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Amid Covid-19 outbreak, prenuptial agreement is perhaps one of the most talked about topics after Microsoft co-founder and former CEO Bill Gates and his wife Melinda Gates announced their divorce after 27 years of marriage. Gates may have achieved success through Microsoft, but the company has only 19.6 per cent of his total assets estimated at about $26.1 billion. Most of his assets are linked to the Bill & Melinda Gates Foundation. Gates is the fourth richest man in the world.
Marriage is not considered as a contract in India
In western countries, the system of prenuptial agreements has been in place for a long time. However, such rules are not yet in practice in India. In India, marriage is not considered as a contract.
According to the Hindu Marriage Act, 1955, such agreement does not hold any legal validity. Even though a contract can be signed under the Indian Contract Act, 1872, the Indian Contract Act also does not recognize such contracts in relation to marriage.
Since Hindu marriage is not a contract in India, prenuptial agreements are not much talked about.
However, as per Muslim and to some extent Christian laws, marriage is seen as a contract.
With rising divorce cases in the country, husband and wife usually end up in a court battle for property related matters and allowances. In such situations, a prenuptial agreement can prove to be effective. If things are decided in advance about the property, there’s a legal document that lists who gets what after the divorce and eliminates the scope of dispute or litigation.
What experts say
Legal experts feel that there is no need for such prenuptial agreements in the Indian system. According to Supreme Court lawyer Shashwat Anand, “The reasons why you make a prenuptial agreement are already in place in the Hindu Marriage Act and there are very clear provisions related to divorce.” Section 12 and section 13 of the Hindu Marriage Act, 1955 have clear provisions regarding divorce.
“Since marriage is a religious issue, there is no provision of prenuptial agreement in the Hindu Marriage Act, but if you want to make this agreement, then you have to resort to the Indian Contract Act, 1872,” says Anand.
What prenuptial agreement should comprise of?
Assets and liabilities
Financial or monetary position of the couple.
List of properties
Details of shared assets
Division of assets
Maintenance allowance
Children’s custody and expenses
Life insurance, medical insurance, other insurance policies.
Individual, joint bank accounts, household expenses and bills
Jewellery and gifts, etc.
A prenuptial agreement may be applicable in following scenarios:
The agreement or contract is clear, voluntary and mutually agreed upon and is a written document.
It should be signed by both the parties and implemented before marriage.
The agreement or contract should not have been signed under pressure or intimidation.
Most importantly, it should be certified and notarized.
What are the benefits?
In such an agreement, both men and women are considered equal. Both parties disclose their financial assets and liabilities before marriage. In such a situation, they can avoid any legal hurdles later. In this, due to clear financial status of man and woman, the chances of discrimination with any party during divorce are reduced.
It clarifies the financial position of both the parties and reduces the chances of any kind of fraud. Even couples who are in a live-in relationship can make a contract and secure their rights, says Anand.