Ten Ways To Attack A Prenup

29 Dec Ten Ways To Attack A Prenup

Texas law favors prenups. When written correctly, and when the right signing procedure is followed, a prenup is hard to invalidate.

Even though a skilled lawyer can write a solid prenuptial agreement, if the law is not followed it might be successfully attacked in a divorce or probate proceeding.

These are ten common mistakes that might void a prenup. If you want to invalidate a prenup ask a lawyer about each of these regarding your prenuptial agreement.

1. Prenup must be Written

Texas Family Code 4.002 lists only two initial formalities for a valid prenup:

A. It must be written; and
B. Signed by both parties.

A verbal promise is not a prenup. A prenup signed by one party is not valid. Check that it has been signed everywhere indicated. Some prenups have several signature lines and require initials on each page. Failure to initial will not invalidate the document, but failure to sign the right line could.

2. Prenup must be Signed Before Marriage

Under Texas Family Code, §4.004 a prenup becomes valid when the fiancés marry each other. It must be signed before the marriage. After marriage, a postnuptial agreement can be signed. Depending on how the prenup is written, maybe it can be construed as a postnup if signed after marriage. Most likely, it will not be valid. If the fiancés live together and unintentionally meet the requirements to create a common law marriage before the ceremony, even if the prenup is signed before the wedding day, it might still not be valid because the spouses were already common law married. Tell a lawyer about the living circumstances before marriage if you’re trying to attack a prenup.

3. Must be Signed Voluntarily

To be valid, the prenup must be voluntarily signed by each fiancé. The Texas Family Code does not define voluntary in this context. It must be decided on a case-by-case basis.

• Being too busy to read a prenup does not make it involuntary.
• Regret about a prenup when the marriage fails does not mean it was involuntary.
• Signing because a fiancé will only marry with a prenup is voluntarily. A person may choose not to marry. Signing a prenup to avoid heartbreak is a voluntary decision.
• Signing a prenup to avoid embarrassment because it is presented shortly before the ceremony is voluntary. A person may choose not to marry, even during the ceremony. Rejecting your fiancée’s demand to sign a prenup, even with people awaiting a ceremony, is an option. Choosing to sign moments before the ceremony is an unpleasant choice, but still a choice.

A Judge has discretion in litigation. Presenting a prenup at the wedding will make litigation more expensive and could make a Judge lean in favor of the spouse who was blindsided at the wedding.

Successfully attacking a prenup on the basis that it was not signed voluntarily is rare.

In one Texas case a prenup was found to have been signed involuntarily. (Moore v. Moore, 282 S.W.3d 190, Tex. App- Dal. 2012). The groom misled the bride about whether changes had been made to a draft and whether her lawyer had approved it. Her lawyer had not seen or approved the final draft. The groom kept the document hidden from the bride until moments before the wedding. The court held that was not voluntary because she thought her lawyer had approved it.

4. Must Not be Unconscionable when Written AND…

If a premarital agreement was signed voluntarily, it might be invalid if other, onerous, conditions are met. Even an unconscionable prenup is valid unless additional conditions are met.

“Unconscionable” is not defined in Texas’ prenup statutes. It originated in contract law and most definitions and interpretations are in that context.

Black’s Law Dictionary (10th ed. 207), defines “unconscionability” as

“Extreme unfairness. • Unconscionability is normally assessed by an objective standard: (1) one party’s lack of meaningful choice, and (2) contractual terms that unreasonably favor the other party. 2. The principle that a court may refuse to enforce a contract that is unfair or oppressive because of procedural abuses during contract formation or because of overreaching contractual terms, esp. terms that are unreasonably favorable to one party while precluding meaningful choice for the other party. • Because unconscionability depends on circumstances at the time the contract is formed, a later rise in market price is irrelevant.

