One possible alternative to pre-nuptial agreements

Today the Australian media reported on a High Court case involving a pre-nuptial agreement (‘pre-nup’) between a wealthy property developer and his younger bride, who he met via a “web site for potential brides”:

High Court tears up prenuptial agreement between property developer and online bride‘ (8 November 2017)

Pre-nuptial agreements have never been a magic bullet to prevent financial exploitation where one spouse (usually the man) takes far more assets into a marriage than the other. It has always been a case of it being better to have a pre-nup than nothing at all, in order to reduce the likelihood of subsequent divorce-rape.

In Australia, and elsewhere, even competently and ethically prepared pre-nups are subject to legal challenge. In the case cited above, the nature of the agreement was found to constitute ‘unconscionable conduct’. This was said to be on the basis of both a demand that the agreement be signed or the marriage would not go ahead, and with respect of the terms of the financial settlement set out in the agreement.

One alternative that might be considered would involve relatively minor changes to relevant Australian law. What is proposed here is by no means a complete fix, but it would represent at least a step in the right direction.

In Thailand, as in various other countries, the law differentiates between assets accumulated prior to marriage, and assets accumulated during the marriage:

Sin Somros is/are the marital assets or property of the marriage jointly owned by husband and wife, in general all properties acquired after the marriage (except those listed in section 1471 under 3) (Source)

Sin suan tua is property which is exclusively owned by only one of the spouses. The owner of the sin suan tua property is free to dispose of it without having to account to the other spouse. Under the Civil and Commercial Code (CCC), property comprising the sin suan tua of a spouse consists of: (i) property belonging to the spouse before marriage; (ii) property for personal use, dress or ornaments suitable for the spouse’s station in life, or tools necessary for carrying on the profession of the spouse; (iii) property acquired by the spouse during marriage through a will or gift if that property was intended to be sin suan tua; and (iv) the khongman (a betrothal gift). (Source)

Thai law also allows for couples to enter into a pre-nuptial agreement, the details of which are as set out here.

The reality is that the current divorce laws in western countries favour the interests of women and were written at a time when society was a very different place, for example pre-advent of no-fault divorce and at a time when most women were house-wives.

Read this other blog post to see what happens in a situation where the husband still typically brings far more assets into the marriage than the wife (indeed the wife is more likely to be in debt at the time of marriage), where most divorces are initiated by women, and where the court system is dominated by white knights and older gents guided more by chivalry than a genuine commitment to justice.

A situation where pre-marriage assets are quarantined from seizure seems to be eminently fairer to me, but which politician/s in Australia would publicly support it? Sadly, very few or none at the present time – and certainly no-one in the ranks of the major parties.

Failure to consider and introduce legal reforms such as this will only accelerate the trend of men avoiding marriage and de-facto relationships, and the deleterious social impacts arising from that.

It will be interesting to see if a positive outcome of same-sex marriage in Australia will be greater enthusiasm for law reform related to the distribution of assets in the event of divorce. When straight men are the only ones impacted then such reform is anything but urgent (think, ‘glacial’). Indeed we have already seen heightened interest in the reform of laws related to alimony and spousal support brought on by the increasing numbers of cases involving divorces involving female spouses as primary bread-winners.

See also:

How advice at the hairdresser’s to a millionaire’s ex might have changed prenups in Australia forever (10 November 2017)

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