In rare circumstances, prenups can be thrown out if not done properly. Here are 4 main reasons why even the best-written prenup might not hold up in court:
- Hidden assets: Didn’t disclose all your money and debt upfront? The whole agreement could be invalid.
- Unfair terms: Did you leave your future spouse with nothing? A judge may toss it out (depending on your state laws and situation).
- Not following state protocol: Each state has rules – mess them up, and your prenup is just a piece of paper.
- Conflicting provisions: If provisions conflict within the prenup or don’t make sense, the entire prenup is at risk of being thrown out.
By understanding these potential pitfalls, you can make better decisions about whether a prenup is right for you and take steps to increase its chances of being upheld. Let’s discuss the four main reasons prenups don’t hold up in court, according to experts:
Reason 1: Lack of proper financial disclosures (i.e., hidden assets)
Nearly every state requires some form of financial disclosure when drafting a prenuptial agreement. This process involves both spouses openly sharing their assets, debts, and income with one another. Here’s why it’s so important:
- Informed Decision-Making: Full disclosure gives each partner a clear picture of their spouse’s financial situation, allowing them to make educated decisions about what they might keep separate or agree to share during the marriage.
- Protection from ‘Hidden’ Assets/Debts: Leaving out financial information is a major red flag. A lack of transparency could lead to disputes and potentially invalidate the entire prenup later on.
What Happens if Disclosure is Incomplete?
Judges are serious about enforcing financial disclosure rules. Here’s what could happen if assets or debts aren’t revealed:
- Challenging the Prenup: Your spouse might successfully claim they couldn’t make a fair agreement without full knowledge, leading the court to toss out the prenup.
- State-Specific Consequences: Laws vary, but you could end up forfeiting more than you bargained for in the event of a divorce.
Expert Insights on Lack of Financial Disclosure:
- California: Attorney Raymond Hekmat highlights instances like undisclosed stock options or hidden investments as major grounds for invalidating a prenup in California.
- Michigan: Prenup expert and Attorney Max Emmer emphasizes the importance of complete and accurate disclosure, stating that omissions of any assets can undermine the very purpose of a prenuptial agreement and get it tossed out!
Reason 2: Unfair terms
A prenuptial agreement can be invalidated if it’s deemed “unconscionable.” This means the terms or the circumstances surrounding the agreement are extremely unfair, potentially leaving one spouse without enough resources to support themselves. Keep in mind that each state has its own laws on what it considers unconscionable.
What Does Unconscionable Look Like (Generally)?
- Extreme Financial Disparity: A prenup that gives almost everything to one spouse while leaving the other nearly penniless is likely to be challenged.
- Necessitating Public Assistance: If the prenup creates a situation where one spouse might need government support after divorce, the court would likely find it unconscionable.
- State-Specific Variations: While the core idea of fairness applies, exact definitions of “unconscionable” differ slightly by state.
Expert Insights:
Let’s take a look at what the prenup experts on the West Coast and the East Coast say about prenup unconscionability:
- California: For example, California Attorney Raymond Hekmat explains that spousal support limits might be considered unconscionable if they leave one person unable to support themselves post-divorce. As another example, in a landmark California case (In re Marriage of Facter, 212 Cal. App. 4th 967), a highly-paid attorney’s prenup was thrown out because it left his unemployed wife, who had been a single mother when they met, with virtually nothing after divorce.
- New York: In New York, Prenup Attorney Lisa Zeiderman defines unconscionability as “the inequality of a prenup being so strong that it literally shocks the conscience and confounds anyone of common sense having entered into the prenup.” This means that it’s not just your average unfair term. It has to actually “shock the conscience” of the New York court to be thrown out as unconscionable.
Key Takeaway: Prenups aren’t a license for one-sided agreements. Courts exist to protect spouses from potentially exploitative terms. If you’re concerned about fairness, always consult with legal professionals in your state.
Reason 3: Not following state proper procedures
Every state has its own procedures for creating a valid prenup. What works in New York might not fly in California! Here’s the breakdown:
- Common Requirements: Most states insist on basics like signatures, notarization, witnesses, and a voluntary agreement (both spouses sign voluntarily, without duress or coercion).
- State Variations: Even with the above, subtle differences exist between states. For instance, only a handful of states actually require notarization and witnesses.
- What is “Voluntary”? A prenup signed under pressure (duress) may be invalid. This can include threats, manipulation, or even presenting the prenup right before the wedding (in certain limited situations). State laws on this topic vary. Attorney Raymond Hekmat explained that duress may be something like an immigration issue (getting immigration status after getting married) or forcing someone to sign a prenup in order to get marriage benefits.
Examples of Unique State Prenup Requirements:
-
California’s “7-Day Rule”: California mandates a 7-day waiting period between receiving the final prenup draft and signing. This means that you cannot just draft up a prenup the day before your wedding in California. You need (at a bare minimum) 7 calendar days (and most attorneys actually add on an extra day for an added layer of protection).
-
New York’s Focus on Notarization: Prenup expert and Attorney, Lisa Zeiderman, told us that, in her experience, the most common reason why prenups are not held up in New York is defective signature acknowledgments. In New York, a prenup must be signed and duly acknowledged in the same form as is required to file a deed in the state of New York. If this is done wrong, the prenup is not enforceable. Lisa further explained that the first thing she looks at when examining a prenup is to make sure the acknowledgment is done properly to ensure the document is enforceable.
Key Takeaway: Don’t assume you know the rules just because you live in a certain state. Each state’s prenup process carries specific requirements, and some even have unique requirements (such as California). Getting proper legal help is essential to avoid costly mistakes.
Reason 4: Conflicting provisions
Conflicting provisions in a prenuptial agreement can create confusion and uncertainty. This can make it difficult for the spouses and the judges to understand how to split up property.
If the agreement contains provisions that are conflicting or can be interpreted in a number of ways, those provisions could be set aside based on the fact that the court does not know how to follow the agreement.
Expert Opinion: CA Prenup Attorney Raymond Hekmat explained that a conflicting provision would be if the prenup says certain property is separate (not subject to division in a divorce) but in another section says that the property is also community (subject to division in a divorce). The court could become confused by the contradiction and possibly throw the whole agreement out.
Real-life celebrity example: Kelsea Ballerini, a famous country singer, had nearly this exact situation happen to her. Apparently, (according to her), her prenup had ambiguous language on alimony terms, which led to an unfavorable outcome for her– she was forced to either pay alimony or give up part of her home that she bought, even though that is not what the language was intended to do.
The bottom line on unenforceable prenups
Don’t be too stressed about these four scenarios; prenups are also often upheld in courts. In fact, getting a prenup tossed is relatively rare, according to prenup expert and Family Law Attorney Raymond Hekmat.
Prenups are a good thing, and courts understand that. Prenups can offer peace of mind to couples by protecting their assets and clarifying expectations.
However, it is important to understand the reality that there are situations where they may not hold up in court. Whether you spend thousands on a high-end attorney or write it yourself, your prenup can be thrown out by a judge. Of course, you can increase your likelihood of upholding your prenup by working with experienced divorce lawyers or prenup platforms like HelloPrenup.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
0 Comments