Phillips & Ingrum

Pre-Nuptial Agreements, Part Two

By Grayson Cannon

Phillips-Ingrum-Headshots-15_finalIn our last post we talked about the value of having a pre-nuptial agreement and why these agreements can be beneficial.  In this installment, we’ll cover what must be contained in the agreement and the necessary circumstances to make sure it is valid and enforceable.  After all, if you’re going to go to this trouble, it should be done correctly, right?

The most important aspect of a valid pre-nuptial agreement involves the element of fairness and honest dealing with each other as soon-to-be-married partners.  Under Tennessee law, an engagement to marry creates a confidential relationship that requires the parties to treat each other with the “utmost good faith.” A valid agreement should be based upon, and ideally should contain in writing, a complete and full and honest disclosure of each other’s assets.  Since you are asking your soon-to-be spouse to waive any claim to these assets, your future spouse should be given some idea of what they are giving away rights to.  Otherwise their waiver of any interest in these assets may not be valid.  Tennessee case law allows pre-nuptial agreements to be valid without an express written disclosure of assets, only where the parties had lived together for some time prior to the marriage and had already had ample opportunity to learn what the other party owned.  As a general rule, however, the pre-nuptial agreement should contain a complete listing of each party’s assets and their values.

The agreement should also be entered into without any pressure or coercion.  It is hard enough to deal with all the planning and logistics that go into an upcoming wedding, without also being pressured to sign an important legal document that may have economic repercussions for both parties for many years to come.  Each party should have plenty of time to review the agreement and to get legal advice about its effect.  In one famous Tennessee case, the Husband, a lawyer, presented his bride-to-be with the agreement in the parking lot of the chapel as they were about to be wed; it contained no revelations about his assets and she later testified she knew nothing of his net worth.  Needless to say, a court upon his death agreed to set this pre-nuptial agreement aside allowing the widow to claim a share of his estate. While this is an extreme example, it illustrates some import aspects of a valid and enforceable agreement.

The parties’ signatures on the agreement should be notarized.  It is also preferable that each party have their own attorney, and that each party have ample time to obtain legal advice about the agreement and what it may mean.  The agreement should ideally be signed several weeks or even months before the marriage.

Next time, we will discuss more about the possible contents of a pre-nuptial agreement and how they work once a couple has married.