As always, please review my disclaimer before reading this post by either following the link above or by clicking on this link. As always, legal principles discussed apply only to the Commonwealth of Virginia.
Introduction
The unfortunate reality of today's world is that nearly half of all marriages end in divorce (the percentage has been on a downswing lately, but it's still well north of 40%). While it may not be what you want to think about when you are beginning your married life with someone you full well believe will be your partner the rest of your life, understanding the high probability of divorce may allow you to protect yourself. If you have substantial assets, anticipate a substantial difference in income, or really have any long term concerns about your marriage, a pre-marital agreement (colloquially known as a "prenup" or "prenuptial agreement") may be the right path for you.
Pre-marital agreements are recognized to some extent or another in all 50 states. That being said, there are limitations on pre-marital agreements, and important rules that need to be followed.
Law Governing Pre-Marital Agreements
For a long time there was a great deal of confusion in Virginia about how a court should treat pre-marital agreements. Should they be treated just as a contract, subject to all contractual defenses? As a result, should a prenup still be applicable if the marriage lasts a prolonged period? What about if the prenup turns out to be horribly unfair to one party or the other?
Conflicts in the courts over how to treat pre-marital agreements led to Virginia adopting in the 1980's the Premarital Agreement Act, which is codified in Virginia Code Sections 20-147 through 20-155, and remains largely unchanged from its original enactment. The law chose a hybrid approach to pre-marital agreements, treating them as not entirely contractual and subject to all contract rules, but not entirely immune from contract laws either. Moreover, the law specifically prescribes what can be covered by a pre-marital agreement, creating the legal presumption that if something is not covered by the Premarital Agreement Act, then it cannot be covered by a Premarital Agreement.
Matters a Premarital Agreement Can Address
The list of matters that a premarital agreement can cover is contained in Virginia Code Section 20-150. The list includes property rights, spousal support (alimony), wills and trusts, life insurance rights, choice of law, and any other matter "not in violation of public policy or a statute imposing a criminal penalty."
So, that last provision may sound like a catch-all, but it's really not. The courts have construed this provision, in light of the nature of other provisions in the section, to still limit premarital agreements to essentially issues of property and money.
So, what does this mean a premarital agreement can do? Well, it can say how any property either of you brings into the marriage will be dealt with, regardless of whether the other does anything with the property during the marriage. It can say how property acquired during the marriage will be dealt with. It can say how much spousal support either party may get in the case of a divorce (including none, or including making it dependent on how long the marriage lasts) and for how long. It can make rules about how a divorce affects your wills and life insurance. It can even make rules for how your divorce is governed (if you are religious, for example, maybe you want your divorce governed under the rules of your religion, instead of state law - just be aware a state court will not enforce any provision that actually violates someone's constitutional rights).
Matters a Premarital Agreement Cannot Address
The short answer to this header is "children." You can certainly put whatever you want to in the premarital agreement regarding custody, visitation and child support in the case of divorce, but if you go to a judge and seek to have it enforced, be ready for the judge to laugh in your face. Custody, visitation and child support are, in theory, based on "the best interests of the child," and no judge is going to accept that you knew what those best interests were before you even got married. As a result, a custody, visitation or child support agreement in a premarital agreement is completely unenforceable unless a judge makes an independent determination that the arrangement is in the child's best interests.
Other matters that cannot be included in premarital agreements include prohibitions on re-marriage (except in the context of terminating spousal support upon re-marriage), rules forcing a person to stay part or become part of a religion, post-marital sexual restraints on a person, post-marital restrictions on where a person may live, and similar matters.
Defenses Against Application of a Premarital Agreement
While occasionally courts deal with cases that are arguments over construction of premarital agreements, oftentimes a legal dispute over a prenup involves one party trying to enforce the agreement and the other trying to have the agreement nullified. There are some defenses to the enforcement of a premarital agreement, but the Premarital Agreement Act favors premarital agreements, and as such, those defenses are limited, and frequently an uphill climb.
As I said before, premarital agreement law is quasi-contractual. That means some traditional contract defenses apply, but some do not. For example, the statute of frauds applies, and in fact is even stronger than the typical statute of frauds - in other words, a premarital agreement must be in writing, a verbal or implied premarital agreement is unenforceable. A lack of consideration (a contract defense that says a contract is invalid unless both parties get a benefit [such as receiving money or goods] and suffer a detriment [such as paying money or giving up goods] from the contract) is specifically not allowed as a defense to premarital agreements.
Also, as you might expect, the contract defenses of duress (that you did not sign the contract voluntarily) and illegality of the terms of the contract are defenses. On the other hand, the statute of limitations, while a defense, is tolled (as in, does not run) while you are married, so a breach of the agreement only becomes unenforceable if you have already been divorced at least five years (the statute of limitations on breaches of written contracts).
The final major defense is unconscionability - probably the most common attack on a prenup. Unconscionability is a contract defense that says due to a combination of unfairness in how the contract was drafted and signed, as well as unfairness of its results, the contract should not be enforced. Unconscionability, however, is only sort of a defense to a prenup. In order for the unconscionability defense to succeed, the party attacking the agreement must not only prove that the prenup is unconscionable, but also that at the time of signing the prenup the party was not provided a fair and reasonable disclosure of the property or financial obligations of the other party and that the party did not voluntarily and expressly waive, in writing, that party's right to the disclosure.
In short, prenups are very hard to attack, and will usually be held to be valid and enforceable.
A Note on Marital Agreements
So, what happens if you are young and idealistic and decide "you know what, this prenup thing isn't for me, I'll never get divorced," but then a year later you and your spouse come to your senses and realize it would have been helpful to have a prenup just as a fallback safety net and something to reduce your legal fees if you did get divorced? Well, you are not out of luck. In 1987, Virginia adopted the Marital Agreement Act which is codified as Virginia Code 20-155. All that the Marital Agreement Act really says is that if you sign what would otherwise be a prenup after you are already married, it is still enforceable under all the same laws and in all the same ways as a prenup. So, it's never too late (and if you hear your friends who are in a divorce talking about their "Separation Agreement" or "Property Settlement Agreement" - those too are marital agreements to which this law is applicable).
Conclusion
Pre-marital agreements can be valuable ways to protect yourself and your property in case of divorce, but there are limitations to what a pre-marital agreement can cover. Moreover, if you are considering signing one, review it closely - it's unlikely that you will later be able to challenge it successfully. If you are considering or want to draft a pre-marital agreement, or you are involved in a legal dispute involving a pre-marital agreement, please feel free to call (703)281-0134 or e-mail sleven@thebaldwinlawfirm.com to set up an initial consultation with me or another attorney in my office. Your initial consultation is free for up to half an hour!
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