“Prenup”- Securing the Sacrament

“PRENUP”- SECURING THE SACRAMENT

A prenuptial agreement is a pre–marital contract between two people for the fair division of money, property or assets in case of a divorce or death. It serves as a mode to distinguish between pre-marital and post-marital assets. Although the distribution of marital assets can be accomplished by a court of law on the dissolution of marriage, some couples opt for a pre-nuptial agreement to feel financially and emotionally secure. A “prenup” may provide protection from the partner’s debt loads, prevent business concerns from getting divided, ensure spousal support in terms of alimony, and guarantee child support and remarriage rights and even work on custody issues.

WHY COUPLES OPT FOR PREMARITAL AGREEMENT

Marriage in most cultures is considered a sacrament, thus the idea of introducing a contractual agreement between parties prior to marriage seems to be blasphemous. But that is the ethical argument. High profile asset settlement like the one that resulted from the Mills-McCartney split portrays marriage as a “romantic folly”. Premarital agreements are most powerful in short childless marriages, their power decreases as passage of time and presence of children.

The argument that premarital agreements and no fault divorce are correlated and in effect promote opportunistic behavior is common among several jurists. It is, however, human nature to be opportunist. Thus when there is no legal incentive to perform spousal duties, and the marriage can be broken up citing “irreconcilable differences”; the situation arises when a spouse gives up his/her employment or postpones his/her career in order to make the marriage work. Such a step leaves the said partner having invested a significant amount of opportunity in the marriage, and if the default rules are petty as per post marital maintenance, leaves him/her at the mercy of the other partner. In McFarlane v. McFarlane it was stated that women who sacrificed their careers to raise children would receive compensation that could be claimed post divorce. By converse, it may be argued that a fault based divorce system relies solely upon evidence, which may be difficult to procure while examining a marriage, postmortem. Reduction or denial of alimony is common in legal systems that champion a no fault divorce system, so that marital opportunist behavior is not rewarded.

In such a situation, it is not difficult to envisage the premarital agreement playing a significant role in protecting future spouses against opportunistic behavior. A prenuptial agreement agreeing to waive of the rights of either party to sue for divorce is thus void as it is in violation of public policy.

Prenuptial agreements are the easiest way to avoid messy divorces where mutual mudslinging is often inevitable. The disclosure of assets and demands that bask in the financial stratosphere often attract unnecessary attention to an already warped household. An agreement drafted prior to entering the state of holy matrimony serves to ensure that both spouses are aware of their wants and needs in case a separation is necessary in the future; and is a simpler method to ensure that a child is financially taken care of despite his parents choosing to part ways.

PRE NUPTIAL AGREEMENT IN THE UNITED STATES

A prenuptial agreement and a no-fault divorce are almost synonymous in their portrayal of marriage as a contract voidable at the option of either party rather than a holy sacrament that cannot be set aside for except for some physical or mental infirmity of a person. In Italian and Dutch Law, a waiver of alimony in a premarital contract is generally unenforceable. French Judges determine the post-marital compensation payment regardless of an existing prenuptial agreement. In English Law, premarital maintenance agreements are not binding on the courts, although Judges may take them into account while deciding alimony.[1] A pre nuptial agreement is fairly common in the USA and is recognized by all the 50 states. The Florida Supreme Court held in Posner v. Posner[2] that prenuptial agreements that contemplate divorce should no longer be held to be void ab initio as ‘contrary to public policy’. Under US Law, five elements are needed in order to make a pre-nuptial agreement legally binding:

1. The agreement must be in writing.

2. The agreement must be executed voluntarily.

3. There must full and fair disclosure of assets at the time of the execution of the agreement.

4. The agreement cannot be unconscionable.

5. The agreement must be executed by both parties in person before a notary public.

US Law prohibits pre-nuptial agreements to have any say in the matter of children of the marriage, especially custody and access issues; the reason being that issues concerning the children must be decided in the children’s best interests. The presence or absence of an independent legal counsel for a party in a pre-nuptial agreement will determine if the terms are read down against the party with the legal counsel.

