Prenups: One way to avoid real-life dramas
In the 2019 film adaptation of Little Women, a novel by Louisa May Alcott, one of the main characters, Amy March, said, “Well, I’m not a poet. I’m just a woman. And as a woman, there’s no way for me to make my own money.
“Not enough to earn a living or to support my family. And if I had my own money, which I don’t, that money would belong to my husband the moment we got married. And if we had children, they would be his, not mine. They would be his property. So don’t sit there and tell me that marriage isn’t an economic proposition because it is. It may not be for you, but it most certainly is for me.”
Modern marriage is far from the period drama we all love to binge on Netflix, whether it’s Little Women or Bridgerton. Nowadays, marriage doesn’t automatically mean the joint wealth of two people or total ownership by the man, as shown in Little Women.
People are getting married wealthier, wiser, and later. With this change, couples are considering prenuptial agreements more than ever before. It is no longer such a taboo.
A prenuptial agreement or “prenup” is a contract entered into by a couple before marriage outlining their financial rights. It usually includes arrangements on income, debt, property, spousal and child support. In a way, it’s a blueprint for how a couple will handle their money.
Actress Samantha Lopez's advice to couples is straightforward: ‘Hire a good lawyer. Don’t be too emotional. And know your worth.’
I spoke to lawyers, couples, and also Samantha Lopez, an actress who came back from New York to the Philippines in 2018 after her divorce in New York, to better understand what a prenup stands for today.
According to Arleo Magtibay Jr., a practitioner of family law, there are three typical kinds of prenuptial agreements:
- Conjugal Partnership of Gains (all fruits and income during the marriage will belong to the partnership)
- Absolute Community of Property (all fruits and income before and during the marriage will belong to the partnership), and
- Complete Separation of Property (each spouse owns his or her fruits and income).”
There are special arrangements, but these are the most common.
Prenups: An unromantic or romantic gesture?
Traditionally, a prenup is either viewed as unromantic or romantic, depending on your perspective.
For Samantha Lopez, it was the latter: “I was really in love with the guy (her British ex-husband, Warren Edwards). So, I agreed to a prenup. But, at that time, he was making more money than I was. And for me, it was also to prove to him that, ‘Hey, I’m not marrying you for the money,’” she said.
Based on her experience in New York, she said that one of the benefits of a prenup is total transparency. “You have to do a background check, NBI report, police clearance, and executive checkup.”
When she told her mom about signing the agreement, her mother asked, “Oh, what is that?” In the early 2000s in the Philippines, there was a lack of information about prenups, which is why she openly talks about it today in the hope that it will help couples about to get married.
Her advice to couples is straightforward: “Hire a good lawyer. Don’t be too emotional. And know your worth.”
Prenups can give marriage a second lease
Another type of couple that might consider a prenup are those entering into their second marriage. Atty. Toni Verano said, “A couple should be given a chance to have a second lease in their personal lives.”
Alex and Chit are proof of this.
Alex, now in his 70s, was born in the Philippines but currently resides in Australia. He met Chit at church less than a year after his wife passed away. He explained the whirlwind romance: “Like in basketball, I’m already in the last quarter of my life.” The couple signed a prenup, not for each other, but to make Alex’s children feel secure and satisfy his friends.
Prenups are no longer just for the super-wealthy
Besides prenup couples with different levels of wealth, there is now a rise in the millennial prenup, according to Atty. Connie Jimenez-Aquino.
“I have a lot of clients already asking for a prenup before they get married. And among them, I have clients less than 30 years old. So they’re being very practical in thinking of the benefit to the marriage and their family in the future.”
Pam and Fred, a newlywed couple in their 30s, signed a prenup because of assets on her family’s side. She holds the trust to family property. When Pam’s family were just transferring the property to the trust, their family lawyer suggested that she’d need a prenup if she were to get married. She joked, “I’m not Henry Sy levels.” The lawyer replied, “You still need a prenup.”
When Pam got engaged, she immediately brought it up with her fiancé, who did not hesitate to sign the Conjugal Partnership of Gains agreement. They signed six copies, provided by the family lawyer.
After their pandemic wedding, they submitted the agreement with the marriage certificate in the civil registry, where the marriage was celebrated. To Pam, the paper symbolized the protection of her family’s assets and their relationship.
Prenuptial agreements are not sexy. But they could be made romantic, precisely because you do away with possible issues in the future and encourage an open dialogue.
Another couple in their 30s, Ann and Sam, prepared for a prenup because of their varying risk appetites. Ann said, “It was a practical decision because we thought that it’s the best move for financial security. In the risk spectrum, he is adventurous and a risk-taker, and I’m risk-averse. He’s doing business, and I’m in corporate. So, we thought that he could freely do whatever he wanted for the business. And if anything goes wrong, my assets are protected. We won’t be bankrupt.”
Atty. Magtibay explained this rise of the millennial prenup: “Unlike (in earlier days), things are a lot more commercialized now. A lot of businesses are going on. Also, people are more financially savvy now. So, whether they have or don’t have money, entering a prenup will help them manage their resources later on.” Attorney Verano also shared that “prenups are a long-term investment in a relationship.”
Breaking the stigma around prenups
As a practitioner of family law, Atty. Aquino said: “I have annulments for breakfast, lunch and dinner. I know how difficult it can get. Prenups can save people a lot of time,” adding that the annulment process can take five to 10 years. She suggested that newly engaged couples ask tough questions before wedding preparations: Can we discuss our finances? How will our finances be managed? Can we plan? Can we do an inventory?
Attorney Verano emphasized, “Prenuptial agreements are not sexy. But they could be made romantic, precisely because you do away with possible issues in the future and encourage an open dialogue.”
Perhaps, in thinking about prenups, couples no longer need to say in their vows: “For better, for worse, for richer, for poorer.” Instead, they will enter the marriage… financially wiser.
Top tips from lawyers on prenup preparation
As advised by lawyers Connie Aquino, Arleo Magtibay and Toni Verano:
- Start considering a prenup upon engagement.
- Ask each other questions about managing finances.
- Bring a list of assets for clarity when you meet with a lawyer.
- Be transparent and communicate well.
- Approach a lawyer together to understand the process and benefits.
- Consider the cost. There is no menu on how much a lawyer charges for drafting a prenup. It depends on the finances, the prenup’s complexity, and the lawyer’s caliber.
- Understand each other’s risk appetites and outlook on debt.
- Think of the protection of children from previous marriages.
- Clarify marital responsibilities.