than fight over a favourite piece of furniture or pet in the process of dissolving the marriage. It works as a multi-pronged solution. In the case of the men, it protects them from exorbitant divorce settlements. In the case of individual earners, it makes sure that nothing, not even a joint account, can become a point of dispute in case of a divorce.

It is ironical that today, even though women and men get the same educational opportunities and same employment opportunities, and the constitution under article ** guarantees equality before the law, the laws on divorce and alimony are in favour of women. In other words, laws related to divorce and alimony are unconstitutional and have been designed and framed with ulterior motive of vote-bank politics than realistic facts and principles of equality.

Most of the entitlements under the divorce law in India are governed by the personal laws of the parties - the Hindu Marriage Act, ****, as amended by the Marriage Laws (Amendment) Act, ****; Muslim Personal Law, or Indian Christian Marriage Act, **** - as the case may be. The Special Marriage Act, ****, governs inter-religion marriages. Irrespective of the applicable law, a prenuptial can ensure an equitable division of assets.

“A provision for maintenance exists in all matrimonial laws with the difference that under Hindu Marriage Act, either party - wife or husband - can claim maintenance, while under others it is only the wife who can claim it,” says Smita Tyagi, a Delhi-based lawyer with law firm Joseph & Joseph. However, it may be noted that in practice, the husband is hardly paid maintenance by the courts. A perusal of the number of such petitions and settlements is a pointer to this unfair practice by the courts in India.

“Generally, under Indian law, the basis for awarding the amount of permanent alimony and maintenance depends on the income and property of both the parties; conduct of the applicant and the non-applicant and other circumstances, if any. If a woman is not earning, she is entitled to maintenance. However, the conduct or unchaste behaviour of the woman may debar her from any claim to maintenance. If the wife has sufficient income and property of her own, the court will not grant her any maintenance”, avers Tyagi.

“But, if the husband and wife are both earning, the maintenance paid to the wife usually varies between one-third and one-fifth of the joint income of the husband and wife, though there is no fixed arithmetic rule.”
“It may not be possible to prevent a divorce, but it is always possible to ensure that you do not get the rough end of the stick when it comes to financial settlements, ” asserts Anand.

Awareness key to post-marital security What can a woman who has not signed a prenuptial agreement do to ensure an equitable financial deal in case of a divorce?

“Since it is an extremely emotional time, women tend to get extremely overwhelmed, and the strain often deters them from thinking through their finances,” says Supreme Court lawyer Pavan Duggal. “By the time their head clears, it is often too late.”

Despite the definite legal provisions for maintenance for the woman, the amount actually awarded is usually a small primarily because the onus of proving the husband’s income and financial ability to pay the maintenance amount depends on the woman. On the other hand, courts have been known to award unreasonable maintenance to the woman even though the law guarantees equality of gender and even though the woman may be working.

Prenuptial Primer Getting a divorce is a messy business, both personally and financially, but if you sign a prenuptial agreement-wisely handled, well-planned and smartly negotiated, you can at least avoid making the costly financial mistakes that could quash your future.

While every prenuptial agreement is unique in itself since it negotiates terms and conditions specific to the contracting parties, lawyers advise on some basic rules and a couple of essentials that should definitely make the cut if the prenuptial is to hold up. Essentially, a prenuptial should record the intentions of the husband and wife-to-be concerning the division of money and assets (immovable and movable) in the event their union dissolves by divorce.

The prenuptial should be structured with a two-tier approach - in the event of dissolution with children, and in a case where no children are involved. In case there are no children involved in the dispute, the prenuptial should clearly mention whether the maintenance paid would be rendered as a lump-sum, one-time payout (alimony) or a monthly maintenance.

While in the case of children, not only the maintenance, but also custody, (Including visitation rights) and child support should find clarity and mention in a prenuptial agreement. Also, the agreement should state a mechanism by which a guarantee is worked out in order to ensure that the systems that are put in place are actually executed at the time of divorce.

The prenuptial should also decide the fate of property acquired during the marriage - whether jointly or individually owned - and any other financial investments such as shares, fixed deposits, mutual funds, and insurance policies.

Many prenuptial agreements even mandate a minimum cooling period (usually*months) between the husband and wife in case the relationship runs into troubled water, before any divorce proceedings from either party can be initiated.

A lot of prenuptial agreements specify the couples right to remarry after the divorce notwithstanding their financial commitments and responsibilities, and make a no-contest, mutual consent divorce contingent on the execution of the other financial and monetary allocation.