Unlike ordinary contracts, a pre-nuptial agreement does not need consideration; the marriage itself performs that task. Prenuptial contracts are subjected to a higher degree of scrutiny than commercial contracts because of the special standards that govern their enforcement.[3]

Pre-Marital Agreements in 27 states in the US are governed under the Uniform Premarital Agreements Act, 1983 (UPAA). It defines a “Premarital Agreement” as “an agreement between prospective spouses made in contemplation of marriage and to be affective upon marriage”[4]; and property as “an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and savings.”[5] It states that a premarital agreement must be in writing and signed in person by both parties, and is enforceable without consideration,[6] as per case law exhibited in Barnhill v. Barnhill[7], Friedlander v. Friedlander[8] and contrasting with Wilson v. Wilson.[9] The ambit of the Act includes the rights and obligations of the parties and to transact with it; the disposition of the property after separation, divorce or annulment, death or the occurrence or nonoccurrence of any other event; the modification or elimination of spousal support; choice of law governing the construction of the agreement, and any other matter, including conjugal right as not in violation of public policy or a statute imposing a criminal penalty.[10]

A premarital agreement is void if there was no free consent to the agreement, the terms of the agreement are unconscionable, there was no full and fair disclosure of the assets of the parties, or there was incomplete knowledge of the same.[11]

PRENUPTIAL AGREEMENTS IN INDIA

The Indian Contract Act, 1872, does not recognize the existence of a prenuptial agreement. Decisions to this effect therefore have to be based on case law, where it exists, and interpretation of the existing code.

Several things must be considered while discussing this question: The validity of a prenuptial agreement under the Indian Contract Act, whether it contravenes public policy, and the implementation of an agreement under the various codes of personal/family law that govern Indian citizens.

Section 10 of the Indian Contract Act states: “All agreements are contracts if they are made by the free consent parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.”

Section 23 of the Indian Contract Act states: “The consideration or object of an agreement is lawful unless . . . the Court regards it as immoral, or opposed to public policy.”

A Hindu marriage is considered a sacrament, and not a contract. A marriage is said to be pre ordained and therefore the thought of divorce in a Hindu marriage is blasphemous. Thus a prenuptial agreement can be said to be contravention of public policy or immoral as it envisages a situation in which a holy sacrament is defiled.

However, both the Hindu Marriage Act and the Special Marriage Act contemplates and in fact establishes procedural reasons for divorce. While the Hindu Marriage Act provides for specific grounds under which a spouse may divorce another, Special Marriage Act contemplates the situation of a “no fault” divorce and establishes protocols for the confirmation of such a separation of marriage.

Thus, it is argued that since the legislation itself contemplates the breach of a sacrament, then the prenuptial agreement cannot be said to be in contravention of public policy.

Debate arises on the question of consideration of a prenuptial contract. It has been stated that at the time of separation of marriage, the wife staying apart from the husband is consideration enough for the granting of alimony and child support.[12]

Muslim personal law states marriage to be a personal contract, with the object being the legalization and the procreation of children. Under Muslim law, a prenuptial contract exists between the husband and the wife, based on the consideration of mahr, a sum of money that the husband pays to the wife as an effect of marriage. However, a premarital agreement may be superfluous, considering that the marriage contract itself contains all the provisions concerning all legitimate conditions that are agreed on by the parties.

There are few cases in that deal with prenuptial agreements. In the case of Takait Mom Mohini Jamalai v. Basanta Kumar Singh[13], it was stated that marriage under Hindu law, while being a contract, is also a sacrament, and is more religious than secular in character. It was stated by Banerjee, J. that “it is a rule of Hindu law that for the fulfillment of the duties which the law imposed on a wife she must reside with her husband wherever he may choose to reside; an agreement on the part of the husband that he will not be at liberty to remove his wife from her parent’s abode to his own abode would if permitted, defeat the clear rule of Hindu Law on the subject.”[14]

The case law stating that a prenuptial agreement between the spouses that do not allow them to stay together and enforce conjugal rights is void has been followed in A. E Thirumal Naidu v. Rajammal[15]; and Krishna Iyer v. Balammal.[16]

The present position on prenuptial agreements in Indian Courts is that they may be taken into consideration for the disbursement of marital assets. However, under no circumstance can they called as binding on a couple, especially if the terms specify waiving of rights to property.

