Divorce is most often a sad and unfortunate event in one’s life. So it’s often difficult for spouses-to-be to imagine even before their wedding day that their marriage might end in divorce. Nevertheless, many couples choose to enter into a premarital, or prenuptial, agreement. Without one, the couple is in effect agreeing to the default rules provided by the marriage and property laws. These default rules can work fine for many couples, but sometimes modifications are a sensible idea.
Premarital agreements exist in a gray area of Cambodian law. They are neither specifically recognized nor specifically prohibited. Should it come to a divorce proceeding, a court would be more likely to follow the terms of a premarital agreement if it was entered into freely and fairly, and the financial terms are fair to both spouses, given their respective finances.
Despite this uncertainty, a premarital agreement may still be of value to a couple for a variety of reasons:
- It can serve to manage expectations. Particularly where one spouse has – or is perceived to have – much greater assets than the other, both spouses could be entering into marriage with unrealistic expectations
- Spouses can protect or share their assets through identification of separate and joint assets.
- It can define alimony or child support payments in case of divorce, as well as any support payments to a spouse’s family during the marriage.
- It can help to simplify the process of divorce, should it occur.
Furthermore, it can be very helpful for each spouse to list their separate assets at the time of marriage. Cambodia has a joint property system for marital property, similar to that of many countries. Any income and property earned during the marriage is considered joint property, whereas everything earned prior to marriage or through gift or inheritance, is the spouse’s separate property. A pre-marital agreement can therefore also be a useful tool whereby each party acknowledges the status of their assets at the time of the marriage.
One important implication of this rules is that any property obtained during marriage with separate property will remain separate property. So for instance, if a spouse uses money in a bank account earned prior to marriage to buy a house during marriage, the house will remain separate property. Likewise, the interests and profits from separate property remain separate.
Should the couple eventually divorce, the premarital agreement can serve as a foundation on which to negotiate. While there is a chance the premarital agreement may not be enforced, it could still serve as a common basis for reconciliation and the division of assets.