JANIS DICKMAN, P.C.
FAMILY LAW
NEWS
PREMARITAL AGREEMENTS
JANIS Y. DICKMAN, ESQ.
I. INTRODUCTION.
Once the province of the rich and famous, it is becoming more and more common for couples contemplating marriage to sign premarital agreements to resolve property and support issues in the event of a future divorce or the death of one spouse. There are a variety of reasons why prospective spouses may desire a premarital agreement. With the average age of first marriages increasing, many spouses-to-be have already established a career or a business or have purchased a home. They want to protect their premarital investment should their marriage end in divorce. Parents, who have transferred wealth to their children, may insist on a premarital agreement to protect their “family money,” before giving their blessing to the union. With the divorce rate remaining high, at about 50 percent, more prospective spouses have already lived through one litigious divorce. Being more cautious the second time around, they want the terms of a potential divorce spelled out and agreed upon in advance. Many older partners, whether previously divorced or widowed, are anxious to protect their estates for the children of their first marriages.
Despite the increasing demand for premarital agreements, statutory and case law guidance for the preparation of premarital agreements is still developing in many jurisdictions. To date, over one-half of the jurisdictions have adopted the Uniform Premarital Agreement Act (the "Act" or the "Uniform Act"). 9B U.L.A. 369 (1987), amended by 9B U.L.A. (Supp. 1994). The Uniform Act provides useful guidelines for practitioners, even in jurisdictions that have not yet adopted a statute to govern premarital agreements. However, as with most areas of domestic relations law, the requirements for an enforceable premarital agreement vary somewhat from state to state. Attorneys must consult the specific statutory and case law in their jurisdictions prior to drafting any such agreement for a client.
II. PURPOSES OF A PREMARITAL AGREEMENT.
A. Rights of the parties if the marriage ends in divorce.
A primary purpose of most premarital agreements is to specify and protect each parties’ “separate property” from the claims of the other spouse in the event the marriage ends in divorce. In most jurisdictions, “separate property” includes the premarital property that a party brings into the marriage and the property acquired by the party during the marriage through inheritance or family gifts. “Separate property” is distinguished from “marital property,” which are the assets acquired through the work and other efforts of either spouse during the marriage. As an illustration, an account containing a spouse’s inherited stock is the “separate property” of that spouse, while a spouse’s retirement account, earned during the marriage as part of his/her employment compensation package, is “marital property.”
In general, state divorce laws provide that a party’s separate property remains his/her property and that marital property is divided between the parties at the time of divorce. In some states, marital property is divided equally, and in other states, marital property is divided equitably, though not necessarily equally.
While state divorce laws provide some protection for a party’s separate property, the protection is rarely complete. Under some circumstances, in some states, what began as separate property may become marital property, which is then subject to the claims of the other party upon divorce. Moreover, the extent to which separate property is protected varies from state to state, and state laws may change over time. For example, the appreciation in value of a party’s premarital residence that is classified as separate property in one state, may be classified as marital property in another state. The issues become even more complex when a spouse works in his/her premarital or family business that continues to expand and increase in value during the marriage.
A premarital agreement allows a prospective spouse to contract, prior to the marriage, for greater and more certain protection for his/her separate property in the event of divorce or death than is provided by state law. In addition, by means of a premarital agreement, a party’s earnings during the marriage, which are generally classified by state law as marital property, may be defined and treated as separate property. To illustrate, state divorce law may classify the appreciation in the value of a spouse’s premarital business due to the efforts of the spouse during the marriage as marital property, which is subject to the claims of the other spouse. The spouse bringing the business into the marriage may want an agreement providing that the entire value of the business at the time of divorce, including all appreciation in the value of the business during the marriage, will remain his/her separate property, free and clear of all claims by the other spouse. As another illustration, state divorce law may provide that although a spouse’s inherited investment accounts are not subject to being divided between the parties, the accounts may be a source of alimony payments. The spouse bringing substantial inherited investment accounts into the marriage may want a premarital agreement providing that his/her inherited accounts are not subject to the other spouse’s alimony claims. Thus, an agreement may be drafted to provide that inherited accounts are not subject to claims for alimony, or that the parties waive alimony completely, or that one party will receive only a specified amount of alimony in the event of divorce.
B. Rights of children if the marriage ends in divorce.
For a number of very good reasons, the rights of children to support may not be adversely affected by a premarital agreement. Uniform Act, Section 3. Issues regarding child custody also may not be determined by a premarital agreement.
