Prenuptial Agreements in India

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Prenuptial Agreements in India

Maybe it’s still not very common in India, but prenuptial agreements are something real that needs to understand. We never know what things come in our way; it’s better to have knowledge about everything. Since marriages in India are considered as a most special and auspicious event in one’s life, and not a contract. Prenuptial agreements, also called as ‘prenup’ are rarely seen. In western countries, marriages are considered as a contract between a husband and his wife.

What is a prenup agreement?

A prenup is a contract between the spouses that is signed prior to their marriages. This contract states the settlement of money between the parties in case of death, divorce or separation. In other words, it is an agreement for both the party’s proportion of property, money, assets and anything and everything that each of them will be receiving in case the marriage dissolves.

The legal status of a Prenup agreement in India

Marriages in India are performed by personals laws. Under the Hindu Marriage Act, 1955, a marriage is not a contract, so prenup is invalid. Though under Muslim law and Christian law, marriage is a form of contract, they also do not validate prenup agreements. However, it is governed under the Indian Contract Act, 1872.

The objective of a prenup agreement

Despite being not so common in India, prenups have its own benefits too. In the cases of divorce and separation, a prenup saves both the parties from struggling with dates of hearing in the courts, facing those annoying acquisitions, blaming each other, or getting less payment as alimony or paying more as alimony. In such a scenario, the prenup is not only a time saver but easier to perform. We have to be ready for the beat anyway.

Undoubtedly, most of the maintenance and alimony laws support female spouses, and hence it somewhat lacks to consider the financial conditions of the male spouses. And as a result, the judgment is ultimately in favour of the female spouse. However, in case of a prenup agreement, the financial liabilities are pre-decided, so none of the partners gets prejudiced at the time of separation. A prenup agreement supports financial transparency and, as a result of which, both the partners know the financial condition of each other. This leads to no chance of any kind of fraud.

The clauses of a prenup agreement

  • A disclosure of liabilities and assets of both the parties
  • Financial and the monetary position of both the parties
  • Real estate properties of both the parties
  • An estate planning
  • Sharing of the properties if the marriage gets dissolved
  • Maintenance or the alimony between the parties, if the marriage gets dissolved
  • The custody and maintenance of the child/children
  • The financial status of both the party’s businesses(if any), and the partnership in business (if any)
  • Monetary savings
  • Credit card limits, debts, spending, payments
  • Financial investments
  • Retirement benefits and accounts
  • The claims of medical insurances and life insurance
  • The management of joint bank accounts or other accounts
  • The management of household expenses, bills and other miscellaneous expenses
  • Management of the jewellery

A prenup agreement is enforced only if :

  • The contract should be fair, transparent, in writing and mutually signed by both the parties.
  • The contract should be signed by both the parties and should be executed before the marriage.
  • The contract should be voluntarily made and signed. None of the parties should be forced, beaten, pressurised, etc.
  • The contract must be notarised and certified.
  • The contract should contain a particular clause which should mention even if any provision of the contract become invalid in future; the agreement will be still valid and in force.
  • The contract should mention all the financial possessions, liabilities, assets, etc. owned by both the parties.
  • The contract should not contain any information which is false or invalid.
  • The contract should constitute all the provisions that have been known and discussed by both the parties.

Advantages of a prenup agreement 

  • A Prenup agreement eases the process of maintenance and legal separation and makes it speedy. Also, it helps parties to not to pay exorbitant fees to the lawyers.
  • A prenup agreement protects both the parties from each other’s debts.
  • A prenup contract makes both the parties financial secure, in case any of them dies.
  • A prenup secures and protects the child, in case the parents opt for a divorce or a mutual separation.
  • A prenup agreement financially secures the future of both the parties, as the monetary things are pre-decided.
  • A prenup contract secures the custodial and re-marriage rights of both the parties.
  • This contract prevents the business of the parties to get divided.
  • A prenup contract guarantees maintenance, alimony and the actual spousal support needed.
  • A prenup agreement is most helpful in preventing the messy situation in court proceedings at the time of a divorce or a legal separation.
  • A prenup contract reduces the chances of any conflict between the parties, which leads to a better understanding between them.

Though legally there is no drawback of a prenup agreement, nut, it is still a social taboo in India. It creates a negative impression of the couple who does it, or any of the partners, who offers it. Because marriage been considered as a very holy practise, couples who opt a prenup agreement, are regarded as either way too practical, or has been decided that the marriage won’t last.

Disadvantages of a prenup agreement

  • Opting a prenup agreement is a difficult thing to do for both the parties, as they are constantly judged by society.
  • In some or the other way, a prenup agreement impliedly declares that the marriage is not going to last forever, as it somehow encourages the dissolution of marriages.
  • With all the pros of a prenup agreement, it also can affect the couple in unfavourable conditions post marriage.
  • A prenup agreement can intensify the importance of money between the couple, instead of strengthening marriage and understanding.
  • A prenup contract and unfavourably affect the lifestyle of both parties.
  • A prenup can also enforce a ‘no child’ provision (depends upon both the parties).

What happens when you don’t make a prenup agreement

When a couple opts for not making a prenup agreement, their state laws determine that who owns the property that any of them acquires during the marriage. Also, what is to happen with property, in case any of the partners dies, or the divorce, their state property law, decides that. The property acquired during the marriage is often called as community property or marital property that depends on the state law in which the couple resides. The state property law can also decide (if it exists) on the happenings of the property one owns at the time of marriage.

Provisions of a prenup agreement that can be overruled by a court

There are certain provisions of a prenup agreement that can be overruled or rejected by Indian courts. They are:

  • If the agreement or any provision of the agreement encourages divorce or judicial separation.
  • If the agreement or contract or any provision mentions a spousal waiver.
  • If the agreement or any provision of the agreement waives permanent or temporary alimony or counsel fees.
  • If the contract or any provision of the contract waives child custody, child maintenance and support.
  • If the contract or any provision of the contract mentions regulation of conduct during the marriage.
  • If the agreement or any clause of the agreement mentions the religious upbringing of the children.
  • If the contract contains a no child provision.
  • If the contracts, limits or decides any ground of divorce.
  • Severability

Prenup agreements under Muslim law and Christian laws

As mentioned earlier, a marriage under Muslim laws and Christian laws are considered to be a contract between both the parties. A marriage contract in both laws contains certain automatic property rights for both the spouses. When couples do not sign a prenup agreement before marriage, their natural rights, according to both the laws are:

  • Both the parties share the ownership of property or properties that have been acquitted during the marriage. This is implied that the property they acquire will be divided between both if they decide to divorce or death of any of the party.
  • Both the parties incur debts, that other party may have to pay
  • Both parties share the control and management of any community or marital property. This right may include a right to sell or give away the property.

Conclusion

If both the parties both agree on signing a prenup contract mutually, and sign the contract voluntarily, without any threat. Influence, force or coercion, the agreement can be latterly considered as a reference or n evidence by the Indian Contract Act, 1872. The documents of the contract will be equally valuable as any other contract in a written or oral format. However, the document must state the provisions clearly.

Post by Amrita Chakravorty

A post-graduate in Law, Amrita Chakravorty has been writing for legal websites for over three years. She provides writing and editing services. Her educational background and experiences have given her a broad base from which to approach many topics. Having a keen interest in working against gender discrimination, she especially enjoys writing about family law, women law and domestic laws.