Congratulations on your upcoming wedding in the Hoosier state! Before jumping into the wedding festivities, there’s important research to do on prenuptial agreements (also called “premarital agreements”).
You clearly know enough about prenups to land you here reading this article. You might even know that it’s important for you and your fiancé to share personal financial information with each other in the actual agreement. This section of a prenup is often called “financial disclosures” and is attached to the contract as an exhibit listing the assets and debts you each want to remain your separate property. Separate property is generally not subject to division upon a divorce.
But how specific do I need to be in these disclosures? And, what if I accidentally don’t include some of my assets in the financial disclosures? Read on to see how Indiana courts might react to this scenario and to explore a recent case where the groom made this exact mistake!
But first, how are assets divided in Indiana in a divorce?
In Indiana divorces, courts divide property under the principle of equitable distribution. This means that property is distributed in a way the court deems just and reasonable, not necessarily equally (50/50). Assets acquired during the marriage are classified as “marital property” and are up for division in a divorce. You might be surprised to learn that assets you own prior to marriage could also be subject to division. Courts consider many factors in making this determination, including the circumstances of the marriage and treatment of assets throughout the marriage. Courts also look closely at the language of a prenup to decipher the intentions of the parties when they signed the agreement. This brings us to the 2025 Indiana Court of Appeals case Harrill v. Harrill.
The 2025 Harrill v. Harrill explained
In Harrill v. Harrill, the Indiana Court of Appeals found that assets not listed as separate property in the prenup could be classified as marital property and distributed in the divorce. The husband, Edward, in this case left out his investment accounts, and the wife, Karen, left her 401(k) and personal bank accounts out of the financial disclosures in their prenup.
The Indiana Court of Appeals referenced the 2004 case of Schmidt v. Schmidt and emphasized that each spouse’s “intent” in the language of the prenup is important and the court will “read all of the provisions as a whole to accept an interpretation that harmonizes the contract’s words and phrases and gives effect to the parties’ intentions as established at the time they entered the contract,” (Schmidt v. Schmidt (2004)). The court elaborated on their process by stating that if an agreement’s terms are “clear and unambiguous, a court must give those terms their clear and ordinary meaning,” (Hold Rd. Holdings, LLC v. Hold Rd., LLC (2015)).
The language in the Harrill’s prenup was clear and unambiguous. In the agreement, the Harrills claimed to have fully disclosed their financials to each other. The language stated that the attached financial exhibit included a “description of the character and fair market value of substantially all of their respective assets.” The court understood these declarations to mean that the parties assumed a duty of full disclosure.
Therefore, the blatant exclusion of certain assets from financial disclosure (which was intended to all be separate property) seemed to be a clear indication that these excluded assets were intended to be included in the marital estate.
Edward’s arguments did not sway the court.
Edward argued that the prenup should hold up, but that the excluded assets should not be deemed marital property. Edward argued that the 2019 case of Perrill v. Perrill held that failure to list accounts in a prenup’s attached financial disclosures did not make the excluded assets marital property. Here, the Appeals Court found that Edward misunderstood the court’s decision in Perrill. The court in Perrill was focused on the issue of the prenup’s validity and held that failure to include a complete list of separate property did not invalidate a prenup. It did not address whether excluded property automatically became marital property. Furthermore, the prenup in Perrill contained a clause clearly stating that inadvertent omissions of property would not affect the agreement’s validity. The Harrill’s prenup did not discuss the effect of inadvertent omissions, but instead claimed that the parties fully disclosed their financials to each other in the attached exhibit.
Treatment of assets during the marriage influences the court’s decision
In addition to appealing the trial court’s decision to include his investment accounts in the marital estate, he appealed their decision that a loan taken out against his Fidelity account was not solely his responsibility. But his Fidelity account was listed as his separate property in the prenup, and despite Edward spending some of the loan funds on marital expenses, he retained sole control over this account and the associated debt throughout the marriage—never giving Karen access. As mentioned above, when interpreting a prenup, the court seeks out the intention of the couple and looks at a party’s treatment of their asset when deciding how it should be classified. Edward’s inclusion of the Fidelity account in his separate property prenup disclosures and his actions towards this account during marriage led the court to classify the Fidelity account, and the debt associated with it, as his separate property.
Karen’s request that the prenup be invalidated was not granted
Karen appealed the trial courts’ decision that the prenup was valid. She wanted the agreement thrown out. Addressing this issue, the Appeals Court upheld the trial court’s findings that Karen entered the prenup voluntarily and without coercion. To have a valid and enforceable prenup, Indiana law requires that it be in writing, signed voluntarily, and not severely unfair (unconscionable) when signed (Indiana Code 31-11-3). Additionally, Indiana case law emphasizes that full and fair disclosure of financial assets, liabilities, and income is a critical component to the enforceability of prenups (Selke v. Selke (1992).
The Indiana Court of Appeals applied Black’s Law Dictionary’s definition of “voluntary” to find that she entered the agreement intentionally and without coercion. Karen had several days to review the contract, her fiancé informed her of her right to consult an attorney, and she even added a clause to the agreement that Edward would pay for her child’s college. The court also took into consideration the fact that Karen was thirty-five years old when she signed the agreement, had already purchased a home, had investment accounts, and had a career that implied she would have understood the financial nature of the prenup.
The question of conscionability
Regarding the issue of whether enforcement of the prenup was unconscionable, the court applied the standard from the 2015 case of Fetters v. Fetters in considering 1) whether both parties had the assistance of independent legal counsel; (2) the economic circumstances of the parties resulting from the agreement; and (3) the conditions under which the agreement was made, including the knowledge of the other party.
The court found that even though Karen chose not to hire a lawyer and that Edward had more financial resources than she did, Karen was not “so poverty-stricken as to demonstrate a gross disparity in bargaining power.” This coupled with the circumstances of the signing and Karen’s ability to understand the agreement, the court found that the contract was not one that “no sensible person, not under delusion, duress or distress would accept,” (Rider v. Rider 1006)
What’s the bottom line here?
If you reach the other side of your wedding day and realize that you or your fiancé didn’t include some of your separate property assets in your prenup’s financial disclosures, remember that Indiana courts will search your prenup’s language to understand what your intent was regarding these assets. If your agreement states that you have both fully disclosed your financials in the attached disclosures…then it’s possible that any assets left out of the attachment will be classified as marital property and divided upon a divorce. Keep in mind that the court will also look at how you and your spouse treated those financial assets or debt during marriage in deciding the most fair and equitable way to divide your property.
Now you fully recognize the importance of including all your assets and debt in the financial disclosures of your prenup. And don’t forget that the words you choose to include in your agreement are equally important. Next up—organize your finances and get to work on that prenup! Your wedding festivities and sharing beautiful Indiana evenings with your future spouse are right around the corner.
Heather Franklin is a compassionate family law attorney with a focus on helping clients navigate complex legal issues during emotionally difficult times. Her practice is dedicated to helping clients with a range of family law matters, including divorce, custody, parenting time and child support, and prenuptial agreements.
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