C. Rights of the parties upon the death of a spouse.
Rights upon death of a spouse may also be determined by contract prior to marriage. A premarital agreement may be desired to specify before marriage the rights that each spouse will have in the estate of the other spouse. While varying from state to state, most states have rules to prevent disinheriting a surviving spouse. A wealthy spouse, particularly if the spouse has children from a previous marriage, may desire to preserve his/her estate for his/her children. Accordingly, the premarital agreement may stipulate a waiver of certain rights, such as intestate rights, elective share rights, homestead rights, cemetery lot allowances or year's support allowances.
In some states, a spouse could keep virtually all of the assets of the marriage in his/her name and make a will leaving very little to his/her surviving spouse. Thus, a premarital agreement may be even more important to the financially dependent spouse, who needs more than promises that he/she will be provided for in the event of the death of the wealthier spouse. In such cases, the financially dependent spouse would want a premarital agreement requiring the wealthier spouse to make a will, trust or other arrangements, such as a life insurance policy, to insure that he/she would be provided for upon the spouse’s death.
D. Rights of the parties during marriage.
Through premarital contracts, prospective marriage partners may also agree in advance of their wedding to the financial arrangements they will follow during their marriage. Parties owning premarital businesses, investment property, and other assets may want to specify that he/she will have complete rights to own, use, manage, control and dispose of property during marriage free of any claims or rights of his/her spouse. The manner in which certain assets will be held during the marriage may also be specified. For example, some couples specify that the primary residence will be titled jointly with rights of survivorship. Some couples even include agreements as to who will pay various expenses or debts during the marriage.
III. FORMAL REQUIREMENTS FOR A PREMARITAL AGREEMENT.
A. As with other contracts, the parties must have the capacity to contract in order to enter a binding agreement.
B. Under the Uniform Act, a premarital agreement must be in writing and must be signed by both parties. Uniform Act, Section 2. Some jurisdictions require one or even two witnesses, and it is always a good idea to have the signatures notarized.
C. After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties with the same formalities as the initial agreement. The amended agreement or revocation is enforceable without consideration. Uniform Act, Section 5.
D. Marriage is deemed to be the consideration for the premarital contract; therefore, other consideration is not required. Uniform Act, Section 2.
E. A premarital agreement becomes effective upon the marriage of the parties. Uniform Act, Section 4. Thus, if the marriage does not take place or is void, the agreement has no effect. Uniform Act, Section 7.
IV. REQUIREMENTS FOR AN ENFORCEABLE AGREEMENT.
Premarital agreements contemplating the terms of divorce are now enforceable in most states, with some variations. The trend across the country seems to be to uphold premarital agreements as enforceable based on the freedom to contract. Nonetheless, the state legislatures and courts have not given such contracts carte-blanche enforcement and have directed trial judges to examine whether agreements meet certain standards for enforcement. In addition to examining the economic circumstances of the parties resulting from the agreement, the courts consider the conditions under which the agreement was made, including the whether the financial disclosure was sufficient, whether each party was represented by independent counsel, and whether one party’s acceptance was induced by fraud or extreme duress. (That one prospective spouse would have canceled the wedding if the other prospective spouse had not signed the agreement, standing alone, does not constitute sufficient duress to set aside a premarital agreement.)
While the standards for enforcement offer some protection against concealment of assets, overreaching and sharp dealing, which are inconsistent with the obligations of marital partners to deal fairly with each other, consistent with the trend to uphold premarital agreements, most courts have set fairly stiff standards for invalidating agreements. Of note is the variation of the tests for setting aside a premarital agreement from state to state. For example, states that have adopted the Uniform Act apply the tougher test of whether the agreement was “unconscionable” at the time the agreement was executed. Section 6. As an example of a variation, the Georgia courts apply the tougher test of whether the agreement was “unconscionable” at the time the agreement was executed, but apply the somewhat more lenient test of whether enforcement is “unfair and unreasonable” due to changed circumstances at the time of the divorce. Scherer v. Scherer, 249 Ga. 635, 292 S.E.2d 662 (1982). Of further note is that some states continue to hold that a complete waiver of alimony is contrary to public policy and, therefore, is void. In re Marriage of Van Brocklin, 468 N.W.2d 40 (Iowa App. 1991); Howell v. Landry, 96 N.C.App. 516, 386 S.E.2d 610 (1989).
Under the Uniform Act, Section 6, a premarital agreement is valid at the time of divorce until proven otherwise. The Uniform Act, Section 6, provides:
“(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:
(1) that party did not execute the agreement voluntarily; or
(2) the agreement was unconscionable when it was executed and, before execution of the agreement, that party:
(i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.”
