Enforceability of Prenuptial Agreements

There was a time when prenuptial agreements were treated very cautiously by the courts and it was difficult to enforce them. The courts took the attitude that prenuptial agreements encouraged divorce, and that this was against the public policy of encouraging marriage. Times have changed, and now prenuptial agreements are more common and are normally enforced by courts. Many states even have statutory provisions governing prenuptial agreements. However, there are many circumstances when a prenuptial agreement may not be enforced. These circumstances are as follows:

1. If there was duress or coercion used to get one party to sign the prenuptial agreement. Prenuptial agreements must be signed voluntarily.

2. If the prenuptial agreement is unconscionable. The prenuptial agreement doesn’t need to be “fair” but it also can’t be overly lopsided in favor of one spouse. Unconscionability is examined as of the time of separation, rather than at the time that the agreement is entered into. For instance, if both parties were successful professionals with good incomes at the date that their prenuptial agreement was signed, and their agreement included a waiver of spousal support (a clause stating that no spousal support would be payable in any circumstance), that would likely not be unconscionable then. However, it by the date of separation one party has fallen ill, and is no longer able to work and earn an income, then the spousal support waiver would likely be found unconscionable by a court, even though it was not unconscionable at the date of the prenuptial agreement.

3. If there was no or insufficient financial disclosure. If parties don’t know about each other’s financial situation when they enter into a prenuptial agreement, then the agreement won’t be enforced. Financial disclosure includes information about both partners assets, income, and debts. Usually the financial disclosure that is provided will be documented so that there is proof of this in the future if needed. It is also a good practice to save your financial documents from the date of the prenup, to prove that you told the truth about your financial situati9on. Financial disclosure must be fairly detailed. For instance, it is not enough simply to state that one party owns a business – full financial details of the business must be provided, and perhaps even a business valuation must be done.

4. Lack of understanding. One party can always claim that they did not understand what it was they signed. And this isn’t surprising – prenuptial agreements can be quite complex legal documents. Ensuring that both parties have legal representation before entering into the prenuptial agreement is the best way of dealing with this issue, or at least sign a waiver stating that they do not require legal advice.

5. Time pressure. Starting to negotiate a prenuptial agreement the night before your wedding is, well, far too late. There should be a reasonable amount of time so that issues can be thought about and negotiated, legal representation can be obtained, financial disclosure can be given, and so on. Some states specify a minimum amount of time for the process – often requiring at least 7 days. Realistically, even seven days prior to your wedding is not much time.

6. In writing and signed. Each state has slightly different formalities to ensure that a prenuptial agreement is enforceable. At the very least, this requirement includes that your prenup be in writing, and signed by both parties. Normally, the agreement must also be witnessed, and in some states, the agreement must be notarized to be valid and enforceable.

As well, anything that would make a normal contract unenforceable also applies to prenuptial agreements. So, for instance, if there is fraud involved, a prenuptial agreement will not be enforced.

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