If an unhappy marriage can be messy, divorce can be even messier. If you're
entering a high-net-worth marriage, will your
prenup hold up in court?
We'll tell you this much, it's better to get your prenup right,
otherwise, don't do it at all. If a prenup isn't drafted correctly,
you can waste money when you created it, and you can waste money when
you have to fight it in court later.
Can a prenup be challenged in court? Absolutely. All you have to do is
look at the number of high-profile cases where the courts ruled in favor
of the non-moneyed spouse, despite the existence of a prenuptial agreement.
A perfect example – actress Amy Irving, Steven Spielberg's first
wife. In 1989, she successfully challenged the validity of their prenup
and reportedly walked away with $100 million.
Ivana Trump, ex-wife of Donald Trump is another example. After challenging
their prenup in 1991, she reportedly received $350,000 a year in alimony,
$20 million, and their $14 million dollar family estate, which was far
more than what their original prenup provided for.
Potential Challenges to a Prenup
There are many reasons why a prenup may be vulnerable to a legal challenge,
and why it may not end up doing what it was intended to do – outline
the terms of spousal support and property division in the event of a
divorce, instead of being settled in court.
While the laws vary from state to state, generally, judges won't uphold
the terms of a prenup unless both parties were represented by attorneys.
Also, no state will honor a prenup that limits child support, or one parent's
child custody or visitation rights.
Additionally, judges in all states will disregard a prenup if one of the
spouses failed to disclose all of their financial assets and debts, or
if one spouse provided fraudulent financial information.
Don't ask your fiancé to sign a prenup just before your wedding
ceremony. If you do that, the court would consider that they only signed
out of embarrassment in front of family or friends.
Instead, start negotiations about six months before the wedding date, and
have everything signed before you send out the invitations.
For further advice on drafting a prenuptial agreement,
contact Claery & Green, LLP!