When Are Prenuptial Agreements Legally Enforceable?
- When Are Prenuptial Agreements Legally Enforceable?
- What about my “prenup”?
- The right agreement
- Guidelines for your agreement
- Premarital Agreement Signed “Involuntarily”
- Premarital Agreement Executed by “Trick” or “Artifice”
- Alimony Ordered Despite Breach of Prenuptial Agreement
- FAQs about Prenuptial Agreements
- What makes a prenuptial agreement unenforceable?
- Under what circumstances would a prenuptial agreement be appropriate?
- How enforceable are prenups?
- Do prenups actually hold up in court?
- What would invalidate a prenup?
- What overrides a prenup?
- What percentage of prenups get thrown out in court?
- Can a prenup be overruled?
- What states don’t recognize prenups?
- Can cheating break a prenup?
- What happens if my husband dies and we have a prenup?
- Does a prenuptial agreement trump a will?
In today’s society, prenuptial agreements get a bad rap. When we hear “pre-nup,” we think “Oh no! Another celebrity marriage is ending.” However, prenuptial agreements, also known as antenuptial agreements, may be a useful way to establish the rights and liabilities upon the termination of a marriage by death or dissolution. Here is a sample prenuptial agreement. A dilemma arises because of the implicit question of distrust which may be aroused by entering into an agreement contingent upon the break-up of the marriage. This dilemma is made even worse when typically, a prenuptial agreement is made at a time in a relationship where a couple is at the happiest and most blissful stage of their relationship, right before the wedding.
Given this dilemma, how does one bring it up without causing your spouse to start questioning the strength of your relationship? Even though it may be difficult to approach the subject it may be very necessary to do so. There are circumstances in which prenuptial agreements are critical, for instance, when the rights of children from a prior marriage are at stake or when there is a vast disparity in the financial resources of parties.
What about my “prenup”?
If you are about to go through a divorce and you and your spouse signed a nuptial agreement (either before your marriage or after), you need to inform your lawyer of that fact immediately. That seems like a rather obvious statement, but I have seen cases where the clients failed to mention to their lawyers that a prenuptial had been signed until well into the divorce litigation. It is critical for your lawyer to have a copy of the prenuptial and any amendments that may later have been made to it as early in the process as possible, in order for the lawyer to be able to properly advise you.
Prenups are generally valid in Alabama if certain requirements are met – these basically have to do with full disclosure of the assets and the availability of independent counsel, absence of duress, etc.
If all of the conditions are met and the prenup is valid, then its terms will usually govern the disposition of the assets and debts and terms of any property settlement and/or alimony.
Custody, child support, visitation, and other issues regarding the best interests of the children are generally not issues that can be addressed in the prenup and thus will have to be resolved through the divorce case (through negotiation, alternative dispute resolution or trial).
In crafting a prenuptial agreement there are certain considerations to keep in mind
The facts and circumstances surrounding the execution of a premarital agreement may compel a court to set it aside. An example of this includes if it was executed days or hours before the wedding after all the wedding and honeymoon plans have been made. The court may construe such circumstances as coercive and later invalidate the prenuptial agreement.
The right agreement
If you want to enter into a prenuptial agreement, the best plan of action would be to diligently disclose all your assets and liabilities as part of any agreement. This would mean attaching a schedule that disclosed all your assets. Florida statutes do not require you to disclose your assets if you enter into this agreement before you get married, but divorce courts will not enforce premarital agreements when there is no financial disclosure.
Guidelines for your agreement
Things to ask yourself: Is the agreement fair and reasonable in consideration of the relevant factors at the time the agreement was executed? Was there full and frank disclosure of all assets, or at least a general approximate knowledge of the extent of the property owner? Was the agreement entered into voluntarily (each party should have independent counsel to help support their considerations and avoid conflict of interest)? A waiver of alimony cannot be modified. A husband cannot be released from his obligation to support his wife as long as the marital relationship exists. Child support usually cannot be waived by either spouse. Make sure it’s a valid agreement: it must be written, signed, and acknowledged before two witnesses.
If you have any concerns about drafting a prenuptial agreement or your prenuptial agreement, please contact a divorce attorney in your area.
Premarital Agreement Signed “Involuntarily”
In Martin v. Martin, the Dallas Court of Appeals ruled that a trial court had erred by granting summary judgment that a marital property agreement was valid. The wife admitted she had signed the agreement, but she said she had signed involuntarily. The court remanded the case to the trial court for further proceedings.
One of the defenses to the validity of a marital property agreement is that “the party did not sign the agreement voluntarily.” Tex. Fam. Code § 4.105. An action is taken “voluntarily” when it “is taken intentionally or by the free exercise of one’s will,” said the court.
This case is notable because of the facts it relied upon to conclude that the wife had signed the agreement involuntarily. In short, the husband told the wife that the agreement was necessary “to protect the family’s assets from possible financial ruin in the event of litigation against the business” and that he had no intention of divorcing her.
