What Is a Prenuptial Agreement: Is It Necessary in Managing Finances?

Getting married and starting a new life together with your significant other should be an exciting time filled with hope, dreams, and plans for the future.

The recent break up — calling off their engagement — of Dominique Roque and Bea Alonzo has sparked gossip among Filipino netizens about the real reason behind it. Is it because Dominique doesn’t want to sign the prenuptial agreement?

But what’s even more interesting is that there was a spike in the search term a few weeks ago as the news started to float online. While the real reason should now be kept among the ex-love birds, let’s unpack the concept of prenups for couples who plan to tie the knot soon.

In this post, we will explore a prenuptial agreement, its pros and cons, and whether it is a worthwhile consideration for Filipino couples as they embark on their journey of building a life and future together.

What is a prenuptial agreement?

A prenuptial agreement, often called a “prenup,” serves as a contractual blueprint that the couple lays out while planning to marry. It outlines how they will allocate their financial assets and property in the unfortunate event of annulment (in the Philippines) or the death of a spouse.

In layman’s terms, think of it as a roadmap for their stuff—money, property, and other things—to make sure who should handle this or that. It’s a preemptive plan to clarify and reduce disputes over assets and liabilities should that unfortunate situation come.

In the context of personal finance, here’s how a prenup can be relevant:

• A prenup can specify which investments are classified as separate or owned by one spouse versus those considered marital property like real estate, stocks, and bonds.
• Couples can use the prenup to identify who’s in charge of paying debts should they separate — these debts incurred can be before and during the marriage.
• Lastly, the prenup can outline how the couple will manage their income, whether they will have separate or joint bank accounts, and who’s responsible for the household expenses.
  What are the pros and cons of having a prenuptial agreement?
  Technically on paper — marriage certificate — the old saying is true when you get married: what’s yours is mine, and what’s mine is yours. Unless otherwise stated by law and of course if there’s a prenup arrangement.

Let’s take a look at the pros and cons of having one:

Pros of prenuptial agreement before getting married

• Protection of assets: A prenuptial agreement can safeguard individual assets brought into the marriage, ensuring that any property owned before the marriage remains with the original owner in case of legal separation.
• Clarity on financial rights and obligations: Couples can outline how expenses will be shared, whether joint accounts will be maintained, and how debts will be managed, preventing conflicts and misunderstandings.
• Protection of family inheritance: A prenup can protect family inheritance from becoming a contentious issue in the event of annulment, preserving cultural and emotional values.
• Business interests: For those owning businesses, a prenup can prevent potential financial losses and disruptions to business operations arising from divorce.
• Peace of mind: Knowing that assets and financial responsibilities are clearly defined can reduce stress and uncertainty in the relationship.
• Legal recognition: Prenuptial agreements are legally recognized in the Philippines and can be tailored to the couple’s preferences within legal limits.

Cons of prenuptial agreements for Filipino couples

• Perceived lack of trust: Proposing a prenup may be seen as a lack of trust or commitment between partners, which can be a sensitive issue for many Filipinos.
• Economic inequalities: A prenup may perpetuate or exacerbate economic inequalities between spouses, especially if one has significantly more assets or income than the other. It may also trigger insecurities in the spouse who earns less.
• Limited scope: Prenups may not cover all matters, such as child support and visitation rights, governed by separate legal provisions under Philippine law.
• Cultural acceptance: Prenups are less widely accepted in the Philippines than in Western countries, and the concept is still gaining acceptance.
• Legal and registration costs: There are costs associated with notarization, registration, and lawyer’s fees for drafting a prenuptial agreement.
• Complexity for expats with a Filipino spouse: If one spouse is a foreigner or has foreign assets involved, the prenup may require coordination with laws from other countries, adding complexity to the process.

Before considering a prenuptial agreement, the couple should discuss both pros and cons openly. Besides, for an agreement to be legally binding, it must be mutually agreed by both of them.

It’s also important to ask for legal advice before signing the dotted lines.

How do you approach a prenuptial agreement?

Sensitivity, open communication, and sound legal guidance are crucial when approaching a prenuptial agreement in the Philippines.

Bringing it up in the wrong place and time can harm your partner’s feelings and could backfire when not discussed early on in the relationship.

