Will the Court Throw Out Your Prenup?
Prenuptial agreements are gradually becoming more common among high net worth couples, and the days when people thought of getting one as insulting or selfish are long past. Now, it seems almost expected, as couples have learned how helpful it can be in case the marriage sours.
Having a prenup in place does not automatically guarantee the safety of your assets, however. Many people do not realize that it is still possible for their spouse to contest the prenup. The court has the right to dismiss the agreement if it finds the terms unconscionable. This often leaves one party in a much more vulnerable position.
What usually render a prenuptial agreement invalid, and how do you avoid this outcome?
- Fraudulent claims – A prenup requires full disclosure of all assets. When either party misrepresents their wealth, this is grounds for having the contract thrown out. Never attempt to hide assets during the negotiations, or else you may end up paying for it later on.
- Improper filing – Careless mistakes create loopholes in the provisions that the other spouse can abuse, or it can even make the entire contract invalid. Remember that this is a legal contract, and every word used is crucial.
- Coercion – It is quite common for one spouse to threaten to call off the wedding unless the other signs a prenup. This type of coercion is somewhat difficult to prove, but a general rule is that any prenup signed a short time before the wedding is suspect. A prenup is also invalid if one party was not of sound mind when signing it.
- No legal representation – Both parties must have their own legal counsel during the negotiations to prevent bias. Unfortunately, this is one of the most common mistakes made by couples. To protect each party’s interests and ensure the prenup holds up in court, make sure that both of you have competent representation.
- Unfair terms – Finally, the prenup may simply have provisions that are ridiculous, excessive, or otherwise unenforceable. No judge will uphold heavily lopsided terms that obviously favor one party, so it is important that you know what can and cannot be included in the contract.
When prepared and used correctly, a prenuptial agreement is the best way to protect your interests during a complex divorce. If you need assistance, don’t hesitate to give us a call at any time.