Hong Kong Divorce Lawyer: Hong Kong Pre-marital Property Agreement
As a Hong Kong divorce lawyer, I often receive clients’ inquiries about prenup agreements and its legal effect in Hong Kong. Usually, if one party has a large amount of property before marriage, he may be motivated to consider the signing of a prenup agreement to protect his interest in case of a divorce. This is especially significant since Hong Kong law, unlike some other jurisdictions such as the Mainland China, may not distinguish the prenup assets from assets accumulated during the marriage upon divorce. Many questions naturally flow here. Does a spouse’s premarital property need to be distributed to each other upon divorce? Can the parties sign a pre-marital property agreement to protect a party’s pre-marital property from being claimed by the other party? Alternatively, can the parties sign a premarital agreement to agree that the money earned after marriage by each party shall only belong to that party upon divorce and shall not be claimed by the other party, regardless of the duration of the marriage?
Prenup property agreement: traditional legal position
After the handover of sovereignty of Hong Kong from Britain to China, Hong Kong inherited and kept its common law tradition. Although the post-1997 precedents of the British courts are no longer binding on Hong Kong, they still have important reference and persuasive value to Hong Kong court .
According to Hyman v Hyman which is a case in the UK before 1997 and which is binding to the Hong Kong courts, the tradition position of Hong Kong law on this issue is that the prenuptial property agreement is not binding on the court but it is only one of the environmental factors which the court may choose to consider on deciding on the distribution of matrimonial property and alimony.
On the other hand, there are a series of elements prescribed by Articles 4 and 7 of the Marriage Procedure and Property Ordinance (MPPO) which the courts are required to consider. Such elements are aimed for the protection of the vulnerable party to the marriage and the protection of children based on social public policies. The prenuptial property agreement cannot violate the public policy of the society.
Prenup agreement: new common law position
Marriage Radmacher v Granatino [2010] UKSC established a new position in English law on prenuptial property agreements. According to this case, if the prenuptial property agreement is signed on the premise that both parties are voluntary in entering into it and fully understand the content and the legal effect of the agreement, and the contents are fair and reasonable, the court should recognize the prenuptial property agreement in order to respect the party’s autonomy of contract.
In Hong Kong, there is no clear case of following Radmacher at time time of this article. However, considering the important influence of British law on Hong Kong law and the trend of social development, it will be a matter of time before the Hong Kong courts accept the principles of the above cases. In any case, the significance of the Radmacher case is to give more weight to the prenuptial property agreement in the court. However, in the case of divorce, the court’s consideration of the weight of the prenuptial property agreement still depends on the court’s discretion.
The factors that the court will consider in deciding whether to uphold the terms of a prenuptial property agreement
Factors affecting the court’s tendency give weight to the prenuptial property agreement includes whether the parties are clear about the contents of the agreement and its legal consequences, whether the parties have made full and frank disclosure to the other party regarding facts which might affect the other party’s decision, and whether there is any factors leading to invalidity of the contract such as coercion, fraud, misrepresentation, etc.
Factors that add the court’s tendency to give a heavier weight to the prenuptial property agreement include that the agreement makes appropriate arrangements for the interests and needs of the children, the agreement provides appropriate compensation for the disadvantaged party’s contribution to the family, the agreement provides for different ways of disposing the properties acquired before and after the marriage;
If the prenuptial property agreement attempts to provide for an unforeseen random event, such an agreement is more likely to be deemed unfair by the court.
How to make a pre-marital property agreement
Taking into account the guidance provided in the above cases, if a client needs to make a pre-marital property agreement, it is necessary for the client to clearly understand the legal effect of the prenuptial property agreement and its certain degree of uncertainty. At the same time, the following aspects can be considered to ensure that the pre-marital property agreement is recognized by the court as much as possible.
- It is recommended that both parties to the pre-marital property agreement seek independent legal advice, and it is best that each has its own independent legal representative. If one party decides not to hire a lawyer, the lawyer of the other party must also clearly recommend that party to seek independent legal advice. The agreement should make it clear that both parties have clearly understood the legal consequence of the agreement, and both parties have sought independent legal advice or voluntarily gave up seeking legal advice.
- The pre-marital property agreement shall make a different agreement between the property owned by the parties before the marriage and the marital property gained after the marriage.
- Both parties should be given sufficient time for considering the contents of the agreement before signing the agreement.
- The pre-marital property agreement should consider the needs and interests of the children, as well as the reasonable living needs of the disadvantaged party and the compensation for their contribution to the family.
- If there are predictions of random events that may occur in the future in the agreement, such clauses may be deemed unfair and ruled as invalid.
If you have any questions about the Hong Kong prenuptial property agreement, please do not hesitate to contact our lawyers of Hong Kong family law team for a consultation by writing to [email protected].