Prenuptial agreements and changing circumstances

 Posted on October 03, 2013 in High Asset Divorce

When a couple decides to get married, the thought of a prenuptial agreement often comes up at one point or another. In many cases, the idea is quickly dismissed, often by young couples who have few assets over which to fight. Often, however, couples choose to pursue a prenup. This is especially common among people who are on their second marriages and presumably have for more assets that must be accounted for.

Indeed, prenuptial agreements are often an element in a high-asset divorce, a separation in which the couple controls a great deal of assets. Generally speaking, these agreements are a helpful tool for spouses who wish to maintain control of the assets they owned before they entered the marriage, many of which may have strong personal or sentimental value. There are some situations, however, in which a prenuptial agreement may be found invalid.

Like most contracts, a prenuptial agreement cannot be upheld if honoring the document would be "unconscionable." This means the prenup may be ruled invalid if circumstances change for a couple in a way that could not have been foreseen.

Take, for example, a wife who suffers a serious injury during the course of her marriage, such as one that requires expensive, lifelong treatment. Later, the couple decides to divorce. Their prenuptial agreement states that the woman's husband should receive most of the assets, and is not required to pay spousal support. In this case, the prenuptial agreement may well be ruled invalid because enforcing it would leave the wife with no means of supporting herself in her injured state.

The level to which prenuptial agreements can be ruled invalid varies from courtroom to courtroom, because the definition of "unconscionable" can be interpreted in many different ways. As a result, prenuptial agreements can end up as a source of litigation. Attorneys who draft such agreements must therefore take great care to write the document carefully and correctly, and to advise their clients of the limitations that prenuptial agreements can have.

Source:
The Wisconsin Law Journal, "FAMILY LAW: The problem with prenups" Gregg Herman, Oct. 01, 2013