What goes into making a valid prenuptial agreement?

On behalf of Stange Law Firm, PC posted in High Asset Divorce on Thursday, November 12, 2015.

A prenuptial agreement is a contract under Missouri law but due to their potential for abuse it has some distinctions from ordinary contracts. This post will cover some of the considerations for prospective spouses to consider when contemplating entering into a prenuptial agreement.

The criteria for a valid prenuptial agreement is that it must be entered into “freely, fairly, knowingly, understanding, in good faith and with full disclosure.” Missouri courts determine whether these elements have been complied with by examining factors such as the access to legal counsel by both parties, their bargaining positions, whether all assets are fully disclosed and how much time was available to make changes to the agreement. All of these elements should be viewed as of the time the agreement was made, instead of when a party may seek to enforce it.

Similar to regular contract law, a prenuptial agreement entered into under coercion or duress will be invalid. Missouri courts will also examine the adequacy of consideration between the parties when they enter into such an agreement, and a great disparity in consideration may give rise to a presumption of fraud, concealment or unconscionability.

A distinction from regular contract bodies that appeals courts in this state use the “abuse of discretion” standard when reviewing lower court decisions concerning the enforcement of prenuptial agreements. What this means is that an appeal of the trial court decision enforcing a prenuptial agreement will only be overruled under the abuse of discretion standard if the trial court’s decision is so arbitrary or unreasonable as to indicate indifference and lack of proper judicial consideration.

Although prenuptial agreements are enforceable in Missouri, to avoid or at least reduce the risk of such an agreement being challenged as being unconscionable it should be drafted with the assistance of legal counsel experienced in this state’s system of family law and contracts and how they relate to property division in a divorce.

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