While everyone wants a rock-solid prenuptial agreement that protects them, sometimes prenups can go too far. At the end of the day, this strategy often backfires because courts sometimes strike provisions and throw out prenups that are considered overly one-sided, also known as “unconscionable.” So, what exactly is an unconscionable prenup, and how can you be sure that yours isn’t? Let’s dive in!
What is unconscionability?
If a prenup is determined to be unconscionable by a judge, the result will likely be invalidation of the provision in question or potentially and depending on the circumstances, the entire agreement. So, what exactly is an “unconscionable agreement?” Although what is considered unconscionable differs depending on state caselaw, generally, unconscionable agreements are considered to be beyond unfair. The definition of unconscionability varies slightly from state to state, but it generally has the same idea of extreme unfairness. Big picture, a prenup may be considered unconscionable based on purely one-sided provisions, unethical demands, or illegal mandates. For example, if a provision in the prenup required one party to do a handstand every Monday for one hour per session for a year after the divorce or face a fine. A court would invalidate that provision and would not enforce it. Additionally, if the enforcement of a prenup will leave one of the spouses impoverished and dependent on the state for support, a court may find that agreement (or the provision regarding a waiver of support) to be unconscionable.
Real-world example of an unconscionable prenup: extremely one-sided and leaving one spouse impoverished
In January 2013, a California court (In re Marriage of Facter, 212 Cal. App. 4th 967) set a precedent for years to come when they threw out a prenuptial agreement because they deemed it unconscionable. The reason? It was an extremely unfair prenup! The husband walks away with millions upon millions, and the wife walks away with zero? That’s not okay!
At the time they signed the prenup, the wife was an unemployed high school grad and single mom of two kids. Meanwhile, the husband was a Harvard-educated attorney who earned about $500,000 in annual income at the time of the prenup.
Here’s specifically what the prenup said:
- None of the property obtained during the marriage would be considered community property (i.e., no money or property obtained during the marriage would be split up in the divorce).
- In the event of divorce, the wife would receive $100,000, plus an additional $100,000, depending on certain factors. For example, if the marriage lasted at least fifteen years and he remained a partner at his law firm for seven years or more, then the wife would receive one-half of the equity in the marital home, minus the husband’s down payment and costs of sale. In addition, the wife would receive the household furnishings and a Jaguar.
- The wife waived her right to spousal support.
- It limited the amount of child support and stated that each party would pay their own attorney fees.
The wife, of course, challenged the validity of the prenup. The California court agreed with her and ruled that due to the dramatic disparity in the couple’s assets and income at the time they entered the prenup, the waiver of spousal support was unconscionable. In addition, there existed a significant inequality of bargaining power. He was a Harvard grad, for goodness sake!
The Court further stated that if the prenup were honored, the husband and wife’s financial situations would make the spousal support waiver “unjust.” At this point, the husband had made ten million dollars in assets and earned one million dollars per year, while the wife remained unemployed and had no separate assets of her own during the marriage.
Want to read the whole case here? Check it out! Facter v. Facter
Real-world example of an unconscionable prenup: change in circumstances
A court case from America’s heartland, Indiana (Justus v. Justus, 581 N.E.2d 1265 (Ind. Ct. App. 1991)) illustrates how a change in circumstances can deem a prenup unconscionable in some states. In this case, the husband and wife had a prenup that said the husband would pay the wife $500,000 of alimony and also $500 per week during the divorce proceedings. At the time they signed the prenup, the husband’s net worth was about $31 million.
The couple divorced a few years later, and the wife asked the court to enforce the prenup to get her $500,000 payout. Unfortunately, right before the divorce proceedings, the husband had lost all his money and declared bankruptcy. At the time of the divorce, his net worth was about $300,000.
The court said that the change in financial circumstances rendered the agreement unconscionable. The judges explained that if by enforcing a prenup, it leaves a spouse in such a bad position that they can’t even support themselves, then the court may throw out the prenup. Makes sense!
Want to read the whole case word for word? Check it out! Justus v. Justus
Unethical demands can deem a prenup unconscionable
While prenuptial agreements are generally financial in nature, parties sometimes seek to include additional non-financial terms often referred to as “lifestyle clauses.” For example, infidelity clauses are very popular in prenups. However, these non-financial terms can quickly go too far, and when they do, the provision can be invalidated. For example, one party may demand to include weight restrictions in the agreement, such as “prohibiting” their spouse from going above a certain weight (yuck!). Just a little unsolicited advice from HelloPrenup – if your spouse puts weight restrictions in your prenup, don’t marry them. Other examples include contractually requiring one of the parties to perform all of the housework and even requiring sexual acts. (Again, probably don’t marry someone like that!)
Agreements such as these are severely frowned upon, and it’s easy to see why a court would want to strike these from a prenup or throw the prenup out altogether.
Illegal mandates can deem a prenup unconscionable
This hopefully goes without saying, but a court will not enforce a prenup that requires one of the spouses to break the law. So, be sure to keep things legal in your prenup!
How to ensure that your prenup is conscionable
If a court finds that your prenup is unconscionable, the agreement may be thrown out and invalidated. Nobody wants that! The contract doesn’t need to be perfectly 50/50 to be conscionable, but it shouldn’t put one party in a position where they are dependent on public assistance or deprives them of the ability to accumulate assets.
Here are a few additional things to remember:
- Negotiate and sign your prenup well in advance of the wedding
- Proceed with caution with lifestyle clauses
- Ensure that the prenup provides for both spouses (especially important if one spouse is a stay-at-home parent)
- Discuss debt and ensure that it is fairly allocated
- Do not include any illegal terms in your agreement
The bottom line
Remember that what constitutes an “unconscionable agreement” can be very subjective. While there are extreme examples, like in the examples above, what is unconscionable will be determined on a case-by-case basis. Additionally, it is also important to remember that the meaning of unconscionable may vary by state. Before beginning your prenuptial agreement process, be sure to check out the laws of your state and speak with an attorney if you are looking for legal advice or questions. You can find more information on your state laws on 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]