Prenuptial agreements are very rare in Malaysia and almost nobody adopts them. Therefore, prenuptial agreements, or prenups as they are commonly called in the west, is a big mystery. Here we attempt to answer some common questions so that members of the public are more aware of this term.

What is a prenuptial agreement?

A prenup is a contract that is undertaken by two people before they enter into a marriage. The agreement includes what will happen in the event of a divorce or marriage breakup between the two people involved in the contract. It specifies things like division of property, spousal and children's maintenance and guardianship of their mutual children.

If you and your spouse deciding to buy a house together, be sure to specify what happens to the house in your prenup.

Here are the other things you should know when buying a house with your partner:

1. Credit scores

- Married couples are generally viewed by creditors as a single unit, but unmarried couples are assessed as individuals, even if applying for the loan together.

2. Opening a Joint Account

- Joint accounts be used to pay the mortgage, property taxes, insurance, and maintenance fees easily by either one of the spouses
- Home expenses can also be easily paid by automatically deducting from the account each month

3. Deciding How to Manage Costs

- Only buy a home with a loan that you can settle with one income, either you or your spouse. Meaning that the monthly repayment cannot exceed one third of either you or your spouse's income.
- That way, the other spouse can use their income to over any unplanned or emergency expenditures

4. Put Your Agreement in Writing

- Contact a real estate lawyer to prepare a written document, such as a prenuptial, property, partnership, or cohabitation agreement
- What percentage of the home equity each partner is entitled to, especially if you contributed different sums to the down payment or mortgage balance, and what will happen to the property if you split up.

5. Title Options

- There are three options available for who becomes the title holder: One person can hold the title as sole owner, both of you can hold title as “joint tenants,” or you can share the title as “tenants in common”
- Sole owner: both parties agree to putting the property in only one partner’s name and leaving the other partner without equity in his own investment (separate written contracts are needed if you choose this option)
- Tenants in common: each owns a specified percentage of the property, if one partner dies, ownership will not automatically transfer to the other homeowner unless that person is named in the will.
- Joint tenants: equal owners, if one of the owners were to die, the other would automatically inherit the other’s stake and own the entire property