In addition, Section 6(b) provides that if the agreement causes one party to be eligible for support under a program of public assistance at the time of divorce, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid eligibility for public assistance.
In Georgia, the trial judge must determine whether an agreement is enforceable by examining the agreement on the following three criteria: (1) Was the agreement obtained through fraud, duress, mistake, misrepresentation or nondisclosure of material facts? (2) Was the agreement unconscionable when entered? (3) Have the facts and circumstances changed since the agreement was executed so as to make its enforcement unfair and unreasonable? Scherer , 249 Ga. 635, 292 S.E.2d 662 (1982).
V. CAVEATS WHEN REPRESENTING A CLIENT.
An attorney who accepts the task of preparing and negotiating a premarital agreement should keep in mind that the risks of client dissatisfaction and of malpractice claims are relatively high in relation to the relatively small fees. This is so because, a premarital agreement requires predicting, planning and resolving matters for the possibility of divorce at some uncertain future date, with unknown circumstances and undetermined issues. Moreover, in addition to expertise in family law, drafting a premarital agreement requires expertise in diverse areas, including estate law, tax law, and contract law. Even the law governing the enforcement of premarital agreements or the validity of specific terms may change over time. Thus, due to the uncertainty of future circumstances, the diverse expertise required and enforcement problems, drafting a premarital agreement may leave an attorney open to a malpractice claim sometime in the distant future.
The nature and timing of negotiating the premarital agreement may increase the possibility of client dissatisfaction. Parties under increasing pressure as the wedding approaches want to avoid all unpleasantness, particularly negotiating an agreement that spells out the terms of their future divorce. If you represent an affluent spouse-to-be, you may have conflict with a client who does not want to make a full disclosure, or who wants to make a one-sided agreement. If you represent a financially dependent spouse-to-be, you may have conflict when your client disregards your advice and enters an agreement that is unfair to him/her. The attorney may be left to pressure his/her client to devote adequate time and attention to negotiating an agreement that protects the interests of both parties and is also fair to both parties.
Agreements executed in haste or shortly before the wedding are more open to challenge at the time of divorce or death of a spouse. Too often, the wealthy spouse will have a premarital agreement drafted and presented to the financially dependent spouse on the eve of the wedding. Unless both parties have the opportunity to obtain counsel, verify disclosure, and negotiate more favorable terms, the agreement may be suspect. Therefore, you should decline to draft, or even to review, an agreement without sufficient lead time.
Premarital agreements need to be tailored as much as possible to the couple’s life circumstances and intentions. Although reviewing examples of other premarital agreements may be helpful, reliance on form language is risky. Moreover, the use of form language, without proper analysis, may result in an unknowing waiver of a valuable marital right.
Absolutely refuse dual representation, which may lead to claims that you have failed to adequately represent one or both of the parties. Also refuse, under any circumstances, to meet with or advise an unrepresented party. While independent representation is not an absolute prerequisite to enforceability, a party not represented by counsel may be more successful in alleging defects such as fraud, duress, misrepresentation, mistake, and unknowing waiver. If the other party declines independent representation, recite in the agreement that you did not represent the other party, that you advised him/her to obtain counsel, that he/she had the opportunity to obtain counsel and that he/she refused to do so.
VI. DO'S WHEN DRAFTING A PREMARITAL AGREEMENT.
A. Full Disclosure.
Probably the single most important factor in drafting an enforceable premarital agreement is the disclosure of the parties’ premarital assets and liabilities. Premarital agreements contain waivers of valuable marital rights. Therefore, full disclosure of each party’s assets and liabilities is material to the other party's informed decision as to whether the agreement is fair and whether to enter into the agreement. If the disclosure is later determined by a court to be under-inclusive or misleading, the agreement may not be enforced. Therefore, it is critical that both parties provide financial statements and supporting documentation to the other party well in advance of the wedding date.
Attach and incorporate financial statements prepared and signed by each party to every premarital agreement. The financial statement should include a listing of the party’s assets, with a good faith estimate of the fair market value of the assets, as well as his/her liabilities and income. Any substantial expectancy, such
as an increase in income, sale of a business or large inheritance, as well as the parties’ intent with respect to such expectancies, should be contemplated and stated in the financial disclosure.
