Prenuptial Agreements

Unsurprisingly, the prospect of divorce is not often contemplated by couples during their wedding planning.  Yet, more and more Americans are entering into agreements prior to their wedding to ensure a clear separation of assets in the event of divorce. While certainly nothing new, the prenuptial agreement (or antenuptial agreement) remains the most consistently effective method for addressing these matters before any marital issues can surface and potentially spoil an agreeable outcome.  What is new, however, is the degree to which prenuptial agreements are being used.

Prenuptial agreements, commonly referred to as “prenups” are contracts that couples enter into prior to a marriage that will provide a foundation to protect the couples’ individual assets in the event of a divorce or death.   A prenup can potentially cover the division of property and accounts, require the maintenance of life insurance, reinforce rights or obligations, and even oversee the allocation of debt between spouses.

A Harris Poll conducted in 2022 suggests that the usage of prenuptial agreements is on the rise nationally.  Compared to just 3% of Americans in 2010, nearly 15% of all Americans have reportedly signed a prenuptial agreement.  A staggering 40% of those who signed are between eighteen and thirty-four.  Given that a prenuptial agreement can cover decades, or even someone’s lifetime, they should not be taken lightly. Accordingly, understanding the factors of a valid prenup and their latest legal interpretation is essential in protecting assets.

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Tennessee law mandates several requirements to ensure a prenup was entered into voluntarily and freely.  In addition to the absence of fraud or duress, Tennessee law requires the various assets, debts, and liabilities be disclosed to parties, with some degree of particularity.  One spouse’s general understanding of the other’s assets is often not enough on its own.  Further, each party to the agreement must have had opportunity to seek counsel and sufficient time to consider the prenup terms before signing.  Surprisingly, sufficiency of these factors from a legal standpoint may be far disconnected from their ordinary meaning or a party’s general understanding.

In April 2022, the Tennessee Court of Appeals heard the case Law v. Law.  At its core, the case focused on the validity of a prenup and its effect on an often considered marital asset: the family’s residence.   The Court found that though the wife was provided a copy on the eve of her wedding—something she argued placed her under duress—the presence of an attorney and time to review the document ultimately rendered the document enforceable and her losing claim to her home.  In so finding, the Court reinforced the trend in Tennessee courts to construe prenups liberally, giving them effect in most instances.

There are many factors to consider when contemplating a prenup.  These can include disparities in wealth between the spouses, either spouse possessing valuable property or a debt, or complications from a previous marriage. In all, the most important step a person can take to address the question of a prenup is to be represented by knowledgeable and experienced counsel who can protect the person’s interests.