What Happens If You Sign Prenup and Get Divorced?

The importance of an enforceable and legally sound prenup becomes vitally important should you ever file for divorce. Read on to learn more.

Understanding Prenups

A prenup is a legal contract signed by two people before their marriage. Areas that are often covered in prenups include:

• The division of property
• Asset ownership
• Inheritance agreements
• Alimony agreements
• The distribution of gifts
• Tax responsibilities
• Ownership of pets
• In some cases, even infidelity!

Making Sure You Get an Enforceable and Legally Valid Prenup

You have to ensure your prenup is legally binding. While some states, California and Minnesota are just two examples have individual laws to follow when creating a prenup – let’s review the most frequent stated requirements in the majority of states:

• The agreement must be in written form and signed (without coercion) by each party and must not be unconscionable in nature. Note in some states at least two witnesses also have to witness the signing of the prenup agreement
• The document should be notarized. Although this is only mandatory in a small number of states, it is generally recommended
• Both parties must provide a degree of financial disclosure
• The prenup must not contradict current law or be illegal in any shape or form.

When Divorce Happens

You lived in marital bliss for a few years after signing the prenuptial agreement and adhering to all state prenuptial laws. Unfortunately, you are now facing the intimidating “D” word because you and your partner have become more distant. What takes place? There are two possible outcomes for your situation:

Path A: You and your spouse accept the conditions stated in the prenuptial agreement. Despite your distaste for the terms, you either have no reason to dispute them or are not inclined to do so.
Path B: One or both of you want to contest the prenuptial agreement for a valid reason because you disagree with its terms.
You will have a smooth sailing experience if you choose Path A. You and your spouse will adhere to the conditions specified in your contract, and your assets, alimony, and other issues will be resolved in accordance with those terms.

If you choose option B, you will need to either take the matter to court for a judge to decide or try to resolve any prenuptial disputes with your spouse through negotiation. As an illustration, suppose that John and Sarah have a prenuptial agreement that states that John is exempt from paying Sarah alimony. Sarah chooses to “fight” the prenuptial agreement because she wants alimony during the divorce. She now wants to argue that she signed it under duress, that it is unreasonable, that it is unconscionable, etc. The state’s laws will determine what she argues about having the clause or prenuptial agreement revoked. Remember that you cannot arbitrarily dispute a prenuptial agreement. To challenge the legality or enforceability of the contract, there must be a good reason.

John is now presented with two choices. Option 1: In order to avoid going to court, he could try to make a deal with Sarah and her attorneys. He could offer her more assets in the property division or pay her a lump sum. Alternatively, he could allow her to take her claim to court so that a judge can plan. Option 2 is typically more time-consuming, costly, stressful, and tedious. As you can imagine, it’s not easy to file a claim in a divorce court to enforce (or have thrown out) a prenuptial agreement. Additionally, it may result in higher legal bills for the attorneys attempting to challenge or defend the prenuptial agreement.

Do Prenups Get Thrown Out?

It is not common for prenups to be thrown out in courts. Generally, courts tend to uphold the status of an existing prenup not least of all because it lessens the work of the court and the amount of time a judge has to spend on a case. As long as the prenup is enforceable where you live, there should be no unforeseen problems.

Asset Division

Let’s illustrate with an example. Suppose your prenuptial agreement states:

John’s house, boat, and car are his separate property, while Sarah’s condo, jewelry, and art collection are hers. Their marital residence will be considered marital property and will be divided in accordance with state default law.

John and Sarah will each retain their separate property if the prenuptial agreement is upheld. Since the marital residence is regarded as marital property, it is the only item that can be divided. This implies that the division of the house will be determined by the default laws of the state in which they are divorcing. It depends on whether it is liquidated and the proceeds are divided or if one person takes the house and gives the other person a lump sum payment to offset the value. Additionally, state laws and the circumstances will determine whether the split is 50/50 or some other combination.

Recall that the United States has two frameworks for property division: equitable distribution and community property. This house will be divided 50/50 if you reside in a state where community property is allowed. Living in a state with equitable distribution means that the house will be divided “equitably,” which may not always be 50/50 based on the situation and state regulations.

Are Prenups Always An Equal Divide?

There is no automatic equal spit in a prenup. As long as it is legal, splits of everything can be weighed one way or the other. A court will not declare a prenup invalid on the sole basis it is not a fifty-fifty slit of everything.