Problems With Prenuptial Agreements
A prenuptial agreement---also called an antenuptial agreement---is a contract two people enter into in anticipation of marriage. The contract can set out terms for aspects of the couple's marriage but is more often used to specify asset division in the event of divorce and agreement as to the terms of property allocation in wills. Problems arise in enforcing prenuptial agreements if those agreements were improperly executed or if a court finds them unconscionable.
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Prenuptials and Prior Marriages
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Prenuptial agreements were once the province of the rich and famous, but today they are quite common as many people marry later in life or engage in a number of sequential marriages. When two people with children from prior relationships marry without a prenuptial agreement, it is likely that when one of those persons dies, all his assets transfer to his spouse. Upon her death, all the assets go to her progeny, meaning his children from prior relationships may be entirely cut out of receiving their father's assets, from cash to cherished family heirlooms. A prenuptial agreement can ensure that each person's assets will pass to their own children and heirs.
Prenuptials and Divorce
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According to DivorceRate.org, about 40 percent of all first marriages and significantly more than 50 percent of all subsequent marriages in the United States end in divorce. A prenuptial agreement recognizes the reality that divorce is a likely eventuality, and sets out agreements as to property division on divorce. In days past, when women were not legally able to own much property, these provisions ensured that the wife would have ample material support if the husband left her. Today, men and women often enter marriages with personal assets like real estate and retirement funds, which they want to ensure they will take with them if the marriage dissolves.
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Execution Problems
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Prenuptial agreements may be declared void by a court if they were not executed properly. Each state's laws differ, but most require a prenuptial agreement to be in writing and executed with certain formalities, such as having witnesses to the signatures or having the signing notarized. Failure to strictly follow the applicable state law regarding execution can result in a court's disregarding the prenuptial agreement in a divorce or in administering an estate.
Voluntariness
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Like all contracts, a prenuptial agreement must include a voluntary meeting of the minds to be considered valid. Courts look carefully at whether either party was unduly pressured to sign a prenuptial agreement. Having one attorney handle the agreement, particularly if that attorney was previously associated with one of the parties, can be seen as a sign of improper influence on the other party. Unless the agreement is clearly of mutual benefit and entered into by two people of relatively equal education and socio-economic status, ensuring that each person has his or her own attorney review and explain the agreement helps avoid having the contract declared invalid as involuntary.
Unconscionability
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Courts will invalidate prenuptial agreements if they are deemed unconscionable under state case law. Courts may hold prenuptial agreements invalid if they require illegal or demeaning actions by one of the parties, or if they would leave one of the parties, or children of the relationship, without at least a basic level of support after divorce or death. Couples can not wholly circumvent the terms of state child support and welfare laws by means of a prenuptial agreement.
Disclosure
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A prenuptial agreement may be declared invalid if one or both of the parties did not fully and fairly disclose all their assets, debts or relevant personal information such as existence of children by a prior marriage. Although most state's laws do not require a particular financial disclosure form to be completed as part of a prenuptial agreement, hiding a relevant factor from the other party to the agreement is perceived by courts as a sign of bad faith, nullifying the contract.
Amending Prenuptials
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Prenuptial agreements are entered into prior to marriage, and states' laws vary on whether or not, and how, such agreements may be amended or revoked after marriage. Significant life changes often make such amendments necessary, such as the birth of an unexpected child or a serious medical issue arising with one of the parties. Some states allow amendments to the prenuptial agreement if they are executed in the same fashion as the original agreement; other states require the parties to go to family court for a declaratory judgment approving the amendment.
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- Photo Credit Cindy Hill
