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Why prenuptial agreements are increasingly popular among modern Asian families
9 November 2023 | Applicable law: Hong Kong, Japan, Singapore | 3 minute read
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When it comes to romance killers, prenuptial agreements usually top the list—but that’s not necessarily the case for everyone. Jocelyn Tsao, for instance, feels that being able to openly talk about finances and the future can bring couples closer. Happily married herself, she advises on all aspects of matrimonial law—including divorce, prenuptial agreements, childcare and custody, and financial disputes—as managing director and head of the family law practice at Withersworldwide Hong Kong.
“When I first started practicing family law in 2009, I did not have any prenuptial enquiries at all,” she says. However, she’s seen a steady increase in enquiries over the past decade, especially in the past five years. “Some people want to have more control and certainty over what is otherwise unpredictable, especially after experiencing the pandemic. They realise the need to plan for contingencies such as a divorce, and see that succession planning is not something only for those who have reached an old age.”
It’s not just young people who are more open to the idea of prenups. “I’ve definitely seen older generations being more receptive,” says Tsao, citing a case where the parents of a recently engaged 28-year-old woman, who is set to inherit a huge fortune, came to Withers for advice on prenuptial agreements.
Ivan Cheong, head of the family law practice for Withersworldwide Singapore, agrees. “We have seen a very similar trajectory in terms of the uptake of prenups, with about 40 to 50 cases per year,” he says.
Prenuptials and trusts are two of the strongest weapons you can use to shield the family wealth from being attacked in the event of divorce.
“Dynastic trusts are especially powerful because their intention is for the wealth to stay within the family for generations to come,” adds Cheong.
One misconception is that prenups only protect the rich. “One of the most important requirements of a prenup is that its terms must be fair in the eyes of the court,” explains Tsao, which means it can’t leave one party in financial difficulties. “That’s why prenups can actually be favourable—and even empowering—for the financially weaker party, as it gives them a sense of financial security to know exactly what would happen if they were to contemplate a divorce in the future.”
Think of it like insurance.
Family structures in Asia are also changing, making wealth protection even more important. “Modern families are increasingly international, with different nationalities and more than one home base within a family,” says Cheong. “People are getting married later, which means they have amassed more wealth by the time this happens.”
“LGBTQ+ couples and ‘rainbow families’ are increasingly recognised as a type of modern family, which may pose all sorts of questions regarding their rights and obligations,” adds Tsao.
As prenups are acknowledged by courts in many jurisdictions worldwide, they’re becoming much more accepted as a wealth protection tool and a lot less taboo.
Getting travel insurance or critical illness coverage doesn’t mean that you want [anything] to happen. Similarly, entering a prenuptial agreement does not mean you’re planning to get divorced.
Credit: Published in partnership with Tatler Hong Kong. View the full feature here.
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