A prenuptial agreement, often referred to as a prenup, is a legal contract signed by couples before marriage that outlines many different topics, such as how assets will be divided in the event of divorce or death and alimony. With the rise in popularity of prenups, many people wonder whether they will hold up in court if challenged. The answer is yes, they can hold up, but that might not always be the case. Keep reading to learn the ways a prenup may not hold up in court.
Varying state laws
One crucial aspect to grasp is the diversity of state laws concerning prenups. While a prenup may be upheld in one state, it could encounter obstacles if replicated elsewhere. For instance, in California, legal representation is required to waive or alter spousal support in a prenup (Cal. Fam Code 1612), whereas this requirement may not exist in other states. Consequently, prenups containing spousal support waivers but lacking legal representation may be valid in certain states but not in California. The moral of the story? Each state is different when it comes to what prenups will hold up in court.
What are the requirements for a valid prenup?
So, what exactly are the requirements for a valid prenup? Well, remember, every state is different. What is required in one state may not be required in another. However, here are the most common requirements for prenups in most states:
- Get It in Writing: Verbal agreements won’t cut it. Put everything on paper to have a valid prenup.
- Signatures Matter: Sign the contract to make it official. We recommend initialing each page, as well.
- Get It Notarized: Some states require notarization for validity. Many states recommend it even though it’s not required. You can now notarize your prenup online directly through the HelloPrenup app.
- Voluntariness: Ensure both parties sign willingly, free from coercion or duress.
- Financial Disclosure: Disclose all finances transparently to avoid complications later. And, no, you cannot skip certain assets on your financial disclosure form.
- Not Unconscionable: Keep it lawful and fair. Unconscionable or unlawful terms risk invalidation.
- Legal Representation: While legal representation is not a prerequisite for a valid and enforceable prenup in any state, legal counsel can become required in certain states in certain situations. For example, if you alter spouse support in California, you are then required to get a lawyer.
- Unique State Requirements: Each state has its own rules; be aware of unique provisions. For example, California has a unique law called the “7-day rule” which requires couples to wait seven calendar days between the final agreement and the day it is signed.
Grounds for Challenging Prenups
When people ask, “Will a prenup hold up in court?” They are essentially asking, “What happens when someone challenges the validity and enforceability of a prenup?” And “Challenging a prenup” basically means bringing a claim to the court on the notion that the prenup should not be enforced for a certain reason. Those reasons or “grounds” for challenging a prenup may include:
- Execution Issues: If the prenup is not in writing, if it is not signed, or if it is not notarized (in some states), this can lead to an unenforceable prenup.
- Lack of Voluntariness: Any type of duress, coercion, or undue influence (i.e., not signing the prenup voluntarily) can render the prenup invalid. In other words, courts scrutinize whether both parties signed willingly.
- Financial Disclosure: Financial disclosure is required on some level in every state. Inadequate disclosure, such as concealing significant debt, can lead to a prenup’s dismissal.
- Legal Representation: In a few states, attorney representation is mandatory in certain circumstances. For example, if you alter spousal support in your prenup in CA, you now require a lawyer. A lack of legal counsel in this situation will lead to an unenforceable spousal support clause and potentially an entirely invalid agreement.
- Unlawful Clauses: Any terms conflicting with laws or public policy are likely to NOT be upheld in court. For instance, including child support terms in your prenup.
- Unconscionability: Clauses deemed excessively unfair can be challenged. What constitutes unconscionable varies by state but generally refers to extreme unfairness in the agreement.
Real-life cases of prenups holding up in court
Examining real-life examples can provide insight into the enforceability of prenuptial agreements.