The wife’s attorney advised her not to sign the agreement. The husband
constantly threatened that the family would be financially ruined and would have nothing if [the wife] did not sign the agreement. When [the wife] tried to discuss her attorney’s concerns with [the husband], he became outraged and called [wife’s attorney] “incapable,” “unqualified,” and insisted that [the wife] ignore [the attorney’s] advice. [The wife] said that she had no choice but to sign the agreement because her sole concern was the welfare of the family.
Some years later, the husband filed for divorce. On these facts (as fleshed out in the court’s opinion), the Dallas Court of Appeals concluded there was some evidence that the wife signed the agreement involuntarily.
This case appears inconsistent with cases such as Sheshunoff v. Sheshunoff, in which the Austin Court of Appeals held that a husband had voluntarily signed a marital property agreement even though his wife threatened to withdraw her guarantee of his bank loan, which would ruin the husband’s business by causing the bank to call its line of credit if the husband refused to sign; and Nesmith v. Berger, in which the same court upheld a marital property agreement where a husband refused to go on the couple’s honeymoon unless the wife signed the agreement. The Dallas Court cited, but did not distinguish, Sheshunoff; the court neither cited nor distinguished Nesmith.
Premarital Agreement Executed by “Trick” or “Artifice”
Husband and wife executed a premarital agreement four or five hours before the wedding. That, by itself, will not invalidate a premarital agreement. But obtaining a future spouse’s signature by “trick” or “artifice” will invalidate a premarital agreement, said the Dallas Court of Appeals in Moore v. Moore, No. 05-10-00498-CV (Tex. App. – Dallas July 3, 2012, n.p.h.).
The evidence at the parties’ divorce trial included that:
- Husband misrepresented his financial condition to wife.
- Husband falsely claimed he wanted wife to sign a premarital agreement to protect her from “loans, liens, and lawsuits.”
- Husband suggested wife retain her own lawyer at his expense, but vetoed wife’s first two choices as too expensive and directed wife to a lawyer he chose for her.
- Husband prevented wife’s lawyer from reviewing the final premarital agreement by misrepresenting to wife for several days, until just before the wedding, that husband did not have the premarital agreement.
- The premarital agreement falsely stated that husband had given wife full disclosure of the nature, extent and value of husband’s assets.
- Husband falsely represented to wife that wife’s lawyer had approved the premarital agreement and said that it was “okay” for her to sign it.
The husband argued that the wife could not challenge the premarital agreement because the agreement recited that the wife’s attorney had reviewed the agreement, that wife had read and understood the agreement, and that wife was signing the agreement voluntarily.
The Dallas Court rejected this argument. The Court acknowledged that unless prevented by trick or artifice, a person who signs a contract “must be held to have known what words were used in the contract and to have know their meaning, and he must also be held to have known and fully comprehend the legal effect of the contract.” But this rule does not apply to premarital agreements because the Texas Family Code states that a premarital agreement is not enforceable if it is not voluntarily signed. The husband could not prevent the wife from making this showing “by including recitations in the very agreement that she alleges was not voluntarily signed.”
Alimony Ordered Despite Breach of Prenuptial Agreement
Is this a case of eating your cake and having it, too? In Dockery v. Dockery, a wife breached a prenuptial agreement by challenging it but received $25,000 in contractual alimony anyway.
Prior to marriage, the parties signed a prenuptial agreement. The prenuptial agreement stated that the parties’ respective earnings during the marriage would be their respective separate property and that no community property would be created.
The prenuptial agreement “also stated that if the couple remained married for five years, but later divorced, the husband would pay the wife $25,000 in contractual alimony.” The agreement additionally stated that if either party challenged the enforceability of the agreement, that action would constitute a breach of the agreement.
After twelve years of marriage, the wife sued the husband for divorce. In the divorce, the wife took the position that community property existed. That action breached the prenuptial agreement. However, the husband testified that he wanted the trial court to enforce the prenuptial agreement. The trial court enforced the agreement by ruling that no community property existed and that the prenuptial agreement required the husband to pay the wife $25,000 in contractual alimony.
The Tyler Court of Appeals affirmed the trial court’s decision. With citations to cases removed, the Court explained the applicable law:
Generally, in Texas, courts interpret premarital agreements like other written contracts. “Breach of agreement,” or contract, means the failure, without legal excuse, to perform any promise that forms the whole or part of an agreement. It is a fundamental principle of contract law that when one party to a contract commits a material breach, the other party’s performance is excused.However, if the nonbreaching party treats the contract as continuing after the breach, he is deprived of any excuse for terminating his own performance. Thus, when one party materially breaches a contract, the nondefaulting party is forced to elect between two courses of action, i.e., continuing performance or ceasing performance.Treating the contract as continuing after a breach deprives the nondefaulting party of any excuse for terminating its own performance.
