Crucial Steps to Ensure A Fair Prenuptial Agreements
When you decide to get a prenup, here are some crucial steps to make sure that your prenuptial agreement is valid.
Now you do decide to get a prenup, there are a few crucial steps couples should take to ensure your prenups are fair and more importantly, valid:
Talk to your partner, preferably sooner than later
While discussing and drafting a prenuptial agreement can indeed have emotional implications, it is important to recognize that the potential benefits and importance of a prenup often outweigh these temporary discomforts. The key to a successful prenup is timing, and most experts suggest bringing up the topic well before you even get engaged. By starting early, you and your partner will have ample time for multiple discussions, preventing them from feeling forced or rushed into something he or she doesn’t understand or agree with thus easing them to the idea.
If your partner is offended, try likening a prenup to an insurance policy for a catastrophic event. Explain that it is a means of protecting yourselves — and any future children — from the emotional and financial expense of a messy divorce.
At the end of the day, a prenup should be entered voluntarily, without coercion or pressure from either partner.
Both parties should have sufficient time to review the prenup and seek legal advice before signing. The terms of a prenup should be fair and reasonable to both parties and should consider each partner's future needs, such as potential career changes or childcare responsibilities. The prenup should not be so restrictive that it prevents partners from pursuing their goals or leaves them in financial distress.
Collectively decide what to include in your agreement
In Indonesia, the law regarding prenuptial agreement, UU Perkawinan No. 1 Tahun 1974, amended by UU No. 16 Tahun 2019, is relatively fexible on the content of prenups. A common outline typically includes the following:
Introduction
This section provides an introduction and states the purpose of the prenuptial agreement. It may include statements about the couple’s intention to define their financial rights and obligations during the marriage and in the event of a separation or divorce.
Identification of Parties
This section identifies the parties entering into the agreement, including their full legal names and any other necessary identifying information.
Financial Disclosure
In some countries, both parties are legally required to disclose their individual financial information, including assets, liabilities, income, and expenses. While it is not mandatory to do so in Indonesia, it is good to be fully transparent to ensure that both parties have a clear understanding of each other’s financial situation before entering into the agreement.
Asset and Debt Division
This section outlines how assets and debts will be divided specifying which assets are considered separate property and which will be subject to marital property.
Dispute Resolution
Method of dispute resolution in case of conflicts or disagreements related to the prenuptial agreement.
Hire professional help that you can trust
The cost of prenups remains an apparent deterrent to their wider adoption. The easiest way to draft a prenup is to complete all negotiations between the couple and head to a notary office and request a legalized prenup agreement. At their cheapest, prenups in Indonesia cost a couple hundred dollars and can go up to thousands depending on the complexities of the agreement. The figure can spike quickly if the couple has not already agreed on the terms and requires further guidance from the professionals to sort it out. Each party should have their own copy of the prenup and make sure to register the prenup to the Religious Affairs Office (KUA) or Civil Registry Service Office. This part is crucial to ensure that your prenup is valid and acknowledged by the country and third-party creditors.
Prenups are a relatively easy affair but putting together a prenup should not be a task left until the week of the wedding. Prepare at least 30 days before the wedding to complete one because they can take some time as further negotiations between the couple would usually arise.
As things continue to change throughout the couple’s stages of life, it is also important to periodically review and update your prenups as necessary to account for the financial conditions and needs of the couple as they get older.
Now what happens if you are already married?
Fear not, you and your partner can still enter into a postnuptial agreement.
A postnup is an effective way to document intentions for earnings and assets during the marriage as well as in the event of a future divorce. They are especially useful if the couple did not have enough time to finalize a prenup before the wedding, or many years well into a marriage when the couple is aware of issues that might threaten their relationship and want to gain clarity on areas of conflict.
Regardless if it’s a prenup or a postnup, it is important for founders to protect themselves and their spouses even if divorce is not the immediate concern.
For founders, these agreeents serves as a proactive measure to protect the entrepreneur’s business assets, establishes clear guidelines for asset allocation, debt management, and succession planning, ensuring that the business remains secure and unaffected by any potential legal or financial challenges in the future. Whether it is safeguarding the continuity of a startup or protecting a substantial stake in a rapidly growing company, a prenup or a postnup provides entrepreneurs with peace of mind and the assurance that their hard-earned assets are well-protected. And to be fair, protecting your partner from your debt is also romantic in its own way—and certainly an act of love.
Ultimately, the decision to pursue a prenuptial agreement should be based on the specific circumstances and the needs of the individuals involved. So, founders, is prenup the right choice for you?