February 28, 2013

Are Prenuptial Agreements Legal and Enforceable?

Prenuptial agreements (also referred to as antenuptial agreements) recognize the respective rights of each party in the event of the death of either party or in the event of divorce. These agreements were definitively recognized as enforceable by the Georgia Supreme Court in 1982. The Courts will recognize such agreements and the terms and provisions contained therein so long as none of the following circumstances are present:

(1) The agreement obtained through fraud, duress, or mistake;
(2) The the agreement unconscionable; or
(3) The facts and circumstances have changed since the agreement was executed so as to make its       enforcement unfair and unreasonable?

A party opposing a properly drafted prenuptial agreement has an uphill battle in Court.  I must emphasize the phrase “properly drafted”. Each party has an affirmative duty of full and fair disclosure of all material facts prior to entering into the agreement.  This essentially means that both parties must lay all of their cards on the table. The attorney preparing the agreement should ensure that this occurs.  The failure to do so presents the most common means of defeating such agreements.

Each party should disclose in the agreement his or her income, the value of the assets that he or she is bringing into the marriage and the amount of debt that he or she has coming into the marriage.  The more detail that is provided the less likely there will be a future allegation that full disclosure was not made.  Gathering all of this information can be tedious, but I won’t execute an agreement that doesn’t contain a detailed disclosure.

Quite often there is a disparity in the financial resources of the parties coming into the marriage. The party with the greater financial resources is usually the party that requests the prenuptial agreement.  I believe it to be important for the party with the greater financial resources to insist that the other party have the agreement reviewed by an independant attorney prior to signing it, and that he or she even pay the other attorney’s fees if necessary. I then recite in the agreement the name of the attorney who reviewed the agreement with the other party. It will be substantially more difficult for the contesting party to contend that the party with the greater financial resources has engaged in overreaching when both parties had access to counsel.

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