Here’s how to approach the topic:

1. Start early: It’s crucial to bring up the idea of a prenuptial agreement well before the wedding—ideally 3 to 6 months in advance or even more than that. This allows time for both partners to process the idea emotionally and to negotiate the terms without the pressure of impending nuptials.
2. Communicate openly: Honesty and empathy are key when discussing a prenup. Explain that it’s a precautionary measure and a way to start conversations about finances, often leading cause of marital strife.
3. Focus on mutual benefits: Emphasize that a prenup is not just for protecting the wealthier partner but can also provide security and clarity for both parties. It can outline what happens with debts, assets, property, businesses, and expected inheritances.
4. Be sensitive to timing: Choose a relaxed time to discuss the prenup — a time when your partner is comfortable and open to a serious conversation.

When to consult a legal professional?

• Early in the process: Engage a lawyer early on to understand your legal rights and responsibilities and to draft an agreement that is fair and enforceable.
• For independent advice: Each partner should have their own legal counsel to ensure their interests are represented and to avoid conflicts of interest.
• Before signing: Legal advice is crucial before signing the prenup to ensure it meets legal standards and will hold up in court if necessary.

What should be included in a Filipino prenuptial agreement?

1. Compliance with local laws: The agreement must be within the limits provided by the Family Code of the Philippines.
2. Property relations: Couples can choose between regimes like the Conjugal Partnership of Gains or the Separation of Property, which dictate how assets and income are managed during the marriage and divided upon its dissolution.
3. Voluntary agreement: Both parties must enter into the prenup voluntarily, and it should be in writing, notarized, and recorded in the Registry of Property and the local civil registry to be effective and enforceable.
4. Choice of law: The agreement may stipulate which law will govern property relations, especially if one spouse is not a Filipino citizen or if there is property outside the Philippines.

As you can see, having a prenuptial agreement isn’t just about signing the papers. It requires several facets to ensure that the couples are emotionally, financially, and mentally ready should they consider doing this for the sake of protecting their assets.

Examples of Filipino celebrity couples who had a prenup agreement

Some Filipino celebrity couples who have acknowledged having a prenuptial agreement include:

• Ai Ai Delas Alas and Gerald Sibayan: The couple, who faced scrutiny due to their age difference, signed a prenuptial agreement before their marriage in December 2017.
• Vicki Belo and Hayden Kho: Despite both being successful doctors, they chose to have a prenuptial agreement when they married in September 2017.
• Heart Evangelista and Chiz Escudero: Their prenuptial agreement was initiated by the late Senator Miriam Defensor-Santiago, who was close to both of them. It stipulates that properties acquired during their marriage would not be shared.
• Hidilyn Diaz and Julius Naranjo: Before their wedding in July 2022, Julius offered to sign a prenuptial agreement with the Olympic gold medalist, Hidilyn Diaz.
• Ellen Adarna and Derek Ramsay: Both coming from wealthy families, there was curiosity about whether they had a prenuptial agreement. Ellen Adarna addressed the question by implying that they understood that neither would be at a loss in their arrangement.

These examples show that prenuptial agreements are not uncommon among Filipino celebrities, who often have considerable assets and public profiles to consider when entering into marriage.

Having a prenup for these celebrities isn’t for the protection of assets. Most of them have other reasons.

Ai Ai Delas, for instance, due to the 29-year gap in his spouse’s age said that the prenup was actually for Gerald’s peace of mind and to protect him from bashers—most of whom said that he only married the actress because of money.

For coach Julius who married our Olympic gold medalist Hidilyn Diaz, was the one who initiated the prenup, and he mentioned in one of his interviews in a vlog with Karen Davila that “What’s hers is hers, what’s mine is hers.”

Is it really necessary to have a prenuptial agreement?

The necessity of a prenuptial agreement (prenup) is a taboo topic, especially when viewed through the lens of marriage as a union of two individuals in Filipino culture.

This perspective emphasizes the oneness and partnership inherent in marriage, suggesting that everything in the relationship, including financial matters, should be shared and managed together. But acknowledging the practical aspects of marriage and the complexities of modern life, there are situations where a prenup might be beneficial or even necessary.

Understanding the Philippine laws regarding prenuptial agreements and seeking professional guidance can help ensure that both parties are protected and their rights are preserved.

What do you think of a prenuptial agreement? Is this something worth pursuing before you say “I do?”