Prenup challenged on the basis of voluntariness (Matter of Nizhinikov, 132 A.3d 412 (2016))
Alexander and Marianna’s relationship began in 2003 when Marianna lived in Russia and Alexander in the U.S. After two years, they got engaged and planned to marry in Russia. Shortly after the engagement, Alexander insisted on a prenup to safeguard his children from a previous marriage. Marianna, after having the agreement translated into Russian, her native language, consented, and they wed in the U.S., signing the prenup the same day as the wedding. Despite the prenup lacking attached financial statements, Marianna challenged its validity during divorce proceedings, arguing lack of voluntariness due to its signing on the wedding day and absence of financial disclosures. However, the court upheld the prenup, citing prior agreement discussions, Marianna’s education and legal background, ample time for investigation, and absence of coercion or unequal bargaining power, concluding Alexander’s good faith in the matter.
Prenup challenged on the basis of financial disclosure (Matter of Marriage of Knoll, 671 P.2d 718 (Or.App. 1983))
Husband and Wife signed a prenup without detailing Husband’s assets, though Wife worked for Husband’s business. She managed bookkeeping, payroll, and oversaw ten business checking accounts. In other words, Wife had comprehensive knowledge of Husband’s financial holdings (you see where we’re going with this…). Wife challenged the prenup based on lack of financial disclosure, and the court ruled that Wife’s employment offered sufficient insight into Husband’s assets to satisfy the financial disclosure requirement. In other words–this prenup was upheld by the court!
Real-life cases of prenups not holding up in court
However, there are also instances where prenuptial agreements have been invalidated due to factors such as lack of full disclosure or unfair terms.
Prenup challenged on the basis of unconscionability (Justus v. Justus, 581 N.E.2d 1265 (Ind. Ct. App. 1991))
In this Indiana case, a prenuptial agreement stated that in the event of divorce, the husband would pay the wife $500,000 in alimony, along with $500 per week during divorce proceedings. At the time, the husband’s net worth was over $31 million at the time of signing the prenup. However, when the couple divorced, the husband had lost all his wealth and declared bankruptcy, with a net worth of only $300,000 and an annual income of $50,000 at the time of divorce. The wife then asked the enforce the agreement requiring the husband to pay $500,000 in alimony. The court deemed the agreement unconscionable and unenforceable due to the drastic change in financial circumstances, as it would have left the husband without adequate means to support himself.
Prenup challenged on the basis of lack of financial disclosure (In re Marriage of Rudder, 217 P.3d 183 (Or.App. 2009))
Husband and Wife, married in 1989, faced a dilemma when Husband insisted Wife sign a prenup drafted by his attorney the day before their Vegas wedding, stipulating each had no claim to the other’s separate property and waived rights to alimony in divorce. Attached to the prenup was a list of Husband’s assets, but it lacked monetary values next to the assets. Despite Wife’s reluctance and lack of time to review the agreement or consult her own attorney, Husband reassured her that his attorney had reviewed it for her, so she reluctantly signed.
Wife ended up challenging the prenup’s enforceability, arguing lack of voluntariness due to insufficient review time, absence of separate legal counsel, and lack of proper financial disclosure. The court sided with Wife, deeming the prenup unenforceable, emphasizing the importance of full disclosure, adequate review time, and individual legal representation (you cannot share a lawyer).
Conclusion
To wrap it up, it’s clear that whether a prenup will stand up in court depends on a bunch of different factors. These include varying state laws, making sure all the necessary formalities are followed (like notarization), and ensuring both parties are signing the document voluntarily. Real-life examples show us how things can go either way, so it’s important to get a prenup that is state-compliant. After all, nobody wants to end up in a courtroom battle over whether their prenup will hold up!
Frequently Asked Questions (FAQs) about Prenups Holding Up in Court
Let’s dig into some of your FAQs on prenups holding up in court.
Q: Can a prenup override state laws regarding property division?
A: Yes! A prenup can specify how assets will be divided, effectively overriding the default state laws on property division. Of course, there are exceptions where the court can step in and throw out your agreement, but if your prenup is valid and enforceable, yes, it effectively overrides state laws.
Q: Can a prenup address child custody and support?
A: No. Prenuptial agreements typically focus on financial matters and are not enforceable for child custody or support arrangements in virtually all situations.
Q: What happens if one party fails to disclose assets in the prenup?
A: Failure to disclose assets can render the prenup invalid, leading to potential challenges in court.
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]
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