We all know that marriage is the legally or formally recognised union of two people as partners in a personal relationship, and we hope that this would be “for better or for worse”. However, in reality, couples argue and sometimes even drift apart.
Having been involved legally in various family issues, especially during and following the COVID period, I have seen many arguments revolve around the issue of money or financial instability.
Why Is Financial Transparency Important?
I believe that there should be some financial transparency between the couple so as to ensure a number of issues are understood by both parties:
- Prior to the marriage – An understanding of each party’s finances, assets and debts, not with the intention of having an automatic entitlement to the other’s wealth, but to ensure that individual finances are properly managed. This can lead to constructive negotiations which may be documented in the form of a Pre-nuptial Agreement or Post-nuptial Agreement which the parties may wish to enter into.
- During the marriage – In the unfortunate event of a spouse falling ill, becoming incapacitated or dying, the other spouse should be appropriately able to deal with any issues. This would not only include having access to money but also important documents such as insurance, medical or life policies.
- During any separation or divorce – To ensure that any legal entitlements are properly considered and fulfilled.
Financial transparency does not mean that one spouse automatically becomes entitled to the other’s assets. Rather, it allows both parties to understand their financial position and make informed decisions about their finances and future together.
Financial Issues and Marital Difficulties
The Papers in the UAE have often reported that divorce is an increasing social concern in the UAE. I illustrate below how one of the causes in the reasons given for the high rate of divorce could be finance-related, and may well include other factors:
- Marital infidelity – The spouse engaging in the affair may be spending family money.
- Poor communication – Outside distractions, i.e. hobbies and social events, cost money and can distract one from issues at home, leading to poor communication between the couple.
- Job loss – The loss of an income is always a financial strain, especially if that income is supporting the family.
- Other financial strains – Increasing expenses in line with inflation can cause hardship to the family purse.
- Social media – Curiosity and peer pressure to keep up appearances, attend the new venue or fit in with the crowd can often lead to one living outside of their means.
- Ease of available loans – This can add to the already increasing debt that may build when a tight hand or sharp eye is not kept on your finances.
- Cultural differences – Different attitudes towards how to spend or save money can cause differences of opinion when it comes to finances.
Financial Considerations for Couples
In light of my daily interaction with aggrieved clients, I see a trend in matters that arise and list some of them below for you to consider:
- Traditional stereotypical views of the man being the breadwinner and the woman staying at home should be put aside, especially in this day and age of equality, both on the home front and on a professional level.
- As far as possible, there should be transparency in aspects of the family finances, including assets, income, outgoings and debts.
- Each party should make their own arrangements to ensure they have access to money, i.e. having their own bank account.
- When acquiring a large asset such as a family home, you should try and ensure that it is registered in joint names to prevent one party being at an unfair advantage in the unfortunate event of divorce. In the UAE, an asset registered in one person’s name is generally their sole asset. As there is no concept of beneficial interest in the UAE in the same way as in some other jurisdictions, depending on any financial contribution made by the non-named party, they may not have a claim in respect of that asset.
Pre-nuptial and Post-nuptial Agreements
In line with the above, throughout my career I have seen an increased interest and desire to enter into Pre-nuptial or Post-nuptial Agreements, and I would certainly advise couples to consider entering into such contracts.
Although there will be an initial expense in having the document legally drafted by a family lawyer, the costs would be minimal compared to the legal fees for going through a contested divorce in any jurisdiction.
A carefully considered agreement can set out the parties’ intentions regarding their finances, assets and liabilities and may help to reduce uncertainty and disputes if the marriage later breaks down.
Why Consider a Pre-nuptial Agreement?
A Pre-nuptial Agreement can allow couples to discuss and agree their financial arrangements before entering into marriage. Depending on the circumstances, it may address matters such as premarital assets, property, business interests, debts and other financial responsibilities.
A Post-nuptial Agreement can serve a similar purpose for couples who are already married and wish to formally record their financial arrangements.
The appropriateness and enforceability of any such agreement will depend on the circumstances of the couple and the jurisdictions involved. It is therefore important to obtain specific legal advice before entering into an agreement.
Get Legal Advice
For specific advice on any of the issues above, please contact Dee Popat or our Family Department.
If you are considering a Pre-nuptial or Post-nuptial Agreement, or require advice about financial matters during marriage or divorce, our Family Law team can provide advice based on your individual circumstances.
Please also see the links to the Podcast by FintasticFemales:
https://podcasts.apple.com/ae/podcast/fintastic-females/id1644709252?i=1000600080731
