The formation of an antenuptial agreement, a.k.a. premarital agreement or prenuptial agreement (prenup), is often a request made by the party who is in a stronger financial position compared to that of his or her fiancé. What this means is that in the unfortunate event of a divorce, instead of dividing the assets that were contributed to a common fund evenly as per common marriage laws, said assets would be allocated according to what were stipulated and agreed upon by both parties in the prenup. In simpler terms, what the instigating party intends to do is to leave his or her future spouse with less than what he or she would have received in normal divorce proceedings.
You may wonder what the prerequisites are, if any, that would make a prenuptial agreement work. Based on the outcome and holdings of various relevant cases in the States of New Jersey, California and Tenessee, a prenuptial agreement has a much higher probability of being valid and enforceable when the following conditions are satisfied:
- Both parties have fully declared all details about their assets in the agreement prior to signing. This means a full and complete disclosure of the entirety of your net worth by way of providing a thorough list of all assets and their corresponding estimated values.
- Both parties have entered into the agreement of their own free will i.e. no coercion or duress is encountered during the formation of the prenup and at the time of signing. Give yourself and your fiancé plenty of time to go through the agreement thoroughly BEFORE signing.
- There was ample time and opportunity for a qualified attorney to draft the agreement well in advance of the wedding date. In other words, a working prenup must be freely and carefully negotiated – it should never be a piece of paper carelessly thrown together in a rush. Such an agreement will not be looked kindly upon by the judges.
- Both parties must have qualified legal counsel representing them. If your fiancé refuses to or lacks the opportunity to do so, it is your responsibility to convince or support him or her to hire an attorney to proceed with the prenuptial negotiations. In the high profile case of Bonds v. Bonds (2000) involving the San Francisco Giants All-Star baseball player Barry Bonds, the California Court of Appeal ruled that the agreement was unenforceable due to the wife not having been represented by a legal counsel during the process of negotiations and at the time of signing.
- There is not a substantial difference in the sophistication level between you and your future spouse. In the Grubb v. Grubb (2017) case settled in the Tenessee Court of Appeals, the prenuptial agreement was invalidated based on grounds of rushed execution – only two days before the actual wedding date, the Wife’s lack of legal counsel, and the sophistication gap between the spouses caused by relative education levels and an age difference of over 20 years.
- Both parties fully understand the terms laid out in the prenup and their implications. To achieve this, sit down with your legal counsel to patiently go through each of the item and ask questions where applicable. You might have to seek legal advice more than once. It is after all an agreement that will protect your financial assets and even your livelihood in the unfortunate event of a divorce – Do not cut corners and try to be thrifty at this point – You might regret it sooner or later.
- The agreement and its stipulated terms do not leave the other party destitute should they come into force. In other words, a prenup should be conscionable on top of being freely negotiated and voluntary. It is however necessary to distinguish between the concepts of “unfair” and “unconscionable”. In the case of DeLorean v. DeLorean (1986), the Superior Court of New Jersey ruled that the agreement was not deemed unconscionable since the division of the assets was voluntarily agreed to by Mrs. DeLorean and she will not become destitute as a result. Despite the terms agreed upon being seemingly unfair as the assets being granted to the wife was absolutely unsubstantial when compared to that of the husband, the fact that she consented to these terms and that she wouldn’t be left with a substantially reduced lifestyle rendered them conscionable and hence unobjectionable to the Court.
By following the above points, you can substantially increase the chance of a successful prenuptial agreement. Remember, making sure that a prenup works by solidifying its enforceability and validity is superior to coming up with a lengthy agreement filled with overbearing and unfair terms that might be challenged in a divorce court. It is in your best interest to ensure that the process of coming up with and enforcing a prenuptial agreement is a smooth and legally substantiated one.
To download a free attorney drafted sample prenuptial agreement form, click here.