You fall in love; it’s a whirlwind, it’s magic, you are happy. You plan a white wedding, or whatever colour speaks to your fancy; apparently, vomit green is appealing to some couples. Whatever the case, after the dust settles, the reality is that money and assets are one of the most common reasons for discord in any relationship.
Surveys show that about 70% of couples fight about money within a month of dating. 90% have considered separation because of it. Families with a working dad and stay at home mum are slowly edging towards extinction. Women are working, running businesses and making their own money and purchasing assets. Therefore, it is vital to discuss money and what you want to do with individual assets before taking those vows.
Marriage is an intimate and complementary union intended for the most part to enable two consenting adults to share a life. However, the reality is that 50% of marriages end up in mutual separation or divorce. To put it plainly, the next time you’re at a dinner party with married couples, only half of the couples present will keep the vow “until death do us part”. The other half may go down an acrimonious path to divorce.
Under the law, marriage is a contract that varies over time but maintains certain inviolable terms that can be grounds for dissolution. While we all dream of happily ever after, we must temper our ambitions with practicality. Sometimes things go wrong, and it is prudent to plan for that as well. As millennials get hitched later in life, both parties come into the relationship with money and assets. Once you start on the path to divorce, are you willing to give up everything you earned or inherited to your paramour? Suppose you are a housewife, or househusband, who has supported your spouse tirelessly, ensuring they have fresh hot meals at the end of a long day, the children are taken care of, and you are there every night to listen to the discussions about ugly fights with colleagues at work or to ensure that you act as a stand-in for every support role as they set up their business, how do you safeguard your interests and your future? A prudent thing would be to agree from the get-go the terms of separation. That’s where prenups come in.
What is a prenup?
A prenup is an agreement made by parties to an intended marriage and establishes each spouse’s property and financial rights in the event of a divorce. While prenups are not a regular part of the average Kenyan’s marital process, there has been an increase in signed agreements since enacting the Matrimonial Property Act, 2013 (MPA, 2013). The Constitution of Kenya 2010 provides for the sanctity of the right to property under Article 40. It protects the right to own property individually or in association with others. Section 6(3) of the MPA 2013 introduced that spouses may enter an agreement before the marriage to determine their property rights.
What do we include in a prenup?
While premarital assets are usually protected, the trouble comes with marital property. The assets you acquire or build during your marriage are up for distribution. If you buy a house or start a business together, even if you only use one spouse’s money, it becomes marital property. Prenups typically contain clauses on;
- Liability limits for expenses and debts incurred by a spouse before and up to the marriage’s dissolution,
- Issues relating to children from previous marriages or relationships,
- Ownership of gifts given before and during the marriage,
- Maintenance and alimony provision,
- Distinction of assets excluded from the matrimonial property.
The prenup provisions cannot contain a promise to perform any illegal acts or contain clauses to limit the rights of a child of the marriage or stipulate child support to the said child. In essence, the prenup must be fair to both parties, and if not, the Court is empowered to set aside a prenup on the basis of fraud, coercion or any unjust act.
Who needs a prenup?
Often, people assume prenups are only for the wealthy, and they seek to protect the wealthy party. Prenups are beneficial to both parties and protect the less affluent spouse in the event of a divorce or death. Not everyone needs a prenup, but you should know how the law works regarding the division of marital property before deciding against prenups. If you have holdings on your own, children from another union or parties interested in your property like siblings or business partners, it is imperative to have a prenup. Prenups allow you to protect your current and future assets and are cheaper in time, emotions, and money than an expensive and tedious divorce.
How and when should I bring up prenups?
A word of caution, this is a sensitive conversation: you’re planning your wedding, and someone is talking about prenups. The party that brings it up is likely to get an adverse reaction. There is still a negative connotation to prenups. On the one hand, you’re planning a future, and on the other, you’re creating an escape hatch. Also, it implies the other party is interested in your money, and you’re putting a limit to their windfall should the marriage dissolve.
As with any difficult conversation, you require a lot of emotional intelligence and situational awareness. Don’t start the discussion in the middle of an argument or without planning. Feel out your partner on what they think about prenups in general and adapt your approach. As you have the conversation, make it very clear that this is a precaution and is not a reflection of your relationship’s status or what you think of your partner. Negotiate and comprise with your partner and keep each party’s best interests at heart.
A prenup is a contract; you both have to agree on it and the terms. If you don’t do this right, likely, you will not have a prenup to sign or may sow discord in your relationship. Should your partner refuse to sign a prenup, what next? Maintain your premarital property records and store them well. Financial institutions only hold records for seven years, so do not rely on them to provide them at will. Store your bank statements, receipts of transfers, investments in businesses and assets, inheritance and gifts, digitally for ease of reference.
How do I go about setting up a prenup?
If you agree with your partner to get a prenup, here are a few rules of thumb;
- Start early: Talk about the prenup as early as possible and close the matter well before the event. Signing a prenup one week before the wedding is ill-advised
- Be honest: You need to declare all your premarital assets to protect them. You also need to disclose your liabilities or other interests in your property
- Be fair: Yes, you can limit access to your entire portfolio; however, in the event of dissolution of your marriage, you are required to provide for your spouse to the standard that they have become accustomed
- Have a separate lawyer for each party: You should both seek legal advice from independent lawyers. You have different interests, and there’s too much legal-speak to wing it with a template off the internet. Get experts to guide you. The wealthier party should pay legal fees for the other party’s lawyer of choice.
- Communicate: Even before you talk to the lawyers, communicate your expectations and reasoning to each other. You’re entering a partnership and should be able to communicate effectively with each other.
- You can make amendments during your marriage. As with any other contract, any changes should be in writing, and both parties must sign the document.
In essence, a prenup is hoping for the best and planning for the worst. Many will advise you not to get a prenup because it shows a lack of commitment and faith in the marriage. Further, if you don’t handle the conversation well, it can be a source of discord that shakes the foundation of your relationship. However, having a prenup can save you a lot of financial and emotional distress if your marriage dissolves.