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4 Reasons Your Prenup Is Probably Worthless (Sorry!)

Photo: people.com
4 Reasons Your Prenup Is Probably Worthless (Sorry!)
Heartbreak

Although a prenup is a legal document, there are some defensible grounds for revoking it.

Five months after his death, Alan Thicke's widow, Tanya Callau, is claiming that the prenuptial agreement that she signed before marrying him in 2005 is now invalid, according to People Magazine. Alan's sons, Brennan and Robin Thicke are co-trustees of the late actor's living trust and are taking her to court over the claims.

"Tanya asserts that there is no chance the ‘Prenup’ could withstand legal challenge and that she has very significant community rights in the Trust’s assets and rights of reimbursement with respect to improvements to the Ranch. Tanya also claims ‘Marvin rights’ asserting that she had to forego opportunities to pursue and advance her own career in order to support Alan and be his companion and partner, including raising Carter," says the petition filed by the two brothers and their attorney.

The brothers also claim that Callau had agreed to all the terms of the prenup prior to signing it.

Before two people decide to say, "I do", some couples opt for a prenuptial agreement. This legally binding contract describes what each spouse is supposed to receive, should the marriage end in divorce. It can take into consideration the property brought into the marriage — and acquired during it.

Although a prenup is a legal document, there are some defensible grounds for revoking it. Here are four reasons why a

Here are four reasons why a prenup may not protect you by knowing when it is enforceable and when it is not:

1. There was no written agreement.

In order to be enforced, prenuptial agreements must be signed by both parties. If the prenuptial document consists of ambiguous wording, it can be contested in court.

Verbal agreements are not legally binding. The premarital agreement must always be in written form with four signed copies, which are retained by each spouse and each party’s lawyer.

2. There was no independent counsel.

With separate interests at stake, each spouse must be legally represented by his or her own legal counsel in order for a prenup to be valid. One attorney cannot represent both spouses’ interests.

It is each attorney’s responsibility to ensure that his or her client completely understands the prenuptial agreement (and all of its provisions) prior to voluntarily signing the document. Failure to do so can void the prenuptial agreement, should the marriage end in divorce.

On the mere grounds that a spouse recommended an attorney to his or her partner, some prenups have been deemed irrelevant by a court. Preferably, each spouse should seek his or her own counsel and should be individually responsible for paying attorney fees.

3. There was insufficient time to review. 

In the event that a spouse was not given enough time to consider the prenup before signing it, it may not be enforceable.

For instance, if a spouse was intimidated or pressured into signing the prenup minutes before walking down the aisle, it may not be binding. Some states mandate a specific number of days—for the spouse receiving the prenup to read and review it.

A premarital agreement should be signed at least one month before the wedding. To err on the side of caution, the more time given, the better. It is then the recipient’s responsibility to carefully and thoroughly read the document (with his or her attorney present) to help guide and answer any questions that may arise.

4. There is evidence of false financial information.

Prenups are only valid if both parties fully disclose their income, assets, and liabilities. If one spouse fails to provide accurate information, it can result in a prenuptial pitfall.

All relevant information must be disclosed in the written document. Each spouse must know the extent of his or her partner’s finances before signing the agreement.

It is important for the couple to exchange current, individual net-worth statements. If a spouse lies about his or her assets or only discloses part of them, a divorce court could terminate the prenuptial agreement.

In several divorce cases, the court has ruled that a spouse was fraudulently induced into signing a prenup. Spouses should always avoid any fraud-related issues by fully disclosing financial information.

When the appropriate steps are followed, a prenuptial agreement allows each spouse to protect his or her assets and financial stability. Should a couple decide to untie the knot, the prenuptial agreement’s purpose is to eliminate any confusion when dividing assets.

However, without a written agreement, independent counsel, ample time, and the full disclosure of both parties, the prenup can very well be found invalid by a judge. By taking the necessary precautions, you can ensure that your prenuptial agreement is upheld.

Shawn Leamon, MBA, CDFA is the host of the "Divorce and Your Money Show" and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire. 

This article was originally published at Divorce and Your Money. Reprinted with permission from the author.

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