Prenuptial Agreements

by William Jorden on May 24, 2011

by Harry Faber White, II, Esquire

In Pennsylvania, prenuptial agreements are binding and enforceable if certain requirements are followed. Defenses to the enforceability of a prenuptial agreement are somewhat limited.

Agreements between parties who are married to each other are presumed to be valid. Prenuptial Agreements are contracts, and as such are evaluated by Pennsylvania courts under the same criteria as are applicable to other types of contracts.

Persons to be married are free to enter into bargains which they may later regret, and bad deals are just as enforceable as good deals, provided the agreement is free of fraud and duress. It is also necessary that the parties make a full disclosure of their respective financial resources to each other. Disclosure is mandatory and in those cases where prenuptial agreements are overturned by the courts, incomplete disclosure is generally the cause.

If the prenuptial agreement states that full and fair disclosure of each party’s respective financial conditions occurred, then full disclosure is presumed. There is case law to the effect that disclosure need not be in writing, but obviously oral disclosure leaves one vulnerable to a later claim that full disclosure was not made.

While prenuptial agreements often include specific asset lists, so there can be no argument later that there was inadequate disclosure, Pennsylvania Courts say that the lack of specific asset lists is not sufficient grounds for finding that there has been no full and fair disclosure.

Other Pennsylvania Courts have said that disclosure need not be scientifically accurate, but it must be precise enough so as not to obscure the general financial resources of the party. An appraisal of an asset is not required, but there must be an opportunity to obtain one if desired.

A prenuptial agreement involving Erie businessman, Lou Porreco, was not overturned by the Pennsylvania Supreme Court for fraudulent misrepresentation, even though he gave his wife a fake diamond ring, but claimed it was worth $21,000.00 in the prenuptial agreement, because the court held that Mrs. Porreco had the opportunity to have it appraised if she had so desired.

Importantly, the prenuptial agreement does not need to set forth the statutory rights that the parties are relinquishing. Those statutory rights arise under the Divorce Code and the Probate Estate and Fiduciaries Code. The Pennsylvania Supreme Court has held that a spouse may enforce a prenuptial agreement without any demonstration that the statutory rights have been disclosed at all.

Thus, the most important ingredient of a successful prenuptial agreement is disclosure of assets and liabilities. The two major defenses to the enforceability of a prenuptial agreement are thus, lack of disclosure and duress. Fraudulent misrepresentation is a lesser alleged defense.

Duress has a very significant standard and requires “that degree of restraint or danger, either actually inflicted or threatened and impending, which is sufficient in severity or apprehension to overcome the mind of a person of ordinary firmness.”

Pennsylvania Courts have held that the threat to call off a wedding, unless the prenuptial agreement was signed, where the proposed wife was eighteen years old, three months pregnant, unemployed and frightened, was found not sufficient to constitute duress.

Prenuptial agreements are not invalid because one of the parties did not have individual counsel. The Superior Court recently held that the requirement to have counsel would be contrary to traditional principals of contract law. It would constitute a paternalistic and unwanted interference with the parties’ freedom to enter into contracts.

Finally, since the Simeone Case was decided by the Pennsylvania Supreme Court in 1990, the Courts have consistently refused to look at the fairness or reasonableness of the prenuptial bargain. Before Simeone, the agreement had to be reasonable to be enforceable.

There are many reasons persons want their would-be spouse to sign prenuptial agreements, some good, some bad. If you or a family member feels a prenuptial agreement is necessary, you should discuss your concerns with your would-be spouse as soon as possible, and don’t wait until the day before the wedding.

I have seen many instances where a would-be spouse is handed a prenuptial agreement several days before the wedding, and asked to sign. That approach can be devastating to many would-be spouses because it has a serious economic effect on them, and also, a serious emotional effect.

Some think that requiring a would-be spouse to sign a prenuptial is a not-so-subtle statement that the requesting spouse does not trust the signing spouse. Others think a prenuptial agreement is prudent planning to avoid future problems, or to protect family businesses and/or assets from prior marriages.

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