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November 23, 2010

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Love, money, marriage and prenups

AS Chinese become more prosperous and divorce rises sharply, there's more concern about holding on to property if happily-ever-after goes bust. Some seek prenuptial agreements, reports Yao Minji.

We're in love, we trust each other, we'll never get divorced - who needs a prenup? It'll just spoil our relationship. That's many Chinese young people's thinking, though maybe not their parents'.

Nevertheless, as people become more affluent and divorce rates rise, an increasing (though still small) number of couples are signing prenuptial agreements on division of property in case of divorce.

Prenuptial agreements in the case of a second marriage can be especially helpful, experts say, as they can ensure that children of the first marriage receive an appropriate inheritance. The scenario of the pretty young gold digger taking an older husband "to the cleaners" would presumably be eliminated.

"I know nobody wants to talk about divorce before marriage - it sounds ridiculous. It's like talking about a funeral at a newborn's birthday. But practically speaking, a prenuptial agreement does save a lot of time and disputes in court," Shanghai divorce lawyer Mike Liang tells Shanghai Daily.

Over eight months, Liang says, he received around 100 inquiries, but only five led to agreements. Still inquiries are increasing.

Prenuptial agreements, not unusual in the West, are legal contracts signed before two people enter civil union, and include details of property division. For many years these legal instruments were considered peculiar by many Chinese. They were considered proof of how cold-blooded and calculating rich people can be - so shrewd they must even consider the possibility of divorce before marriage.

But along with hectic economic development, a large group of ordinary Chinese now own some property - apartments, vehicles, gold, jewelry, stocks, art, antiques and other assets. Now there is property to divide in a settlement, and quite a bit can be acquired before marriage.

A report in October by China's Civil Affairs Ministry states that 848,000 couples registered for divorce in the first six months of this year, up 9.99 percent over the first half of 2009. This is the seventh consecutive year that the number of divorces has increased significantly.

It's not surprising, then, that many people worry about securing their property before getting married - they hear all kinds of horror stories about bitter squabbles over property at divorce.

Prenup worries

But many others worry that the materialism and pragmatism represented by a prenuptial accord may harm the necessary bedrock trust in a relationship, suggesting lack of faith and true love. Many who do consider it decide never to raise the issue.

"I have been getting a lot of inquiries from couples who are about to get married, from young to old, about half and half, and increasingly more in the past three years," lawyer Liang said.

He adds that many people come to him as individuals, asking whether they can conduct the required ownership verification of prenuptial property by themselves alone - without telling the future spouse.

Some are relieved to find out that ownership of their apartment, car and other things purchased before marriage does not have to be verified, Liang said. By law, which many don't know, they are not and will not be considered community property and won't change hands in a divorce, without consent.

The Marriage Law of China, revised in 2001, made a major change in the definition of community property in a civil union. In the earlier Marriage Law, prenuptial property become jointly owned community property (liable to a 50-50 split in divorce) after a couple lives together for a certain amount of time: four to six years for real estate and eight to 10 years for movable property.

Now, no matter how long a marriage lasts, property owned before marriage remains in the hands of that party. Ownership of apartments or vehicles need not be verified before marriage, since ownership certificates and deeds can be easily tracked down and dated.

But lawyers strongly recommend pre-marriage verification of ownership of items such as gold, jewelry, art and other valuables as ownership could be disputed. They also recommend that any prenuptial accord spells out the division of business profits generated after marriage.

Specific agreements

Liang also encourages couples who want an agreement to be specific about other issues. One common provision specifies a percentage division of property in case adultery by one party leads to divorce. Some spell out what percentage of income earned by one or both parties after marriage shall be shared, and how much retained by the individual spouse. This avoids unnecessary disputes during marriage, Liang said. Without these specific agreements, income earned after marriage counts as community property, which is divided 50-50 in divorce, by law.

"When it's all written down on paper and agreed to by both parties, there's no need to argue anymore, and the marriage may actually last longer," Liang observed.

Certified psychologist and marriage consultant Wang Jianyi has similar opinions. She says the prenup agreement shows the improved legal awareness of Chinese people, although it is also related to the increasing instability of marriage.

"Most Chinese have very little legal awareness and we often consider talking about property an insult that hurts the relationship," she said. "But now, we are consciously starting to protect our properties, a big improvement in terms of legal awareness.

"The agreement itself is just a legal contract, not related to morality or any other issues, and it's difficult to ascertain whether it can help or harm the marriage, but I hope couples can abandon the old ideas and reach a consensus on the agreement."

Two cases

As Wang said, it's hard to know whether sorting these issues out ahead of time - or raising the issues in the first place - can help or hurt a relationship and future marriage.

Shanghai Daily has found two cases - in one the prenup issue was a deal breaker, a disaster; in another it made the marriage of two elderly sweethearts possible and kept anxious children from forbidding mom or dad to remarry.

Rebecca Liu, a 27-year-old accountant, recently broke up with her 29-year-old boyfriend Jerry Xu as they started discussing the possibility of marriage, after dating for a year and half. The reason was simple: Xu's parents, who bought his apartment and car, insisted on a prenuptial property agreement so he would not lose the property in case of divorce. Xu obeyed his parents decision, saying, "It's their money and I don't have any grounds on which to argue with them about this."

His compliant attitude upset Liu who says an agreement would demonstrate "lack of trust in our relationship, my love for him and even my morality."

They broke up after two months of arguments, neither willing to compromise.

On the other hand, 67-year-old Chen Weimin and his 69-year-old girlfriend surnamed Wang finally got married after living together for two years, thanks to a prenuptial agreement.

Both were widowed around eight years ago. They were introduced to each other through friends three years ago. Chen has five children and Wang has three - every one of them opposed the marriage, afraid that they would lose their inheritance of real estate, savings, jewelry and gold.

"We tried many ways to persuade them and they just wouldn't listen. They were okay for us to live together and look after each other, but they completely opposed our marriage," Chen tells Shanghai Daily.

A friend of Wang's eldest son suggested they consult a lawyer who told them about a prenuptial agreement that "miraculously persuaded all of the eight children," according to Chen.

The couple got married the next day.


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