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What Makes a Prenuptial Agreement "Unconscionable"?

Posted by Unknown | Jun 24, 2020 | 0 Comments

According to the Merriam-Webster dictionary, the term “unconscionable” means: 1) not guided or controlled by guidance; 2) shockingly unfair or unjust.  In the context of family law, it's usually the second definition that's at the heart of most contentious divorce cases, especially those involving property and alimony disputes.  Considering that about 40 to 50% of first time marriages end in divorce, and rates being even higher for subsequent marriages, many couples take preemptive action in the form of prenups, formally known as prenuptial agreements.  

While a prenup seems like a simple agreement of who-gets-what, those who have gone through the process know that it's much more complicated.  First, each party must fully disclose their financial circumstances, including all their financial accounts and physical assets, as well as their debts and liabilities.  Second, it must be shown that neither party entered into the agreement under duress, or through fraudulent means.  Third, each party has to receive counsel on the terms of the agreement, and sign the agreement voluntarily after a reasonable period of time to consider their options.  Finally, the agreement must not be unconscionable, or grossly unfair based on the couple's lifestyle during the course of the marriage.

Unconscionability in reference to a prenup is often misunderstood, possibly due to misconceptions over “equitable distribution”, which means a fair, but not necessarily equal division.  Hence, a conscionable prenup does not split the assets 50/50, nor does it guarantee the dependent spouse a specific amount of support based on the lifestyle he or she enjoyed during the marriage.  In short, a family court judge is likely to enforce a prenup as long as it does not leave the dependent spouse destitute or living a significantly substandard quality of life.  

There are, of course, many unique circumstances that would  need to be evaluated on a case-by-case basis.  Take, for example, the 2010 case of Potts v. Potts, which was decided by the Missouri Court of Appeals.  The couple had initially agreed to a prenup which allowed each spouse to acquire separate properties during the course of the marriage by titling and holding the properties in his or her name only.  This would have worked out great, but unfortunately, Mrs. Potts was a stay at home mother during the course of the marriage, while Mr. Potts ran a successful business.  In addition to the business, which he had before the marriage, Mr. Potts was able to convert some of the earnings into separate properties, thereby giving him substantial holdings while Mrs. Potts had no opportunity to accrue anything in her name.  Both the trial and appellate courts found the prenup to be unconscionable as it would leave her with virtually nothing.  Other cases are not so clear cut, but Potts does illustrate the importance of drafting a fair settlement agreement that is likely to hold up in the family courts.  For more information, or assistance with drafting a prenuptial agreement, please speak with the experienced attorneys of Villani & DeLuca, P.C.  

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Vincent DeLuca, Esq.

As a founding partner at Villani & DeLuca, Vincent DeLuca is one of only a few Certified Matrimonial Law Attorney in Ocean County, New Jersey. Mr. DeLuca has helped many clients navigate the delicate details of their own divorce. Mr. DeLuca is also a trained divorce mediator and collaborative divorce attorney. Call today at (732) 751-4991 to speak to Mr. DeLuca or one of our experienced NJ Divorce Lawyers.