Getting married is one of the most joyous events in people’s lives. Even in the midst of the Coronavirus social restrictions, more than 600,000 Chinese couples said “I do” during the Country’s national day public holiday in 20201


For ultra-high net worth (UHNW) individuals, marriage planning necessarily includes considerations of preserving family wealth and balancing risks with generosity and fairness, especially if multiple generations might be affected. In this issue of PCS Vision, we have interviewed Ms. Rita Ku, a Partner from Withersworldwide in Hong Kong*. In the interview, she has discussed how pre- and post- nuptial agreements can work to safeguard (UHNW) families’ assets – before and after weddings. 


In the case study, PCS by Mercer offers a potential insurance solution in safeguarding generational family capital in the event of a marriage breakdown.

In this issue:

Before the Wedding and Beyond Romance

After the Wedding, when Life Changes: Why postnuptial agreements are crucial in ultra-high net worth (UHNW) lives

Case study on pre-nuptial agreements

Before the Wedding and Beyond Romance


Four things you need to know when drafting successful cross-border prenuptial agreements.


Prenuptial agreements are not about romance. There should be romance aplenty if you are discussing marriage. Prenuptial agreements are about wisdom and foresight on a generational timescale.


To understand the intricacies of drafting successful cross-border prenuptial agreements from a Hong Kong resident’s perspective, we have interviewed Ms. Rita Ku, a partner at Withersworldwide in Hong Kong. Ms. Ku says, “Not only do prenuptial agreements play a crucial role in strategically protecting assets, they are also essential in helping to define the domain of discussion and minimize the length of dispute when the relationship is under maximum strain.


“Further, prenuptial agreements protect the rights of everyone involved – yes, a marriage is between two people, but increasingly, prenuptial agreements involving UHNW individuals have flow on effects. Dynastic wealth, multiple families and family interests can all be impacted. As wealth accumulates across generations, it’s interesting to note, anecdotally, that prenuptial agreements are at times instigated by the parental generation.


According to Ms. Ku, there are four consequential considerations when it comes to effective prenuptials as follows: 

1.       Full financial disclosure, so you can fully protect your assets


Prenuptial agreements are most effective at protecting the assets catalogued in individual agreements. That is, any assets outside the agreement are more vulnerable to dispute and negotiations in the event of a divorce.


While understandably, it is not unusual for people to feel discomfort in fully disclosing the extent of their wealth. If a marriage breaks down, insufficient disclosure of assets can mean lengthy litigation at best, and significant wealth erosion at worst.  


UHNW individuals should view full financial disclosure as an opportunity to protect assets rather than exposing themselves to threats, especially when some (though not all) assets can be very effectively ring-fenced from the financial agreements of a marriage.


2.       Geography dictates whether your prenuptial agreement is binding or merely persuasive


Your prenuptial agreement needs to reflect your global lifestyle, because prenuptial agreements are enforced in the forum in which you spend the majority of your married life, rather than where the marriage is registered.


Jurisdictional differences can produce stark differences in the outcomes of the same prenuptial agreement. In China for example, prenuptial agreements are binding as long as they formally comply with all legal requirements, while in Hong Kong, prenuptial agreements are regarded by courts as persuasive. In some countries, differing state laws can also produce a vast array of outcomes. As such, each case must be reviewed on a case-by-case basis and advised by legal experts from respective jurisdiction.

Internationally connected people need to consult expert lawyers in every jurisdiction in which they are likely to spend significant time. The lawyers can then collaborate and produce an agreement that is reflective of your lifestyle.

In the process of drafting the agreement, the potential tax implications of divorce proceedings in different jurisdictions should be equally seriously considered and regional tax experts need to be consulted.


3.       “Illegitimate pressure” when signing a prenuptial agreement can lead to successful challenges in the future


These are some general rules apply when it comes to the signing prenuptial agreements:


  • Prenuptial agreements should not be signed in times of exceptional pressure, such as during a pregnancy
  • The agreement is entered into by both parties freely and knowingly; both must understand the agreement fully and agree to it voluntarily
  • The prenuptial is signed a minimum of four to six weeks days before the marriage to avoid claims of rush or pressure
  • Each individual should have the agreement confirmed by their solicitor to be as fair and just as it can possibly be


4.       Separate, independent legal advice


Whilst the fees might be paid by the financially stronger party, each individual should have their own independent legal advice to avoid potential conflicts of interest.


And after the wedding? Ms. Ku strongly recommends regular reviews by way of postnuptial agreements, especially when there are significant changes. Change of circumstances, such as significant inheritance, the arrival of children and unusual distribution from trusts should prompt a review. Ms. Ku explores postnuptial agreements in the next article.




* Ms. Ku is a partner in Withersworldwide based in Hong Kong.


This interview note is general in nature based on Hong Kong law only and not in any way intended as legal advice. 