A 1997 Texas case about whether a prenuptial agreement was unconscionable included

“a party who knowingly enters a lawful but improvident contract is not entitled to protection by the courts. …the courts, as such, are not interested in the wisdom or impolicy of contracts.” (Marsh v. Marsh, 949 S.W.2d 734, Tex. App. Houston (7th Dist.) 1997.)

In that case a one-sided prenup was upheld because the husband, who agreed to transfer much of his substantial estate to his wife, knew he had the right to have the agreement reviewed by a lawyer, but didn’t, and was mentally competent. He voluntarily made a deal he later regretted. That did not make it unconscionable.

Unconscionability is hard to prove, and even then, it’s not enough to invalidate a prenup.

5. … Lack of Knowledge About Each Other’s Finances

Even if a prenuptial agreement was unconscionable when signed, the spouse challenging it must also prove that before signing the prenup:

A. She was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; and

B. She 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

C. She did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Even if the prenup was unconscionable when written, if the complaining spouse was provided a fair and reasonable disclosure of the property and financial obligations of the other, it is enforceable. If it is unconscionable and no disclosure was provided but the complaining spouse voluntarily waived her right to disclosure in writing before signing the prenup, it is enforceable. If the premarital agreement is unconscionable, no disclosure is made, no waiver is signed, but the complaining spouse reasonably could have had adequate knowledge of the property or obligations of the other, it’s enforceable.

6. Unconscionable When Signed

If a prenup was conscionable when signed, but years later when it’s put into effect the result is unconscionable, it’s valid if it was signed voluntarily. To meet the requirement for unconscionability, the prenup must be unconscionable when signed, not when put into effect.

7. Bad Timing

Waiver Signed Too Late

If fiancés elect to sign waivers of disclosure instead of disclosing each other’s property and financial obligations, the waivers must be signed BEFORE the prenup. Texas law does not include a minimum amount of time the waiver must be signed before the prenup. If all are signed at one time, it’s good to have the notary write the times at which the waivers were signed, and then write the times each fiancé signed the prenup. The times of signing the waivers must precede the signing of the prenup. Even if the waivers are not signed before the premarital agreement, the prenup must still be unconscionable to be invalid. If the prenup is unconscionable, it is valid unless there’s no disclosure of property and debts, no opportunity to know each other’s property and debts, and no waiver of disclosure before the prenup is signed.

Prenup Signed Too Late

The prenup must be signed before the marriage. If people get busy and end up signing it after marriage, it’s probably not valid. Texas recognizes postnuptial agreements, sometimes called Partition and Exchange agreements. Depending on what’s in the prenup, it might be salvaged as a postnup, but most prenups would not qualify as a postnuptial agreement.

8. Invalid Marriage

If the marriage turns out to be invalid, a prenup is enforceable only to the extent necessary to avoid an inequitable result (Tex. Fam. Code sec. 4.007). A judge decides whether the result of the prenup is inequitable, which mean fair. Without a valid marriage, there is also no community property because the parties were never married to each other.

9. Badly Written Prenup

A prenup is a contract. Like any contract it must be written correctly. The law allows contracts to be interpreted if the language is vague, but interpretation means it may not be enforced as one party intended. It means more litigation and an opportunity for a judge or jury to interpret the agreement as they think it should have been written. Sometimes, language is so vague that it cannot be interpreted, and it is ignored. Do not assume what a prenup means. Have it reviewed by a lawyer. If you’re married, explain to a lawyer what you intended, or thought the vague language meant.

10. Statute of Limitations

Texas family code §4.008 puts all statutes of limitations on hold during the marriage, but specifically permits equitable defenses that limit the time for certain enforcements, such as laches and estoppel. These can limit enforcement of part of a prenup when justice requires. Laches requires: (1) unreasonable delay by one having legal or equitable rights in asserting them and (2) a good faith change in position by another to his detriment because of the delay. This must be decided on a case by case basis.

It’s not easy to attack a properly written and executed prenup. Besides reading the documents carefully, a creative lawyer must explore all aspects of how the prenup was presented, negotiated, and signed.