As with negotiating other marital property settlements, counsel has a duty to verify financial disclosure. Where necessary, obtain and examine supporting documentation, such as tax returns, financial statements, deeds, security agreements, stocks, bonds and bank account statements. It is advisable to have a meeting with both parties and their counsel to provide an opportunity for questions regarding the disclosure and for requests of further documentation. Include in the agreement a recital that the parties were given documentation and had a opportunity to question the disclosure. If the other party has failed to examine the financial disclosure provided by your client, recite in the agreement that a financial statement was tendered, attach the statement and have both parties initial the statement.
B. Preparing an enforceable agreement.
The first rule for preparing an enforceable premarital agreement is to prepare a fair agreement. Parties to premarital agreements do not deal at arm's length and should exercise a high degree of good faith and candor in matters bearing on the proposed agreement. If the provisions made for the financially dependent spouse seem fair, the procedural niceties become less important. However, if the
provisions for the dependent spouse are not fair, enforcement may turn on the procedures surrounding the execution of the agreement. For instance, returning the spouse of a millionaire to pauper status in the event of divorce may well be construed as unconscionable, particularly if the spouse did not have independent representation.
In order to draft a fair premarital agreement, view the document as a preliminary divorce agreement and ask what would be fair and reasonable at various points in time under different circumstances. Rather than blanket waivers of all support rights by the financially dependent spouse, consider using partial support waivers, such as provisions for set amounts of spousal support, or provisions that the court may award support based only on the payor spouse's earned income, excluding any consideration of the payor spouse's separate property.
Since enforceability depends on whether the agreement was unconscionable when entered, or due to changed circumstances, the agreement should set forth pertinent facts about the couple’s contemplated circumstances and intentions. Consider citing each party’s premarital education, occupation and income, each party’s obligations and intent regarding children from a prior marriage, and each party’s intent regarding working during the marriage, such as whether one spouse will stop working to care for children born of the marriage.
C. Advising your client.
Spend time with your client and use your expertise in divorce law to explain contingencies that the client may not have considered. Advise your client of the rights affected by the agreement, and do it in writing. Because the law regarding premarital agreements varies from state to state and is still evolutionary, carefully describe for the client the inherent uncertainties that underlie the validity and enforceability of premarital agreements. Counsel the client specifically concerning any clause that may be particularly subject to such challenge, such as waiver of alimony which is against public policy in some states.
Prepare a letter to your client, including information about what the agreement provides and does not provide regarding spousal rights upon divorce and death and how the agreement alters state law regarding those rights. Include in the letter all matters about which you counseled the client that do not appear in the agreement. Present the letter to your client with a statement for the client to sign that he/she has read the letter and understands its contents.
D. Documentation.
In the event the agreement is later contested, it is wise to prepare a memorandum for your file, describing the negotiations and execution of the agreement and noting the other party’s statements indicating knowledge of your client's financial circumstances and understanding of the terms. Since negotiated agreements are less likely to be invalidated, keep all drafts of the agreement, with notes of why changes were made.
VII. SUGGESTED CLAUSES TO INCLUDE.
A. General clauses.
1. Since marriage is a condition precedent to effectiveness of a premarital agreement, include a clause stating that the parties' duties under the agreement are discharged should the contemplated marriage not occur.
2. To avoid a later claim that a party did not understand the nature of the premarital agreement, spell out the intent and purpose of the agreement.
3. Since independent representation strengthens the case for enforcement, state the name, firm and location of the attorneys representing each party. If one party did not have representation, state that the party was advised to seek representation and had the time to seek representation, but chose not to be represented.
4. If a party would not want his/her assets made public, add a provision prohibiting the parties from disclosing the contents of the agreement.
5. Since the likelihood of a premarital agreement being unenforceable increases as the length of the marriage increases, tie provisions for the financially dependent spouse, including alimony and division of property, to the length of the marriage and to whether or not the parties have children together. If the prospective
spouses are willing, the agreement may provide for future cancellation or phase-out of the agreement over time.
6. Since enforcement may turn on the changed circumstances of the parties, anticipate, specify and provide for future events, such as one party leaving his/her employment to raise children, or business set-backs.
7. Every premarital agreement must incorporate a signed financial statement by each party, listing the party’s assets and liabilities and including additional information about the party’s current and expected financial circumstances, such as income and expected inheritance.
B. Substantive clauses in the event of divorce.
1. For the affluent spouse, include provisions that define what assets, property and income will be treated as separate property and how separate property will be treated upon divorce or death. The separate property clause may be drafted to expand the definition of separate property beyond premarital, inherited and gifted property. Because income, property and appreciation of property derived from the work and other efforts of a spouse during the marriage are generally classified by law as marital property, the key decision is whether to expand the classification of separate property under the agreement to include such income and property.
