US Weekly has reported that Tiger Woods and now ex-wife Elin Nordegren had a prenuptial agreement worth $300 million, which would make their divorce the most expensive in celebrity history, followed by Michal Jordan’s divorce from Juanita Jordan ($150 million) and Greg Norman’s from Laura Andrassy ($128 million).
Easy, right? Everyone knows what they are getting out of the divorce...
But is it true the prenuptial agreement will prevail if the couple does divorce? Not necessarily.
Prenuptial agreements and postnuptial agreements have been authorized in most states for quite some time. Once seen as an inducement to divorce, and thus a detriment to marriage, now most states treat them as a strength for marriage. As the Michigan Supreme Court explained, the agreements “allow couples the opportunity to ensure predictability, plan their future with more security, and, most importantly, decide their own destiny.” They are contractual, but they are not automatically enforced as written as most contracts are.
You should consult a lawyer in your state to learn the rules applicable to your case, but in some states a prenuptial agreement is unenforceable if (a) it was obtained through fraud, duress, mistake or misrepresentation, or though non-disclosure of a material fact; (b) it was unconscionable when the parties executed it; or (c) the facts and circumstances since they executed it have so changed that its enforcement would be unfair and unreasonable. The first two may be obvious, but for even lawyers the third is not. Essentially, the court can give a “second look” at the parties’ current situation and decide not to enforce the prenuptial agreement. This would be likely, for example, if one spouse contracted cancer and has extraordinary medical bills that neither spouse contemplated at the time of executing the agreement.
Nor are postnuptial agreements always enforced. Postnuptial agreements have the same general purposes as prenuptial agreements, but the parties make them after they are married. Those made when the parties intend to settle their divorce are valid and, in fact, are a favored way to resolve disputes. They are subject to general contract principles and are enforced absent fraud, duress or mutual mistake. Those made when the parties intend to stay together, however, may not be enforceable. In Michigan, for example, postnuptial agreements that dictate the terms of a divorce made when the parties are not divorcing are void on their face as against public policy because they “promote divorce.” See, e.g., Wright v Wright, 279 Mich App 291 (2008) (per curiam op).
This may seem inherently at odds with the treatment for prenuptial agreements, and many lawyers agree. Nevertheless, that is the state of the law.
If you have or are considering a prenuptial agreement or a postnuptial agreement, you should consult a lawyer to learn more about the law applicable to your specific circumstances.