Because the husband requested the trial court to enforce the prenuptial agreement, the husband elected to continue performance and therefore waived the breach.
The question remains, what provisions can a family law attorney include in a prenuptial agreement to discourage the opposing party from breaching it?
FAQs about Prenuptial Agreements
What makes a prenuptial agreement unenforceable?
A prenuptial agreement is only legally enforceable if both parties enter into it voluntarily, without any undue influence or pressure. The agreement should be written in clear language that is understandable to both parties and must include all relevant information about both spouses’ assets, debts, and financial statements prior to entering into the marriage. Additionally, each party must have adequate time to consider the terms of the agreement and consult with their own legal counsel. If any of these conditions are not met, the prenuptial agreement may be deemed unenforceable in court.
Under what circumstances would a prenuptial agreement be appropriate?
Prenuptial agreements are most commonly used when one or both partners have significant wealth or assets going into the marriage. Having a prenuptial agreement can provide couples with peace of mind since it establishes a financial framework for how assets and debts will be managed if the marriage ends in divorce. It can also be beneficial for couples who intend to protect heirs from earlier marriages, as well as those entering into blended family situations.
How enforceable are prenups?
Prenuptial agreements are generally enforceable, provided that they meet certain criteria. It must be consistent with state laws and accurately reflect the intentions of both spouses at the time the agreement was signed. Additionally, both parties must have had sufficient time to review the agreement and seek legal advice prior to signing it. Lastly, the agreement must be written in a manner that is clear and understandable to both parties.
Do prenups actually hold up in court?
Generally yes, but there are exceptions. Some judges may decide that the prenup violates public policy, is unconscionable, or does not clearly express the intentions of the parties. In addition, if either party did not receive independent legal advice prior to signing the prenup, or if fraud, coercion, or duress were involved in obtaining the agreement, then a judge may refuse to enforce it.
What would invalidate a prenup?
Failure to adhere to applicable laws, including state laws regarding disclosure and fairness requirements, can cause a prenup to be deemed unenforceable. Additionally, any evidence of fraud, coercion, or duress could invalidate the agreement. If either party has an insufficient understanding of the contents or implications of the agreement due to mental incapacity or lack of knowledge, this could also render it invalid. Lastly, if either party fails to accurately disclose all relevant facts related to their finances prior to signing the prenup, such an omission could make it unenforceable.
What overrides a prenup?
State law would override any provisions in a prenuptial agreement that violate public policy or are found to be unconscionable by a court. Furthermore, any provisions that do not adhere to applicable laws would likely be found invalid by a court. Additionally, if either party had inadequate representation from legal counsel prior to signing, then some portions of the prenup may be subject to challenge in court.
What percentage of prenups get thrown out in court?
This varies depending on many factors such as jurisdiction and the strengths and weaknesses of each party’s case. However, there is disagreement among experts about what percentage of prenuptial agreements end up being disputed in court. Generally speaking though, most prenuptial agreements are legally enforced since couples usually take great care when entering into them.
Can a prenup be overruled?
Yes, under certain circumstances a prenup may be overruled by a court. This could occur if it does not comply with state law regarding disclosure and fairness requirements, or if evidence of fraud, coercion, or duress can be proven. If either party failed to seek sufficient legal advice prior to signing the document and was not adequately informed about its content or implications, this could also result in parts of the prenup being overruled by a court.
What states don’t recognize prenups?
While most states recognize prenuptial agreements and consider them valid contracts under state law, some states do have special restrictions that limit their effectiveness. These states include Arkansas, California, Florida, Louisiana, Montana, Rhode Island, South Carolina, Utah, and Virginia.
Can cheating break a prenup?
No, infidelity does not generally affect the validity or legality of a prenuptial agreement in most jurisdictions. However, depending on the wording of the agreement and other factors such as any changes in lifestyle that occurred as a result of extramarital affairs, a court may consider it relevant when determining matters related to spousal support and property division after a divorce.
What happens if my husband dies and we have a prenup?
The provisions of the prenuptial agreement will remain valid even after death and guide how assets should be distributed in accordance with its terms. However, state law might allow surviving spouses additional rights that might modify or supersede provisions in a prenuptial agreement; for example, some states give surviving spouses dower rights which could modify inheritance rules outlined in a prenuptial agreement. Therefore it is important for couples to review their specific situation with an attorney before entering into a prenuptial agreement.
Does a prenuptial agreement trump a will?
Generally no, as wills are addressed separately from prenuptial agreements and usually take precedence when distributing assets upon death. This applies regardless of whether or not the couple has an existing prenuptial agreement in place at the time of death; thus it is important for couples to ensure that their wills and estate plans are updated regularly to reflect changes in their circumstances throughout life.