Global nomads and nomad wanna-bes, listen up. If there is one piece of advice I would give to both those living overseas and those embarking on the fun-filled journey of an overseas posting, here it is – Get Yourself a Post Nuptial Agreement. This is especially true if you are a trailing spouse giving up your career, you are already overseas building significant net worth and/or you have dependent children.
Moving and living overseas has some serious advantages: learning new languages, meeting fellow nomads, lower taxes, FT household help, exciting adventures that you can paper the walls of Facebook with, but inevitably there is stress. And that stress absolutely will reveal fissures that already are forming in a relationship. Small fissures can become gaping holes because of a shift in economic power within a marriage, thus leaving the trailing spouse far more dependent than ever imaginable on the working spouse. In some marriages, those gaping holes can give way to canyon-esque chasms that may be impossible to bridge.
While the male-centric finance industry wants you (and more likely your husband) to focus on investments and estate planning (all well and good), there is nothing that creates an “ambiance” of improved power balance on a day to day basis like a Post Nuptial Agreement or Postnups. In my experience working with expatriates, Postnups are very effective tools in terms of keeping a marriage together and wealth preserved if they are created by fully functioning and informed adults.
How It Works
A Postnup states in black and white what happens in the event of divorce and it covers (but is not limited to): Triggers for a divorce (ie physical abuse, affairs, drug abuse or whatever you deem to be a trigger), division of assets, who takes care of liabilities (loans, taxes etc), alimony and child support, jurisdiction of divorce, your legal status in a country (you will be on a “dependent pass” so what happens to your status in a divorce), child custody arrangements, educational needs, who moves out, who pays the rent and other benefits such as life insurance, health insurance and holiday leave. You can also revisit your Postnup every five years, much the same way it is best practice to review your will every five years.
It is important to understand if a Postnup is enforceable in the jurisdiction you are moving to (Singapore and Hong Kong, yes!). I find them more realistic and effective than Pre-Nuptial Agreements, which are often not enforceable or admissible in court. Most importantly the Postnup is effective in bringing forth an honest discussion and a “laying of the financial cards on the table” before anyone packs up and moves. It is simply easier to come to a reasonable agreement within your current support network, where there is a lack of fear, anger and emotion (all of which go off the charts in divorce). Postnups allow us to engage our inner adult/analyst to discuss what is the best solution for all involved in the event a marriage breaks down while overseas.
Will a Postnup stop an affair – very unlikely. Should it be used to govern every behavior or eccentricity of you or your spouse? Absolutely not. If that’s your worry, you are already married to the wrong person. It is merely a planning document, like a will or a trust, and it will force both you and your spouse to discuss worst case scenarios. Might it give you pause for thought around agreeing to move overseas? Maybe. Moving overseas is not for everyone given that the divorce rate among expatriates is 1.5X higher than among non-expats. There are some things worse than divorce too: getting AIDs from a cheating spouse, being caught in a cycle of physical abuse in a country that lacks shelters, and being trapped in a country due to Hague Convetion rules with no income to live off and so on.
Key Points in Creating a Document
While divorce is hard enough, divorcing overseas can be a small-scale nightmare, though jurisdictions like Singapore are improving the process by mandating mediation and cooling off periods. Every jurisdiction is different though, and the more global you are, the more global your asset base is (or will become).
- Prep Work a.k.a. Know Before You Go
Understand your new legal jurisdiction before you call the movers. Demand answers from the HR department that wants to uproot you. Specifically, what are my legal rights in XYZ country? Is a Postnup enforceable there? Have them do the leg-work and get all the information that you need so that you are fully informed before you even agree to go. Ditto all this on wills, retirement and estate planning.
- The Agreement
The cheapest way to execute this document is to agree on all the terms with your spouse and then have a lawyer draft it. However, if you are financially uninformed seek out legal help (or a financial planner) to help you understand your needs because you cannot agree to things that you do not fully understand. Ideally the advising and drafting lawyer knows the jurisdiction you are moving to and is familiar with local law.
INSIST that the company HR department opening the working spouse’s account in the foreign country opens a joint account. Yes, it’s worth a RT flight to be there for the signing. This way that savings becomes your “joint savings”. Sounds like a no brainer, but almost no HR department takes into consideration the needs of the spouse and the economic control in the family.
As soon as you move, establish credit in your own name. Some times there will be limits, some times it may take a bond ie leaving money on deposit but do it as soon as practicable.
Some men and women will have a hard time getting their spouse to agree to such a completely civilized process for a few normal reasons, namely: discomfort in talking about financial matters at all, superstitions and the fear of divorce. Worry not, this can be resolved through high quality communication and reasoning, or even a bit of third party counseling. It’s not easy for the uninitiated, but it’s doable, and an improved balance of power will emerge that can insure a stronger bond in the long run. In other words, why would anyone who wants to remain in a stable, secure, supportive and loving relationship NOT sign a Postnup if it made their partner feel better, particularly when embarking on an overseas posting.
The less obvious reasons for resistance are that you might be married to someone with a personality disorder. People with personality disorders create and thrive on acute imbalances of power. The question then becomes, why would you go overseas married to someone, particularly if you have dependent children, who would not sign such a reasonable document? For those who are not sure what animal you are dealing with at home, here are some of the more entertaining articles on this subject matter:
Andrea Kennedy will be holding the first of several informational sessions in Singapore for the calendar year 2015-1016. The first session will cover Tips on How to Approach a Post-nuptial Agreement on September 16 at 7 pm with time for questions and a sample Postnup will be distributed. The fee is S$75/person with a maximum limit of 20 people, all accepted on a first-pay basis. If you are interested in attending please send me an email.