In the context of marriage, especially in high-asset divorces, financial circumstances can evolve in unexpected ways. Understanding how these changes might impact a prenuptial agreement is essential for maintaining fairness and balance.
Changes in income or assets
A major change in financial circumstances is a common reason for challenging prenuptial agreements. If one spouse’s income significantly increases or decreases, it could affect the fairness of the agreement. For example, if one spouse becomes wealthy or faces financial hardship, the agreement might no longer seem balanced.
The courts will review whether the agreement still meets the needs of both parties. They require full financial disclosure when creating a prenuptial agreement, and undisclosed changes may affect its validity.
Failure to update the agreement
If the involved parties don’t update a prenuptial agreement to reflect changes in assets or income, the court will question its fairness. New assets, such as a business or inheritance, may require updates to the agreement. If the prenup includes spousal support terms, it should account for potential changes in the standard of living during the marriage.
Unconscionability
It’s possible to contest prenuptial agreements if they are unjust, which means they were unfair to one party from the start or because of changes in the parties’ lives. The court may declare the agreement invalid if upholding it puts one spouse at financial risk while benefiting the other. The state requires that both parties enter prenups voluntarily and cannot be unconscionable at signing.
Navigating financial shifts in prenuptial agreements
As financial landscapes change, it’s important to consider how these shifts might influence the terms of a prenuptial agreement in high-value divorces. When significant changes occur, being proactive and mindful of the evolving situation can help ensure that both parties get treated equitably.
