What Can Make a Premarital Agreement Invalid?

 Posted on September 28, 2018 in Family Law

Spouses are bound to the terms of their premarital agreement when they decide to divorce. A court may rule that the agreement is unenforceable if:

• One of the parties did not sign it voluntarily;
• One of the parties did not reasonably disclose his or her individual assets;
• The agreement terms were unfair at the time that the agreement was created;
• One of the parties' circumstances changed in a way that could not be foreseen and makes the agreement unfair; or
• The agreement determines child support and the allocation of parental responsibilities, which it is not allowed to do.

In the recent case of In re Marriage of Woodrum, an Illinois woman argued that her premarital agreement was unconscionable. The court rejected her argument because it found no evidence that the agreement was unfair or invalid.

Case Details

The spouses in the case had cohabitated for six years prior to their marriage in 2007. Having both previously divorced, they signed a premarital agreement that stated:

• They had no claim to each other’s non-marital property prior to the marriage;
• None of the properties purchased during the marriage would be marital properties; and
• They waived their rights to spousal maintenance because both spouses were self-sufficient.

When the husband petitioned for divorce in 2015, the wife was no longer working and financially dependent on the husband. She claimed that the premarital agreement was invalid because her husband had not disclosed key assets in the agreement, including business and land ownership.

Disclosure Requirements

Parties creating a prenuptial agreement must make a fair and reasonable disclosure of their assets but not necessarily a full disclosure. In the recent case, the court ruled that the wife had failed to prove that the husband's disclosure was not fair and reasonable because:

• She had sufficient knowledge of his assets through his written disclosure and by living with him for six years before marriage; and
• There is no evidence that the husband is receiving any monetary value from the assets he did not disclose.

Unconscionability

A premarital agreement can be procedurally unconscionable or substantively unconscionable:

• Procedural unconscionability is when someone is misled to the point that he or she cannot make an informed decision; and
• Substantive unconscionability is when an agreement inordinately favors one side.

The wife argued that the agreement was procedurally unconscionable because she did not have adequate legal representation when signing the agreement. The husband had hired the lawyer who represented her, but she claimed she was unaware that the man was her lawyer. The court rejected this argument because the wife had ample opportunity to review the agreement and hire her own lawyer. The wife also argued for substantive unconscionability because of her financial reliance on her husband. The court rejected this argument because the terms of the agreement were fair and her circumstances had not changed in an unforeseen way since she signed the agreement. She had already started decreasing her work hours when she signed the agreement.

Proper Review

You should never be pressured into signing a premarital agreement that you do not understand or believe is fair. A Kane County family law attorney at Geneva Family Lawyers can review your agreement and advise you on whether to sign it. Schedule a free consultation by calling 331-588-6611.

Source:

http://www.illinoiscourts.gov/Opinions/AppellateCourt/2018/3rdDistrict/3170369.pdf