Why is the enforceability of pre-nups challenged so often?

[astro]

There always seems to be some story in the news where the divorcing wife of some celebrity or other wealthy person is seeking to have a pre-nup overturned.

I always thought pre-nups were pretty hard core contracts and it would usually be an expensive waste of legal time to challenge them. What can (typically) cause them to become unenforceable?

[Muffin]

A change in the law.
A change in societal norms.
Not really understanding the deal when it was made.
Being under undue pressure when the deal was made.
The original deal being unfair.
A material change in circumstances, or circumstances arising that were not forseen in the original deal, or were not adequately dealt with in the original deal.
Confusion of terms.
Contradiction of terms.
Government policy on any particular issue.
Anything to do with the best interets of a child.
And on, and on, and on.

Essentially, the court has to balance what is fair and reasonable against the need for stability and the right to contract.

[Two_and_a_Half_Inches_of_Fun]

@astro

I always thought pre-nups were pretty hard core contracts and it would usually be an expensive waste of legal time to challenge them. What can (typically) cause them to become unenforceable?

Unconscionably is a big one. Voluntariness is another. Hiding assets before the pre-nup was signed.

Choice of law issues may be in play.

This has some more information:

http://www.divorcemag.com/articles/Financial_Planning/agreement.html

[Acsenray]

Contracts are the subject of disputes in court all the time, even “hard core” ones. There’s nothing unusual about that. Challenges of prenuptial agreements are just considered more interesting, especially if there are celebrities involved. That’s why you hear about them so often.

If a prenup is more likely to be challenged than other kinds of contracts (and I don’t know that it is), it’s because there’s a lot of personal stuff at stake. It’s not because prenups are more vulnerable than other “hard core” contracts. It’s not the hardness of the core of the contract that makes it more or less likely to be challenged, but rather how much is at stake for the parties.

[muldoonthief]

Plus, the emotions involved in a divorce, especially one involving cheating, can lead to sub-optimal decision making. So challenging a solid pre-nup might not be in the aggrieved party’s best interest, but he/she’ll do it anyway just to stick it to the spouse. Somewhat less likely in a contract involving purchase & service of factory equipment.

[Really_Not_All_That_Bright]

@muldoonthief

Plus, the emotions involved in a divorce, especially one involving cheating, can lead to sub-optimal decision making. So challenging a solid pre-nup might not be in the aggrieved party’s best interest, but he/she’ll do it anyway just to stick it to the spouse. Somewhat less likely in a contract involving purchase & service of factory equipment.

This.

Most contracts are between two institutions - businesses, or whatever - or between an institution and a single individual. Pre-nups are unusual in that they are between two people, with the accompanying increase in personal issues (lack of knowledge of the law, deceit, duress, etc.)

[Gfactor]

@astro

I always thought pre-nups were pretty hard core contracts and it would usually be an expensive waste of legal time to challenge them. What can (typically) cause them to become unenforceable?

Reasons why prenup litigation happens:

1. You’re already in court–probate or divorce, so it’s not like you’re saving a bunch of money on legal fees by not fighting it. Moreover, the incremental cost is fairly low–the issue will probably be resolved either as part of a bigger trial or on a motion or evidentiary hearing.
2. The stakes are often high. Poor folk don’t usually get prenups, and the difference between the amount which the challenging party would get under the prenup and under the prevailing rules without a prenup can be very large.

Reasons why prenups are not “hard core” contracts.

1. Many jurisdictions impose complicated requirements on prenups and the standards are often pretty mushy. Here is a discussion of the standard in Ohio:

Judicial scrutiny of antenuptial agreements (or Prenuptial Agreement)has been concentrated in two areas:

1. The substantive economic terms of the property division and support, and
2. The fairness of the circumstances surrounding the execution.

Many Courts have stated that this is not an arms-length transaction since the parties share an intimate relationship which affects caution which would otherwise be exercised. This increases risk and the potential that one party will take advantage of the other. Some Courts have described it as a fiduciary relationship requiring good faith and frankness.

