Let’s talk about what happens when you have a prenup and you get a divorce. Do you have to file your prenup with the divorce court? Do the judges presiding over your case either accept or reject your prenup? (Hint: the answer to both of these questions is no!). There are major misconceptions and confusion surrounding the enforcement of a prenuptial agreement, so we’re here to clear the air. Keep reading to understand what happens when you want to enforce your prenup should you ever get divorced.
The misconception around prenuptial agreement enforcement
To enforce a prenuptial agreement means a couple is required to abide by the terms of their agreement. In other words, they are “forced” to follow the terms of the contract. There is a major misconception about enforcing a prenup. People are confused about what happens when you get a divorce and you want to “activate” (i.e., enforce) your prenup.
What many engaged couples think happens when you have a prenup and you get a divorce is this: you file for divorce, then you submit your prenup to the court, and then the court looks at your prenup and decides to either accept your prenup or reject it. That’s not how it works in the majority of jurisdictions. You do not need to “file” your prenup somewhere and wait for the court to accept it or reject it during the divorce process to enforce your prenup. In the next section, we will explain how enforcing a prenup actually works, so keep reading.
How do you enforce a prenup, then?
Let’s paint the picture for you. You just filed for divorce. You and your partner had a prenup executed years ago. First off, make sure you still have a signed original of the agreement. That is important. Second – How do you go about enforcing the terms of the prenup? Well, it depends. Do you both still agree to the terms? Or, are you in disagreement over the prenup in some way? Let’s dive into the different ways you can enforce a prenuptial agreement.
Option 1: You can privately agree to abide by the terms of your prenup without a lawyer or judicial intervention
The best and most ideal way to enforce your agreement is to simply agree to enforce the terms of your prenup. The best part? Simply agreeing between the two of you to abide by the terms of your prenup is the cheapest option. This is also why taking a collaborative approach to the prenup-making process is the best way to do it because you will both likely want to do what you agreed to in the agreement.
Option 2: You can negotiate the terms of the prenup
This option is still on the lower end of the pricing spectrum but can begin to get pricey. If you or your partner disagrees with some of the prenup terms, you will need to negotiate or hire your divorce attorneys to negotiate. Lawyers negotiating costs money. The average hourly rate of a divorce attorney in the United States is $270, but depending on your area can climb up to $1,000 per hour or MORE! In some instances, maybe negotiation makes sense for both of you if circumstances have dramatically changed. Going back and forth to negotiate your prenup terms will cost you. The best option is probably still option #1 where you both just agree to what you originally signed up for in your prenup.
Option 3: You can litigate the prenup to enforce it (or not)
This is by far the most expensive and taxing option. This is the option that is also the least likely to fully play out for most couples. Why? Because if you are litigating your prenup, you will likely be spending thousands of dollars to do so. In some cases, even hundreds of thousands. It’s probable that because most couples do not want to spend that much on divorce litigation, you’ll end up settling before you get to the point of a full-blown trial where a judge would be ruling on whether to enforce your agreement in whole or in part. Again, this goes back to why simply agreeing to abide by the terms of your prenup is often the cheapest option.
A deeper dive into litigating the prenup
Litigation is typically what people think of when they think of enforcing a prenup. However, this is not the way your average person enforces their prenup. This is what wealthier people or someone who has a lot of money on the line might do if one spouse doesn’t like the terms of the agreement and wants a judge to invalidate it. Let’s talk about how litigating a prenup works.
1. Litigating a prenup starts with negotiations
Before jumping into court, two lawyers are likely to try to work it out (i.e. negotiate) during the course of a filed, litigated case. Depending on what the issues at hand are in a case, they may also be exchanging documents, doing discovery, and following other court rules. This process will likely entail negotiations between the parties. This process costs money and can be emotionally taxing to go back and forth trying to come to an agreement.
2. If negotiations fail, and the parties can’t agree, the case will proceed on the court’s track- which is usually a track to a trial. If negotiations fail, the next step is to move forward with the litigated process. This basically puts you on a path to a trial. Trials are extremely expensive. They can cost anywhere from $25,000 to $100,000 or more, depending on your state and your case. Keep in mind, that this cost to litigate your prenup is separate from the costs of litigating or negotiating the other aspects of your divorce. For example, if you have kids, and you are fighting over the custody of those kids, that is a separate issue. It may be the same case, but courts will sometimes bifurcate a trial in an effort to separate out and rule on issues. So even if you only end up litigating your prenup for $25,000, the whole of your divorce case could cost more.