2. In distinct clauses, spell out the manner of treatment of separate property during the marriage, upon divorce and upon death. Most premarital agreements
provide that a spouse’s premarital property will remain that party’s premarital property in the event of divorce or death.
3. For the financially dependent spouse, include provisions that define what assets and property will be treated as marital property and how marital property will be divided upon divorce. When the definition of separate property is expansive there may be very little that would be left as “marital property” to divide between the spouses upon divorce. In such cases, certain property, such as the parties’ primary marital residence and furnishings may be specified to be marital property.
4. In distinct clauses, spell out the manner of treatment of marital property during the marriage, upon divorce and upon death. To avoid litigation at the time of divorce, the agreement may provide for marital property to be divided fifty-fifty, or that each spouse will receive specific items of marital property.
5. Spell out the classification and treatment of income and property that may be acquired in the future.
6. Spell out the consequences of commingling separate income and property with marital income and property and the consequences of jointly titling a party’s separate property.
7. Spell out how gifts from one spouse to the other during the marriage will be treated.
8. The agreement should also provide for the division at the time of divorce of debts incurred by the parties, particularly debts incurred in the joint names of the parties.
9. A waiver of spousal support or alimony must be explicit and unambiguous. If the intent is to eliminate all claims for alimony, specify that past, present and future alimony, temporary, lump sum and in-kind alimony is waived. To enhance enforcement, tie the waiver of alimony to other financial provisions for the spouse, such as provision of funds sufficient to purchase a residence. If the agreement provides for specified amounts of alimony for a specified duration, define all dates and conditions, including whether the alimony will terminate on the remarriage or cohabitation of payee spouse or on the death of either spouse. Specify whether and under what conditions the alimony will be modifiable. Also specify the tax treatment of the alimony payments. Remember that under the current federal tax laws, the payor spouse may exclude the alimony payments from his/her gross income only if the alimony would terminate on the death of the payee spouse. Remember also that limitations on support that leaves a spouse destitute may be unenforceable as against public policy.
10. Specify how attorneys fees incurred in connection with divorce will be paid. As with alimony, limitations on payment of attorneys fees and expenses of litigation that leave one spouse unable to pay for representation may be unenforceable as against public policy.
11. Since divorces cases may drag on for years, particularly in states where marital property continues to accumulate until the date of divorce, specify that for purposes of the agreement the termination date for accumulation of marital property will be the date that either party files for divorce or separation.
C. Substantive clauses in the event of death.
1. Specify the effect of the agreement upon existing wills and trust instruments. 2. Where a party desires to preserve a his/her estate for his/her children and to provide for the support of the surviving spouse, provide for a separate life insurance policy for the spouse or for a trust, with income or use of property, such as the marital residence, going to the surviving spouse for life and the remaining principal going to the decedent’s desired beneficiaries.
3. Since a waiver of rights by the surviving spouse may not be valid unless the right is understood and the waiver is voluntarily undertaken, clearly identify all rights of the surviving spouse that are being waived and specify that the individual has been advised and understands the rights he/she is relinquishing.
4. Provide for the right of each spouse to make a will with provisions for the benefit of the other spouse that are not affected by the premarital agreement.
D. Substantive clauses regarding financial arrangements during marriage.
1. Some couples want to spell out the financial arrangements between the parties during the course of the marriage, such as who is going to be responsible for the payment of bills or how the primary residence and other property will be titled.
2. Tax consequences may also be spelled out in the premarital agreement. For example, if one party has suspect business deductions, the other party may need an indemnity if they are to filed joint tax returns.
E. Procedural clauses.
1. If you have drafted the agreement on behalf of your client, include a clause that the agreement will not be construed against the drafter.
2. Premarital agreements that are drafted in light of the divorce laws of the state in which the parties expect to live generally contain a choice-of-law clause providing that the law of that state will continue to govern the enforcement, construction and
application of the agreement. If no state law is specified, the court in the state in which the divorce takes place will apply its choice of law rules to determine the governing law.
3. Since premarital agreements are open to challenge, include a severance clause, providing that if any provision is held to be unenforceable, all other provisions will remain enforceable. Repeat the clause after any provision, such as waiver of alimony, which may be against public policy. However, if the intent of the agreement would be undermined in the event a specific clause is unenforceable, include an integrating clause, providing that if any clause in not enforced, the entire agreement is void.
