What is this I hear about a “Voided Prenup?”

Jan 28, 2021 | Finances, Prenuptial Agreements

Before you undergo the time, money, and effort to create a prenuptial agreement (prenup) for your upcoming marriage, it’s important to have a general understanding of what could end up “voiding” your prenup. Although a popular term, people seem to mean an unenforceable prenup when they state a “void” prenup. Before we delve into what could make your prenup unenforceable, let’s start with the basic concept of exactly what a prenup is.

What’s a prenup, exactly?

A prenup is a type of contract between future spouses that can only be created between a couple who plans to be married. This contract must be created before the date of the actual wedding (hence the ‘pre’ in prenup) and basically lays out what will and will not be considered marital estate in the case of a divorce. This sort of contract can save couples thousands (in some cases even tens or hundreds of thousands) of dollars in costs for divorce proceedings and lost assets if a marriage does end in divorce.

The list of benefits of getting a prenup is a long one, and of course, the benefits can vary depending on specific financial situations. While some prenups may protect one spouse from inheriting the other’s debt, other prenups might protect an individual’s investment accounts, or determine alimony or lump sum payments that are different than the state’s default divorce laws. Either way, the beauty of prenups is that thanks to the wide variety of clauses (also known as prenup provisions) that can be added to a prenup to make it more custom to the couple, these legal documents are designed to be as unique as your own marriage.

What happens during a divorce without a prenup?

The short answer is….. a lot. Though prenups are assuredly growing in popularity (especially amongst the millennial population)  the benefits of a prenup are realized in ways that are yet to be seen. Most importantly, a prenup allows couples to circumvent their state’s divorce laws to decide on provisions that satisfy their individual needs, rather than what their state laws mandate. We will say it another way – without a prenup to spell out how assets will be split up, divorces are left up to the divorce laws of your state, and all too often end up involved in long, drawn-out divorce court trials that can be both financially and emotionally taxing for everyone involved. More specifically, each state either subscribes to ‘equitable division’ or ‘community property’ when it comes to property division during a divorce. There are significantly more states that subscribe to the equitable division side of things, than to community property (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin). While we aren’t here to get into the nitty gritty of how divorce law operates in each state (and remember, each state is different, so ya know, we aren’t going to bore you with a novel on this subject).

But here is the ‘reader’s digest version’ (any 90’s kids here?) In community property states, very generally speaking, any property that is accumulated during the marriage is split in half. Also generally, all gifts or inheritances granted to either spouse remain the property of each individual spouse, and the same goes for property that was acquired by an individual before the marriage or after separation. While exceptions exist, community property states generally allow couples to keep their separate assets just that, separate. Again, this is the very, very general definition of community property, and can vary greatly from state to state depending on how each state interprets community property in their state divorce statutes.

Alternatively, in equitable distribution states, the splitting up of assets is deemed “fair” by the court, but this division does not necessarily have to be equal. In many cases, individuals may be granted a certain percentage worth of an asset, or even have property that should be categorized as separate, pulled in to make the settlement “fair.” Again, this is the *very* general definition of equitable division, and can vary widely from state to state depending on how each ‘equitable division’ state interprets such in their state divorce statutes.

If a couple chooses to create a prenuptial agreement, they have the freedom to agree on how they wish to divide the entirety of their marital estate, the state will not have to step in, and the divorce may never have to undergo these sorts of drawn out division and distribution processes. When agreed upon, a prenup can lessen the likelihood a couple will ever having to leave the division of property up to the laws of a state. Instead, having these important “what if “ conversations prior to marriage allows couples to decide the fate of their property in the event of a divorce.

Now that you are aware of the various legislation surrounding divorce settlements, as well as a handful of the myriad of benefits associated with prenups, back to our original question; can a prenup ever be voided or in normal language, unenforceable? The answer is yes, like virtually ever other contract in existence, it absolutely can be. While in general, you’ll commonly hear contracts referred to as being voided or declared “null and void”, it’s important to note that the term that you’re more likely to hear associated with prenups that are declared invalid is unenforceable. But, how does this happen, and what provisions can you take while drafting your prenup to prevent this sort of situation?

