Prenuptial agreements can help you protect your assets in case of a divorce. If, like an increasing number of American couples, you have entered into a prenup, you may be counting on its provisions to save your business or other important assets from division.
However, if a court finds your prenup or some of its provisions invalid, it may refuse to enforce all or part of it. Having an attorney review your agreement can help you identify likely challenges and figure out alternative strategies.
Under Georgia law, there can be three reasons a court may find a technically valid prenup unenforceable:
1. One party signed the agreement because of a material mistake or because the other used fraud, duress or material misrepresentation to obtain the signature;
2. The terms of the agreement are unconscionable;
3. Circumstances have altered to the degree that it would be highly unfair to enforce the agreement.
Fraud and duress
Interpreting these requirements and applying them to a particular case can be a complex process. In terms of fraud and duress, courts often look at whether each party had the opportunity to have an independent lawyer review the document and give advice. Failing to completely disclose one's financial situation can lead to accusations of fraud. In some situations, there may be no fraud even when one party failed to disclose.
An unfair agreement can still be conscionable. However, courts are more likely to see unconscionability when the terms are extremely one-sided. They are less likely to do so when the agreement protects certain assets or income streams while still providing for an adequate division or support amount. In addition, this can also depend on whether the other spouse has other means of support; an agreement is more likely to be unconscionable if it leaves the other spouse essentially with nothing.
Changed circumstances that would lead a court to decline to enforce a prenup typically include health problems or some other change that affects a spouse's ability to earn money. Changes that were clearly foreseeable at the time of the agreement are less likely to qualify.