Overview of Prenuptial Agreement Law

Overview of Prenuptial Agreement Law

This section is an overview of the law relating to prenuptial agreements. If you are going to enter into a prenuptial agreement, you should have some idea of the extent to which you can expect it to be enforced, what matters can be covered, and how the agreement relates to probate and divorce proceedings. 

A Brief History

The law of prenuptial agreements has evolved over time. Originally, they were not recognized by some courts, because it was felt that prenuptial agreements somehow encouraged divorce. Eventually, they were enforced by courts, and the law regarding prenuptial agreements was slowly created in the opinions of the appellate courts.

Next, state legislatures became involved, and prenuptial agreements were officially made a part of probate laws. These laws did not specifically apply to divorce situations, but the divorce courts began unofficially using them anyway.

Finally, in 1983 the Uniform Premarital Agreement Act (UPAA) was created, which has since been adopted in the District of Columbia and the following states: Arizona, Arkansas, California, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Texas, Utah, Virginia, and Wisconsin. The UPAA has been introduced for adoption in Mississippi, Missouri, South Carolina, and West Virginia.

In addition, the following states have a statute or case law that allows for prenuptial agreements in a form other than the Act: Alabama, Colorado, Georgia, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, and Washington. 

The fact that the number of states that have adopted the Uniform Premarital Agreement Act has grown significantly and the number of states otherwise allowing these types of agreements indicate that prenuptial agreements are becoming more popular and acceptable.

The Courts and Prenuptial Agreements

Unfortunately, there is no absolute guarantee that a particular agreement will be enforced. Judges make the decisions, and there is no way to predict what a particular judge will do in a particular case. All you can do is look at various decisions made by various courts, and try to avoid the pitfalls that defeated similar agreements in the past. If the judge feels that both parties knew what they were doing and the agreement is fair, the agreement will likely be enforced. If the judge feels that one party took unfair advantage of the other, the agreement will be declared invalid.

Typically, courts typically uphold prenuptial agreements unless one person shows:

  1. The agreement is likely to promote divorce
  2. The agreement was written and signed with the intention of divorcing
  3. One party was forced into signing
  4. The agreement was created unfairly

In addition, all prenuptial agreements should be based on the full disclosure of assets and debts by both parties. If you do not fully disclose your financial position, the prenuptial will be vulnerable in court. In addition, while you do not need an attorney to create a prenuptial agreement, it may be a good idea to retain one if the other spouse does so.

Types of Prenuptial Agreements

How a court looks at a prenuptial agreement may depend upon the husband's and wife's situations and the type of prenuptial agreement. Prenuptial agreements may be divided or broken down into three types of provisions:

  • Those concerning the division of property upon the death of one party
  • Those that simply designate each party's separate property being brought into the marriage
  • Those that concern rights in property acquired during the marriage. 

Any prenuptial agreement may contain one or more of these types of provisions.

The Parties

Where both parties have a similar value of property and are fairly equal in their knowledge of or experience with financial matters, the courts are likely to enforce the agreement. However, where one party has much more property or income than the other, or is much more financially sophisticated, the court will more closely consider the following questions.

  • Did the party with the advantage fully disclose the extent of his or her property and income to the other party?
  • Are the provisions of the agreement fair and reasonable to the other party?
  • Did the other party freely and voluntarily sign the agreement?
  • Did the other party have the advice of independent legal counsel before signing the agreement?