What are reasons that a prenup may not be able to be enforced in a court of law?

While unfortunately there are many issues that could make a prenup unenforceable, we’ll run through some of the common ones.

The prenup doesn’t meet state requirements.

Much like every state differs with respect to divorce law, each state also has their own quirks and requirements relating to what make a prenup enforceable in that state. This is exactly why it is not advised to go the route of obtaining a “one size fits all” prenup. Chances are, you will end up with a prenup that is not conducive to the rules of your particular state. Our advice to ensure your prenup meets state requirements? Simple enough – do the research! To get the most reliable answer possible, it is best to take your questions to an attorney which, though expensive, can save you thousands in the long-run if they effectively prevent you from creating an unenforceable prenup.

HelloPrenup currently can create prenups in the states of New Jersey, Massachusetts, and New York. The site was crated with the prenuptial agreement requirements of New York, new Jersey and Massachusetts in mind. HelloPrenup’s service is currently geared towards these three states at an affordable base rate, but don’t worry- we are adding more states soon!

The prenup lacks “full and fair disclosure.”

Federal prenup law doesn’t exist, but full and fair disclosure is a common requirement among most states that you may want to consider it a necessity for an enforceable prenup. Full and fair disclosure of finances simply requires that each individual disclose all of their assets and income in the prenup at the time that it is drafted. If it comes to light that any assets or income streams were not mentioned in the prenup the prenup could be deemed unenforceable.

One party was forced into the agreement.

Sure, being forced into a prenup right before your wedding might sound like the stuff of movies, but this is a legitimate concern in many states. Let’s say that during the divorce, one party tries to claim that they were forced into signing the prenup the night before the wedding. As it now may be years after the contract was signed, this will be an extremely hard claim to prove, and might get tossed out. Claims of coercion could include things like blackmail, threats, or just undue/excess pressure. Many states no longer consider a prenup being signed the night before the wedding to be considered coercion. Some states, like California, do consider this unacceptable, and state requirements for a valid prenuptial agreement include signing at least 7 days before the wedding. HelloPrenup employs software that is focused, above all, on collaboration and open communication. We firmly believe that the prenup drafting process should be something that brings couples together, and set them up for a successful marriage in which money is not thought of as a taboo topic.

Now… back to California prenups. Being wary of coercion, the state of California only acknowledges prenups that were signed at least seven days (one week) before the wedding. Additionally, California in particular requires that the couple had an opportunity to obtain legal counsel regarding their prenup, prior to signing. So, what exactly constitutes as coercion or undue influence with prenups heavily varies from state to state. Laws like these are exactly why it’s best practice to create and sign a prenup well before your wedding day, and why utilizing a reliable site like HelloPrenup is advantageous.

So – moral of the story? A legal document like a prenup is something that you’ll want to ensure has the best chance of enforcement…. Should you ever need it (and hopefully you wont!) HelloPrenup offers prenuptial agreements for the states of New York, New Jersey, and Massachusetts, at an affordable price. For more on the process, visit our How It Works page.

This blog is for informational purposes only. HelloPrenup, LLC (“HelloPrenup”) makes no representations as to the accuracy or completeness of any information on this site. HelloPrenup will not be liable for any errors or omissions in this information nor for the availability of this information. These terms and conditions of use are subject to change at any time and without notice. HelloPrenup provides a platform for legal self-help. The information provided by HelloPrenup along with the content on our website related to legal matters (“Information”) is provided for your private use and does not constitute legal advice. We do not review any information you provide us for legal accuracy or sufficiency, draw legal conclusions, provide opinions about your selection of forms, or apply the law to the facts of your situation. If you need legal advice for a specific problem, you should consult with a licensed attorney. Neither HelloPrenup nor any information provided by Hello Prenup is a substitute for legal advice from a qualified attorney licensed to practice in an appropriate jurisdiction.

 

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