THE STARS

The most notable prenuptial agreements are found in Hollywood, where this arrangement is pretty common is celebrity marriages. Notable examples of prenuptial agreements include the one between Tom Cruise and Katie Holmes; Nicole Kidman and Keith Urban and Sir Paul McCartney.

The agreement between Tom Cruise and Katie Holmes covers significant ground, and goes so far as to even state that the alimony Katie Holmes will receive if they stay married for 10 years is double of what she will receive if they stay married for 5 years; with $3 million a year to a maximum of $33 million for each year she is married to Tom Cruise, as well a palatial home in California. If the marriage lasts for 11 years, the prenuptial agreement becomes void and California’s property laws kick in, making Holmes entitled to half of Cruise’s assets.[17] The agreement also specifies the amount of alimony/child support she will receive on producing a male heir for Tom Cruise.

The agreement between Nicole Kidman and Keith Urban also incorporates a mode of protection against asset distribution in case of a divorce of marriage. Nicole Kidman, who is worth nearly $150 million, has signed a prenuptial agreement that guarantees Keith about $600.000 a year for every year he is married to Nicole Kidman. IN addition, there is a clause that allows Nicole Kidman to rescind all payments to Keith if he, an ex heroin and cocaine addict, uses illegal drugs or alcohol excessively. The agreement also calls for joint custody of the children the couple have, if any, although Urban would be forbidden to take them out the country Kidman is residing in.[18]

Also notable is the prenuptial agreement or the lack thereof in the case of Sir Paul McCartney, whose divorce with Heather Mills made her one of the richest women in UK, with a fortune close to $400 million.[19]

In light of the above discussed cases, it is easy to conclude that prenuptial agreements, while not the most romantic thing on Earth, provides for a number of persuasive reasons why to have one. Having a prenuptial agreement does not necessarily mean that the couple is having a divorce; financial matters are administered to the satisfaction of both parties before marriage, rather than a prolonged court battle after, the financial well-being of children from a previous marriage can be assured, and in the event of death, a prenuptial agreement eliminates battle over estates and finances.

From a more cynical point of view, seeing as the authority given to women under Section 498A of IPC to financially, legally and socially humiliate the family of the groom, it might be a good idea to have a prenuptial agreement that spells out the distribution of property before marriage, so the tendency to misuse Section 498A is lessened.

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[1] J. Franck, “Understanding the Interrelation of No-Fault Divorce and Premarital Contracts”, International Journal of Law, Policy and the Family, 225, (Dec 2009).
[2] Posner v. Posner, 233 So. 2d 381 (Fla. 1970).
[3] A. Marston, “Planning for Love: The Politics of Prenuptial Agreements”, Stanford Law Review, 887-916, (Vol. 49, No. 4, Apr., 1997).
[4]Uniform Premarital Agreement Act 1983, available at , (Jan. 8, 2010).
[5] Id.
[6] Ibid.
[7] Barnhill v. Barnhill, 386 So. 2d 749 (Ala. Civ. App. 1980).
[8] Freidlander v. Friedlander, 494 P. 2d 208 (Wash. 1972).
[9] Wilson v. Wilson, 170 A. 2d 679, 685 (Me. 1961).
[10] Supra note at 4.
[11] Supra note at 4.
[12] Meritt v. Meritt.
[13] Takait Mon Mohini Jamalai v. Basanta Kumar Singh, ILR (1901) Cal 751.
[14] Id.
[15] A.E Thirumal Naidu v. Rajammal, AIR 1968 Mad 201.
[16] Krishna Iyer v. Balammal, ILR (1911) Mad 398.
[17]“Tom Cruise and Katie Holmes Marriage Profile”, available at , (Jan. 9, 2010).
[18] “Nicole Kidman and Keith Urban, Prenuptial Agreement”, available at , (Jan. 9, 2010).
[19] “McCartney Splits”, available at www.cbsnews.com/stories/2006/05/18/entertainment/main1628551.shtml>, (Jan. 9, 2010).