Prenuptial agreements, commonly referred to as “prenups,” have become increasingly popular among couples looking to safeguard their assets and establish clear expectations for each other in the event of divorce or death. While prenups offer a sense of security, it is important to understand that there are situations where they may not hold up in court.
In this article, we will delve into four scenarios where prenups may be invalidated by the court. By understanding these circumstances, you can make informed decisions about whether a prenup is right for you and what steps you can take to ensure its validity.
Situation 1: Lack of Proper Disclosures
Financial disclosure is incredibly important. Virtually all states require some level of financial disclosure in a prenup. Financial disclosure is the sharing of finances with your spouse during the prenup-making process. This is important because it allows the other spouse to see what they may or may not be waiving their rights to. In other words, both spouses need to understand their partner’s financial landscape in order to make educated financial decisions in the prenup.
When a prenup gets thrown out because of a lack of proper disclosures, it’s typically because one spouse did not fully disclose everything. Maybe they left out some debt or a certain bank account. This is a big no-no in most states and can leave you with no prenup at all.
Expert California Family Law Attorney Raymond Hekmat explained to us that if either party did not fully and accurately disclose all of their assets or income, it could be grounds to set the agreement aside. For example, if someone did not disclose equity interest that would be accrued during their marriage from employment, or if specific types of assets in a brokerage account were not properly disclosed (by producing actual statements), then the disclosures would be improper.
Expert Michigan Family Law Attorney Max Emmer also explained, “Failure to effectuate complete, accurate, and detailed financial disclosures is a surefire way to thrust the future validity and enforcement of your pre-nuptial agreement into jeopardy. Absent these, strong arguments and/or inferences can be made that at least one party did not enter the agreement fully aware, informed, and armed with the requisite facts and information.”
Situation 2: Unconscionable Agreements
Another reason prenups may not hold up in court is if they are deemed to be “unconscionable” or unfairly one-sided. A prenup that gives one spouse almost everything and leaves the other with next to nothing is unlikely to be upheld by the court. In other words, if your prenup leaves one spouse destitute and possibly needing public assistance, it’s likely to be declared unconscionable and unenforceable.
This isn’t the only way to find a prenup unconscionable, though. What is considered fair or unfair (i.e., unconscionable) can vary slightly from state to state. This is why it’s important to receive expert legal advice, such as via HelloPrenup or a lawyer, when drafting your prenup.
Let’s look at an example of unconscionability in California. We spoke with expert California Family Law Attorney Raymond Hekmat on this issue of unconscionable agreements.
He explained that “since spousal support limitations/waivers are measured at the time of enforcement in a California divorce, a court may find that the support limitations/waivers may leave one party destitute and not able to support themselves post-marriage, which would result in an unconscionable agreement.”
What about unconscionability (or sometimes referred to as overreaching) in New York? We reached out to expert New York Family Law Attorney Lisa Zeiderman on unconscionability in New York. She explained that unconscionability is “the inequality of a prenup being so strong that it literally shocks the conscious and confounds anyone of common sense having entered into the prenup.”
Situation 3: Not following proper procedures
There are specific procedures that one must follow when creating a prenup. These procedures are laid out by the state. For example, what is a proper procedure in New York, may not be a proper procedure in California.
Generally, most states require similar procedures, such as signatures, notarization, witnesses, voluntariness when signing the prenup, and conscionability (which we discussed in the section above). However, states can vary slightly in their requirements and can even have unique procedures.
One thing most states have in common is making sure prenups are signed voluntarily. Voluntarily means not under some type of force, such as coercion or duress. If one spouse is forced into signing the prenup under duress, the agreement may not hold up in court. Threatening or pressuring a spouse to sign an agreement that they do not want to sign is not valid consent. If this occurs, the spouse who signed under duress may be able to prove that they were not acting voluntarily. What is generally considered duress may also vary from state to state. For example, some states may be more likely to throw out a prenup that was presented on the day of the wedding and call it duress, whereas another state may not consider that duress.
California is one of those states that has a unique procedure that must be followed when executing a prenup. It’s known as the 7-day rule, which requires seven calendar days between the presentation of the final prenup draft and the signing of the actual prenup.
As for duress, California Family Law 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.
In our discussion with New York Family Law Attorney Lisa Zeiderman, she told us that, in her experience, “the biggest reason why prenups are not held up is defective signature acknowledgments. For example, in the seminal case of Matisoff v. Dobi, a prenuptial agreement must be signed and duly acknowledged in the same form as is required to file a deed in the state of New York. Sometimes, we see improper versions of this acknowledgment where the actual acknowledgment language is not the same as is required to file a deed, or worse yet; someone has simply notarized the document without the proper acknowledgment language. In those cases, the prenup is not enforceable. In the case of Galetta, one party did not have an acknowledgment whereby the notary confirmed the identity of the person executing the document, and the agreement was unenforceable. We see these types of errors frequently, and in fact, when I examine a prenup from someone seeking a divorce, the first thing I look at in reviewing the document is the acknowledgments to be sure that the document is enforceable.”
Situation 4: Conflicting provisions
Conflicting provisions in a prenuptial agreement can create confusion and uncertainty, making it difficult for the spouses and the judges to determine the existing rights and obligations of the couple.
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.
Raymond Hekmat, California Family Law Attorney, gave us an illustration of what this might look like: A conflicting provision would be if the prenup says certain property is separate property (not subject to division in a divorce), but in another section says that the property is also community property (subject to division in a divorce), the court could become confused by the contradiction and possibly throw the whole agreement out.
Don’t be too stressed about these four scenarios; prenups are also often upheld in courts. 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: [email protected]