VIII. ENFORCING AND CHALLENGING A PREMARITAL AGREEMENT AT THE TIME OF DIVORCE.
A. Enforcing the agreement at the time of divorce.
Under Section 6 of the Uniform Act, the burden of proof for enforcing a prenuptial agreement lies with the person challenging the validity of the agreement. Nonetheless, if you represent the party seeking to enforce the terms of the premarital agreement, do not be lulled into assuming that the agreement will be fully enforced and applied at the time of trial. Early in the case, assert the validity of the terms of the premarital agreement. Request enforcement of the premarital agreement in your complaint or counterclaim and attach a copy of the agreement to the initial pleadings.
If it appears that the other party is going to challenge the validity of the agreement, file a motion to enforce the agreement. Set out the facts and circumstances surrounding the drafting and execution of the agreement to demonstrate that the party seeking enforcement made full and fair disclosure, that the challenging party entered the agreement voluntarily and was not subject to duress, that the agreement was not unconscionable when entered, and that the agreement is not unconscionable under present circumstances.
In moving to enforce a premarital agreement, anticipate the potential grounds for challenging enforcement. Set out the law and the facts to support enforcement. For example, if the challenging party claims that the agreement was signed under duress, include affidavits and documents showing that the party had legal representation and negotiated changes to the agreement. As another example, if the challenging party seeks to invalidate the alimony waiver, cite the statutes and cases in your jurisdiction upholding waivers of alimony in premarital agreements.
Even when the agreement is declared to be enforced, the parties may argue different interpretations of certain terms or may dispute how specific pieces of property are to be classified and treated under the agreement. Thus, in conjunction with your motion to enforce, file a summary judgment motion requesting that the court declare that certain property is to be classified and treated in a certain way. Set out clearly in the motion the list of property that is subject to the agreement and the treatment of each piece of property under the terms of the agreement. Of course, the success of a summary judgment motion will depend on whether the facts are uncontested.
In the event that a certain contested provision is clearly unenforceable, examine the agreement and consider whether general contract law or the agreement language will permit the clause to be severed. As in drafting the agreement, consider whether it is in your client’s best interests to sever the invalid provision and enforce the remainder of the agreement, or to abandon the agreement entirely.
In the event that the premarital agreement is not enforced by the court and
preserving your client's separate property remains a major issue, file a summary judgment motion, requesting that the court classify the property in question as your client's separate property.
B. Challenging the agreement at the time of divorce.
In a contested divorce suit, if you represent the party who will be foreclosed from valuable marital rights, such as division of property, alimony or attorneys’ fees, consider the various grounds for attacking the enforcement. Examine the agreement to determine whether all of the technical requirements were met. Examine the circumstances surrounding the negotiations and signing of the agreement. In particular, circumstances that impose time pressure on the disadvantaged party have been held to invalidate premarital agreements. The less time your client had to consider the agreement before the wedding, the more likely the agreement was signed under duress. If your client did not have the advice of independent counsel, he/she may have waived rights without full knowledge or understanding of the consequences. Where the attorney for the affluent spouse met with the financially dependent spouse, or where the wealthy spouse insisted that the other spouse not consult an attorney, enforcement may be challenged.
Examine the disclosures made by each party at the time that the agreement was made. If the other party had substantial property that was not disclosed, or was not fairly valued, your client may have grounds for attacking the agreement.
Remember that a premarital agreement is a contract. Do not overlook contract grounds, such as fraud, overreaching, duress or coercion.
Examine the circumstances of the parties and the fairness of the provisions at the time that the agreement was entered. For example, if the agreement forecloses one party from receiving property obtained in part by that party's own efforts during the marriage, the agreement may be attacked as unconscionable. Consider whether any of the terms of the agreement are against public policy, such as terms foreclosing child support or leaving a spouse eligible for public assistance. Consider any changed circumstances during the marriage, particularly unanticipated changed circumstances, that render the agreement unfair. Consider also how the parties have performed under the agreement. For example, has either party abandoned the agreement by failure to perform certain acts, such as failure to transfer property or failure to maintain a life insurance policy.
IX. CONCLUDING COMMENT:
Consistent with the increasing demands, dealing with premarital agreements is becoming a significant part of family law practice. Practitioners are urged to recognize and respect the potential pitfalls and liabilities and not to treat this area of their practice as a sideline. Drafting and negotiating premarital agreements requires as great, if not greater, breadth of knowledge of the law, careful attention to detail, advocacy skills, client rapport, and ingenuity.