Red Flags you Missed Before Signing a Prenup
Love it or hate it, the prenuptial agreement has become a fairly common practice before marriage. Although many people still have their reservations about the business-like approach to marriage, couples of high net worth see the value. It is a great precautionary measure for those who like the security of knowing how their financial futures will fare in the event of a divorce. However, not every prenuptial is the same and there are a handful of caveats to research before signing a prenup and how to challenge a bad one.
The major benefit involves the formal nature of the agreement between the soon to be spouses; dictating which assets will remain with each spouse and which become marital property. Many often consider the agreement to be a risk in and of itself, but recent cases have shown examples where prenups were voidable.
Before signing a prenup agreement or any other contract, be sure to hire an experienced divorce lawyer to review the terms. Below are a few examples of what makes a “bad” prenup pursuant to Pennsylvania statutes, contract law and established case law.
1. Lack of full disclosure
Before signing a prenuptial agreement, each spouse must fully disclose all assets. During divorce and in prenups, many spouses are suddenly worth a lot less or the business is just not as good as it used to be, so assets don’t end up in the marital settlement agreement (MSA). If your spouse did not fully disclose all assets and the full extent of all income, there could be grounds to have the agreement voided during divorce.
2. Your mental state at the time of signing
Much like general contract rules, a contract may be voidable if it was found to be established by coercion, signed under duress or a party signed without the mental capacity to reasonably enter the agreement. With respect to mental capacity, intoxication, illness or influence of drugs are all factors that could contribute to a voidable contract.
3. Improper filing or procedural errors
This document is a legal contract and should be treated with the same scrutiny as any other contract. The clauses and verbiage, proper explanation of terms, and other elements must be bulletproof. If it is ambiguous and indirect or is missing details, it may be considered invalid.
4. You signed without proper legal representation
Much like contract law, each spouse should make every effort to have an experienced family lawyer review the contract before signing. Many couples choose to go with one attorney to draft something they both agree to; however, the individual commitment to protect your individual interests does not exist. Bear in mind that wealthy families could be the source of the need for this agreement and their interests are the focus. Without your own family lawyer to review, it is very possible that you are getting a bad deal.
5. Blatantly unreasonable terms
The courts generally avoid nitpicking every term of a contract but in some cases, it is necessary. Where a prenuptial agreement indicates specific, outrageous terms, it could be deemed voidable. For example, comical provisions we associate with pop culture’s understanding of prenups, i.e. prohibition of weight gain, grooming habits, and waiving child support are not going to stand up in front of a judge.
Simeone v. Simeone is a Pennsylvania case that set precedents on how these agreements are reviewed by the court. For the purposes of reviewing a prenuptial agreement, this case found that certain terms were not valid – such as a waiver of full entitlement to support. While raising some interesting cultural notes on gender roles and women's ability to conduct their own business, this case was profound in its newness and application of both domestic and contract law.
Prenups must be taken seriously and with reviewed with clarity. This written agreement will be binding and could affect your life dramatically in the future. If you are presented with a prenup on your wedding day, you could find yourself facing emotional coercion to make hasty decisions. Before signing a prenuptial agreement, hire the services of an experienced divorce lawyer to review the terms and make suggestions.
Call the Law Offices of Michael Kuldiner, P.C. and schedule your consultation with an experienced family attorney, at (215) 942-2100. Feel free to submit an online inquiry form and a member of our team will contact you shortly.