3. A judge will decide on the enforceability of your prenup
If you do take the route of litigation and go through a trial, you are essentially asking a judge to look at the construction of your prenup agreement and the substantive contents of it. Is it state-compliant? Was it fairly constructed? Are the terms reasonable? This is what people tend to think of when they think of enforcing a prenup, but it’s rare to get to this point, as it costs so much money and takes so much time. The vast majority of divorce cases settle before trial, and for good reason. The
4. At this point, a judge can effectively “accept” or “reject” the prenup in part or in whole
So, what happens when a judge decides? Well, this usually happens during the course of a trial, and a judge may take into account multiple factors at hand when deciding whether a prenup should be upheld or not. A judge can say the prenup should be enforced (a.k.a. accept it) or a judge can say it’s not “legit” and it should not be enforced either in part or in whole, depending on which state you are in and the circumstances of the case.
A judge will look to the state statutes and case law in determining whether or not to “accept” or “reject” (enforce or not enforce) the prenup. Some of the common things that affect enforceability include:
- Was the contract made voluntarily by both spouses (i.e., no force or duress)?
- Was the contract properly executed by state law (i.e., signed, in writing, notarized, witnessed, etc.)?
- Were there appropriate financial disclosures made?
- Were the terms included conscionable (i.e., was the agreement reasonable and not extremely one-sided)?
- And many more, depending on which state you are in.
What a judge looks at to determine enforceability depends on state law and case law. What is considered an enforceable prenup in one state, may not pass the test of enforceability e in another state. For example, Massachusetts has a two-prong test when evaluating the enforcement of prenups. Under the Massachusetts case Osborne v. Osborne, 1) There must be full disclosure of the Parties’ assets at the time of execution, and free from duress or coercion; 2) the prenuptial agreement must be fair and reasonable at the time of the execution; and 3) the agreement must be fair and reasonable at the time of enforcement. Why using a collaborative process to create your prenup matters
When we talk about a collaborative process, we are not talking about collaborative law – they are two different things. Collaborative law is typically used in divorce cases, but we won’t go into the details and bore you.
As you can see, the best way to enforce a prenup is to simply create an agreement you BOTH feel satisfied with because getting it changed or thrown out down the road costs a lot of money. When going through a divorce, the goal is to have both spouses agree to the terms of the agreement, either through attorneys or not, and without going through divorce litigation. In other words, can you and your partner come to an agreement that you will also agree on during a divorce without needing intervention from lawyers or judicial process? This is critical to creating a good prenup.
Let’s talk about some ways to create a collaborative prenup process:
- Discuss your marital goals and incorporate them into the prenup and a financial plan (ex: you want children and to retire by 50 years old) (also FYI, you’ll need a financial expert for the financial plan).
- Discuss your individual goals and incorporate them into the prenup (ex: you want to become a stay-at-home parent- what does that mean for your finances down the road?)
- Facilitate an environment with open communication (a collaborative prenup process will help!)
- Be honest with yourself and your own needs (don’t just give in because you want to be done with it. This can lead to a more expensive divorce one day!)
- Be open to compromise and allow both people to get something they want out of the prenup (one person should not be getting everything their way–this is begging for problems down the road)
- Give yourself time to sit with it (give yourself a few weeks or months to sit with the final draft to digest the implications and make sure you are comfortable with them)
- Use HelloPrenup’s collaborative process(with our collaborative platform, you can fill out the questionnaire together and negotiate in your own way, while still having access to legal advice or representation should you want it!)
The Bottom Line
Many folks incorrectly assume when you get a divorce, you have to file your prenup somewhere. Then, people (wrongly) believe a judge looks at your prenup and stamps “accepted” or “denied.” That’s simply not how it works. Instead, the reality of the matter is you either agree to abide by the prenup terms with your spouse during your divorce, or you negotiate them and in either case, the outcome is memorialized in a separation agreement. If you cannot come to terms while negotiating, you may have to mediate, litigate, or use another method of resolution depending on the state you are in. Litigation can cost hundreds of thousands of dollars and take years. Most people don’t want to go down that route which is why creating a prenup you both are comfortable with in the first place is key!
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]
0 Comments