The validity of a prenuptial agreement (or, technically, “antenuptial agreement”) has two components: (1) procedural fairness; and (2) substantive fairness. If a Court finds that the agreement is either procedurally or substantively unfair, it can invalidate part or all of the agreement.
Procedural fairness relates to whether the agreement came about as the result of a fair process. I have discussed the procedural fairness of a prenuptial agreement in another blog post [link to other blog post].
Regarding the substantive fairness of a prenuptial agreement, a court will typically look at several factors, including:
- The parties’ expectations at the time the agreement was signed as compared to how circumstances turned out later at the time of enforcement. Unexpected events that dramatically change the financial circumstances of one or both of the parties may be a basis for finding that a prenuptial agreement is substantively unfair. For this reason, it is a good idea to list any major changes in financial circumstances that the parties foresee, such as major inheritances, career changes, or whether one party plans to leave the workforce to provide care for children.
- The parties’ intentions and purpose in entering into a prenuptial agreement. If, for example, the parties intend to shield their respective non-marital interests or foreclose the possibility of spousal maintenance, it would be best to state those goals in the documents. A court may use these statements of purpose as a guide for interpreting the agreement in the event of a conflict.
- The proportion of assets owned by each party at the time of the marriage as compared to the proportion of assets that would be owned by each party as a result of the prenuptial agreement at the time of enforcement. For example, if party A entered the marriage owning $10,000 of assets and party B entered owning $90,000 of assets, the proportion of asset ownership is 10% for A and 90% for B. If the agreement would result in party A having $30,000 and party B having $270,000, that would still be the same proportion, and may be viewed by the court as an indicator that the agreement is substantively fair.