'I do', but conditions apply
Three years earlier, Bangalore-based investment banker Sangeeta Cherian (name changed on request) refused to marry as her boyfriend wanted to enter into a prenuptial contract. Six months before, when her marriage was being fixed with another person, he insisted on a prenuptial pact, too.
With more working couples getting married, and both having accumulated a certain amount of wealth, the fear of losing the already-created and future wealth in case of a separation is driving most of them for such contracts.
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According to legal experts, as many as 20 per cent of marriages in metros have couples insisting there be some protection of their wealth before they say, ‘I do’.
According to R N Gupta, managing partner of S N Gupta & Co, this is more common among wealthy business families, as they want to demarcate the rights of the couples in terms of property.
“Yes, it has become common in India. But, mostly, people are just following the US norm blindly. What they don't understand is the fact that there is no such law in India," he says.
That is, a prenuptial agreement comes under the Contract Act. In case of a legal dispute, the Marriage Act would supersede it.
A prenuptial agreement is a contract that would-be marrying partners sign, laying out terms and conditions for distribution of financial assets, property, alimony or maintenance, monthly compensation and so on, in the event of a divorce. A big advantage of a prenuptial pact is it forces couples to have that all-important financial discussion before marriage.
Issues that can be efficiently dealt with in a prenuptial pact range from divorce settlements and prevention of disputes, regarding joint accounts and custody issues of children after the dissolution of a marriage. Another important benefit is that the agreements offer protection from the spouse’s debts, if any.
For making a prenuptial contract, both partners need to set out all their assets and liabilities clearly on paper. They could also add the assets and debt they might create after marriage. Then, they could discuss how all or joint assets and liabilities be divided if the marriage dissolves. Once the separation and share is mutually decided, both parties can sign and approve the same and maintain it. This will involve zero cost, unless the lawyer charges a fee.
If you want sanctity to it, the individuals could get it verified and signed by their own lawyers or together get it stamped and certified by a notary. Here, stamp duty will apply depending on the state you are in and a small fee for the notary.
In India, prenuptial agreements are not governed by the marriage laws, says Sandeep Nerlekar, managing director & chief executive officer (CEO), Warmond Trustees & Executives, as marriages here are not considered agreements.
However, under Section 10 of the Indian Contract Act, prenuptial agreements have as much sanctity as any other contract, oral or written.
Experts say India has various laws governing marriages and so for a contract to hold good will be possible only under statutory provisions. Therefore, such contracts might not be binding in the Indian context.
For instance, if the wife says she will have no right over the husband's property, according to the Stamp Duty and Registration Act, for properties costing over Rs 100, she will have to file a relinquishment of property with the sub registrar only then can she not claim her share in the property later, explains Gupta.
Courts do take cognizance of a prenuptial agreement if both parties had agreed. For instance, if you take the marriage discord to court and request that assets be divided according to the contract you made, the court may agree. Otherwise, divorce norms override prenuptial contracts, says Delhi-based lawyer P S Dhingra, consultant & CEO, Dhingra Group of Consultants.
Additionally, children born from such marriages have right over the father's assets even if the wife has agreed to not have any right over the husband’s assets. There are no cases as yet, say experts, where contracts have been upheld as there are cases where partners disagree to comply by the contract. And, there are cases where women earn more than the men and still ask for compensation, which men do not agree to.