Circumstances Surrounding Execution

Courts look at various factors in determining the validity of the agreement. As I have mentioned, circumstances surrounding the execution of the agreement are critical. In Zimmie, the factors were as follows:

1. one day before the wedding;

2. hadn’t discussed it;

3. didn’t read it all;

4. signed it in the office of the attorney for her intended spouse;

5. didn’t have her own counsel;

6. claims she didn’t understand it;

7. testified she was pressured into signing.

   Courts will look at such things as:

   1. the complexity of the agreement;

   2. the extent and disparity in assets brought into the marriage by each party;

   3. the parties’
      # sophistication
      # education;
      # employment;
      # experience;
      # prior marriages;
      # ability to read and understand;

   time available to reflect after first seeing; and the most often mentioned and often given greatest weight factor is the complaining parties’ access to independent counsel prior to signing.

http://www.josephandjoseph.com/Article13.html

And Michigan:

However, while antenuptial agreements are not void ab initio, certain standards of fairness must be satisfied in order to find an antenuptial agreement valid and enforceable. Rinvelt, supra at 380, quoting Brooks v Brooks, 733 P2d 1044, 1049 (Alas, 1987). Thus, in deciding whether an antenuptial agreement is enforceable, a trial court must consider (1) whether the agreement wasobtained through fraud, duress or mistake, or misrepresentation or nondisclosure of material fact, (2) whether the agreement was unconscionable when executed, and (3) whether the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable.

http://www.michbar.org/opinions/appeals/2001/120401/13152.pdf

Courts seldom consider the “fairness” of ordinary contracts. And even when they do, they do so with a relatively jaundiced eye.

2. They don’t get reviewed by run-of-the-mill trial courts. Instead, it’s usually a probate or family court judge who reviews a prenup.

In other words, they get challenged because its worth it and because challenges are encouraged by the applicable legal standards and the judges who apply them.

[ralph124c]

Q:Why is the enforceability of pre-nups challenged so often?
A: MONEY!! As with all contracts, the three determinants (offer, acceptance, consideration) all can be endlessly argued and litigated.
Conclusion: big bucks for the lawyers, huge 9potential) rewards for the challengers!
My question: when a jillionaire (like kirk Kirkorian) wants out of a prenup, does he usually wind up losing?

[Muffin]

@ralph124c

Q:Why is the enforceability of pre-nups challenged so often?
. . .
Conclusion: big bucks for the lawyers, huge 9potential)?

Nope.

[Rhythmdvl]

@ralph124c

Q:Why is the enforceability of pre-nups challenged so often?
A: MONEY!! As with all contracts, the three determinants (offer, acceptance, consideration) all can be endlessly argued and litigated.
Conclusion: big bucks for the lawyers, huge 9potential) rewards for the challengers!
My question: when a jillionaire (like kirk Kirkorian) wants out of a prenup, does he usually wind up losing?

TOMA – I think most states’ Bar Associations prohibit an attorney from taking a divorce an interest in the outcome of a divorce. There may be quirky exceptions and the odd state, but I think the rules are there to (try) and prevent an attorney from having a personal/fiscal interest in the dissolution of a marriage.

Does fairness require more than a missed chance? That is, in the run of the mill case, does the gulf between Rich and Poor generally come into play absent Rich’s own actions? If Rich marries Poor and the prenup leaves the spouse cold, but that’s about it (no hiding, no shenannagins), that would SUCK for poor, but not be unfair.

Is unfair closer to not-yet-rich signing with always-been-poor, then getting rich? Would you spit out a couple non-celebrity examples?

[astro]

@ralph124c

Q:Why is the enforceability of pre-nups challenged so often?
A: MONEY!! As with all contracts, the three determinants (offer, acceptance, consideration) all can be endlessly argued and litigated.
Conclusion: big bucks for the lawyers, huge 9potential) rewards for the challengers!
My question: when a jillionaire (like kirk Kirkorian) wants out of a prenup, does he usually wind up losing?

I’ve never heard of the wealthier partner wanting “out” of the pre-nup. It’s almost always the less wealthy one (often the wife but not always) that wants to break it and have state’s community property laws apply.