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After the Wedding, when Life Changes: Why postnuptial agreements are crucial in ultra-high net worth (UHNW) lives


Ms. Rita Ku* continued to discuss about –


After the Wedding, when Life Changes: Why postnuptial agreements are crucial in ultra-high net worth (UHNW) lives


Other than timing, a postnuptial agreement is just like a prenuptial agreement in that the partners enter into a formal arrangement to fairly distribute their assets and interests in the event of a marriage breakdown^. Unlike the one-time nature of prenuptial agreements however, postnuptial agreements can be regularly assessed and updated at any time during the marriage.


To gain a more general understanding of postnuptial agreements, we spoke with Rita Ku, family law Partner from Withers worldwide in Hong Kong.*


According to Ms. Ku, there should be regular reviews of postnuptial agreements. Ms. Ku says, “A misconception surrounding prenuptial agreements is that they are sufficient for the totality of a marriage, whether the union lasts three or 43 years. Yet, no prenuptial agreement, however detailed, could pre-empt and accommodate all the possible changes in the life of a family on a timescale of decades.


“When viewed in that light, it would seem crucial for UHNW individuals to have postnuptial agreements that reflect the enormous variations in a marriage that can and do occur. Reviews are particularly important when there is a substantial change of circumstances, such as the birth of children and when one spouse receives substantial gifts or inheritance.


“Our experience is that while changes don’t necessary occur every time a postnuptial agreement is reviewed, the process produces positive outcomes.


“Regularly assessing postnuptial agreements assists couples in having constructive discussions and resolve disagreements in their marriage over issues such as finances, assets, children, etc. Reviews help them understand the changes in their financial position, and importantly, the ramifications of those changes.


“Another reason for regular reviews is to minimize potential court time should a marriage dissolve,” says Ms. Ku. She explains, “Court time is generally reduced for up-to-date agreements because they better reflect actual circumstances and are therefore more readily enforceable.


“Reviews also increase enforceability because each time the process ends in accord, the individuals involved demonstrate their continued commitment to the agreement while having had multiple, regular, opportunities to carefully consider their positions. “


Ms. Ku highlights that some lives are more complex than others and priorities change as children grow. She says, “In instances of second, third and subsequent marriages and multiple children with different spouses, a sequence of postnuptial agreements become vital for UHNW individuals in dealing strategically with that complexity.”




^ For a general overview of cross-border prenuptial agreements, please see Before the Wedding and Beyond Romance


* Ms. Ku is a Partner in Withersworldwide based in Hong Kong.


This interview note is general in nature based on Hong Kong law only and not in any way intended as legal advice.

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Case study: Solutions to safeguard a global family fortune


An ultra-high net worth individual (UHNWI), single and the 3rd generation heir of an extraordinary global family fortune, was looking for a future-orientated solution that includes pre-nuptial agreement considerations. A solution that would simultaneously, cohesively and comprehensively:


  • Preserve the family’s wealth for future generations
  • Provide generously for his future wife and children while significantly reducing the risks of any future litigation
  • Make provisions for future inheritors’ estate duties
  • Give him ongoing flexibility to make business and wider financial decisions in the short- to medium- term


Legal solution

Upon reviewing the client’s rights, exposures and strong preference for fairness to his future spouse, Rita Ku* from Withersworldwide recommended a pre-nuptial agreement within a structure of three specialized trusts:

1.       A trust to ring-fence the assets that will remain with his lineage, preserving the original family wealth


2.       A trust** to accumulate marital assets while providing a generous lifestyle for his future wife and children


(**Note: A trust is only one of numerous options. It is not always a good idea, or indeed, beneficial to set up a trust to hold family wealth. There might be little point in doing so when the couple shares all matrimonial assets. However, if the assets are substantial enough and one would like to protect future generations’ interests, as in this case, this trust option can be considered.)


3.       And a further trust structure^ to give the client unencumbered access to other assets, allowing him the versatility to make financial decisions as required


(^Again, like the above, the advice is specifically for one particular client’s circumstances. Generally, if flexibility is a priority, a trust might not be the best solution.)


Insurance solution


After considering the UHNW individual’s circumstances and needs, the personalized PCS by Mercer solution:  


  • A “Whole of Life” insurance policy with death benefits
  • A single trust is set up by the client
  • The trust acts as both policy holder and beneficiary
  • The trust then distributes to the wife and children according to the client’s wishes
  • Meets tax obligations in the territory of residence – Hong Kong in this instance
  • Solution is practicable irrespective of citizenship
  • Trust distribution can be used to manage estate taxes within the territory of residence


Key takeaways:


1.       Generous payout to the wife and children upon death while safeguarding the client’s family wealth from business risks and/or in the event of marriage breakdown


2.       Lump sum premium with payout ratio increasing from 200% of premium (at the time of policy set up) to 450% at age 90


  * Ms. Ku is an expert in family law and a renowned authority in wealth preservation for UHNW individuals.