Getting Out of That Prenup You Wish You Hadn’t Signed
Ask Yourself This Question:
Was your spouse forthcoming about his income, assets, and net worth at the time you signed that prenup?
If the answer is “no,” you may wish to continue reading as you already have an argument in your favor.
Though North Carolina law provides two (2) main avenues by which to attack premarital agreements, winning under either theory is often an uphill battle as one must navigate through a host of issues.Still, you will need additional facts in order to prevail in setting the agreement aside.
The North Carolina Uniform Premarital Agreement Act (the “UPAA”) governs the enforceability of premarital agreements. N.C.G.S. §§ 52B-1, et seq. The UPAA came into effect on July 1, 1987 and is controlling as to premarital agreements executed on or after that date.
In order to avoid enforcement of a signed premarital agreement, you must prove one of two things:
(1) You “involuntarily executed” the agreement; OR
(2) The agreement was “unconscionable” when you signed it.
N.C.G.S. § 52B-7(a).
Whether or not a premarital agreement was “involuntarily executed” will involve issues beyond simply whether or not you were fully informed of your spouse’s financial condition at the time of signing. Other relevant issues are (1) whether or not you were advised by independent counsel before you signed; (2) the fairness of the agreement’s terms; (3) the degree to which your spouse deceived you or misrepresented the truth prior to signing; (4) your age, physical, and mental condition at the time you signed; (5) the extent to which you were pressured by your spouse to sign the agreement; (6) the proximity between the time you were presented with the agreement and your wedding; and (7) whether or not you closely read the document.
The analysis North Carolina courts employ in determining whether or not the agreement was involuntarily executed is a case-by-case examination based upon the totality of the circumstances. Again, the key to a successful challenge under involuntary execution is to have and present helpful facts. The more facts you are able to present, the better your chances.
In the Tiryakian v. Tiryakian case, the husband called his fiancée just one day before their wedding and asked her to meet him at his attorneys’ office to sign a premarital agreement. The wife testified at trial that she and her husband did not discuss the agreement’s specifics and that her husband told her the reason he wished to enter into the agreement was “to protect his interest in his grandmother’s estate.” (Husband’s stated reason to his future bride was less than honest).
It was later found that the wife did not carefully read the premarital agreement. She also did not consult with a lawyer of her own. Still, the wife signed the agreement and married her husband.
At trial, wife argued she entered into the agreement involuntarily while husband insisted wife’s execution was not involuntary and the agreement was fully enforceable. Based on the aforementioned facts, our Court of Appeals did not embrace husband’s argument and invalidated the agreement. Challenge successful.
Remember, before you can realistically think about setting aside your prenup under this theory, you will need to unpack the facts and circumstances surrounding the agreement’s execution.
If you signed an agreement that is so hopelessly unfair that you cannot believe your spouse even had the temerity to present it to you, then you may also wish to consider the principle of “unconscionability.” Unfortunately, getting out of an agreement based upon “unconscionability” is even thornier than using “involuntary execution.”
To start, “unconscionability” contains both a procedural and substantive component you must fulfill. In order to prove unconscionability, you must first demonstrate misconduct existed in the negotiation of the agreement (“procedural unconscionability”) while concurrently proving the terms of the agreement are grossly unfair (“substantive unconscionability”).
The procedural side of this relates to dishonest or unfair negotiating practices like fraud or coercion. On the substantive end, the moving party must show the premarital agreement is so unfair that it “shocks the judgment of a person of common sense.”
As such, if you signed a harshly inequitable agreement – so unfair that it literally “shocks the conscience” – the agreement still cannot be set aside if your spouse did not exhibit procedural misconduct in procuring your signature. (If you are reading closely, you will notice both components to unconscionability have the potential to involve many, if not all, of the issues identified in the “involuntary execution” section.)