A VALENTINE’S DAY GUIDE TO “PRENUPS”

By Barbara Buratti, Esq.   

Ah, Valentine’s Day! The time when the thoughts of people in love turn to giving – or receiving from – their one-and-only, the most perfect red long stemmed roses, the finest chocolates, the biggest diamond, and increasingly, the most comprehensive prenuptial agreement they can find and/or afford. Marriage remains a very popular institution, with nearly every adult in the United States marrying at some point in his/her life. Staying married is another story altogether. U.S. Census Bureau data indicates that half of all marriages end in divorce, but most people who divorce do remarry. At the same time the divorce rate has been rising, the number of “prenups” among couples entering first marriages, as well as second, third, etc., has been increasing.

We’ve all seen stories about prenups among athletes, entertainers and politicians. With earnings close to $1 BILLION, Tiger Woods’ prenup reportedly limited his bride to $20 million if the marriage lasted 10 years. However, in light of recent events, the couple has reportedly renegotiated the deal to a final figure of $80 million.  

“The Donald” (Trump), himself no stranger to this situation, recently declared on “Entertainment Tonight” that “anybody with substance who gets married without a prenuptial agreement is crazy.” It’s therefore safe to assume he has had a prenup with each of his three wives. 

Britney Spears and her then-betrothed, K-Fed, reportedly had a prenup that gave the non-famous spouse only $1 million when this couple’s happily-ever-after ended. Catherine Zeta-Jones and Michael Douglas’ prenup reportedly entitles her to $2.8 million for each year the marriage remains in effect, plus a $5 million bonus if he is caught cheating. The prenup between Keith Urban and Nicole Kidman reportedly nets Urban about $640,000 for every year he is with Kidman, and includes a clause stating that if Urban uses illegal drugs, he will receive nothing. Reportedly, both John Kerry and his wife Teresa Heinz, as well as John and Cindy McCain, have prenuptial agreements.

Prenups are not just for the rich and famous anymore; couples of modest means may also wish to use them. A prenuptial agreement is a written agreement made before marriage, usually for the purpose of resolving issues of support and property division if the marriage ends in divorce or by the death of a spouse. In other words, a prenup is basically a contract that both the prospective bride and groom sign before getting married, typically stating how their money and property will be divided if they get divorced. 

Prenuptial agreements, also called antenuptial or premarital agreements, were not enforceable in much of the United States before 1970 because they were considered to be against the public policy of promoting marital stability. A 1970 Florida case marked the beginning of widespread recognition of prenups, noting that the court knew “of no community or society in which … public policy ... condemned a husband and wife to a lifetime of misery as an alternative to the opprobrium [stigma or disgrace] of divorce,” and holding that prenups were enforceable as long as they did not tend to induce separation or divorce.

Oklahoma was ahead of most of the country in enforcing prenups, which have been recognized and even favored since at least 1922. Early Oklahoma court cases involving prenups primarily focused on distribution of assets upon the death of a spouse. The evolution of the prenup made in anticipation of divorce in Oklahoma is apparent in a 1960 case, Hudson v. Hudson, which indicated that public policy was not a barrier to premarital agreements contemplating divorce. It held in a divorce action that such an agreement would be upheld by the courts if it were otherwise found to be just and reasonable. The agreement upheld in Hudson provided that if the marriage ended in divorce, neither party would claim alimony against the other, they would only claim an interest in property accumulated during the marriage, and neither would seek or claim any right, title or interest to property that the other spouse owned at the time of their marriage.    

In a 1977 case, Freeman v. Freeman, the Oklahoma Supreme Court specifically stated that “an antenuptial agreement which contemplates possible divorce is enforceable.” The Freemans merely agreed in their prenup that ownership of their respective separate property would remain separate throughout and after the marriage. Both spouses had been previously divorced and apparently entered into the agreement to avoid disputes over property in the event their marriage failed. When the marriage failed, the wife argued that the premarital agreement was unenforceable because it contemplated divorce. The court’s rejection of this argument was clear and unambiguous.

In Oklahoma, a prenup is viewed as a special kind of contract because the confidential relationship that is generally, although not always, deemed to exist between a prospective husband and wife requires the utmost good faith and a high degree of fairness.

If one spouse challenges the prenup in court, it may not be enforced if the one seeking its enforcement fails to present evidence establishing one or more of the following things: First, the prenup must make "fair and reasonable” provisions for the spouse opposing it. Second, the spouse seeking enforcement must have fully and frankly disclosed his/her monetary worth before the parties signed it. If the evidence shows neither of these conditions, the prenup may still be enforced if the spouse challenging it had a generally accurate knowledge of the other's worth. Nevertheless, the general rule applies: Unless affected by fraud, duress, coercion, overreaching, or the like, the terms of a prenup will be enforced.

Without a prenup, if divorcing spouses cannot agree on the division of their property, state law will decide for them. Entering into a prenup can set out who gets what, avoiding potential disagreements if the couple divorces. Typically, the prenup lists all property each person owns, as well as any debts, and specifies what each person’s property rights will be if the marriage ends in divorce. Prenups can be used to protect each spouse from the other’s debts, provide for children from prior marriages, and/or keep property such as heirlooms, expected future inheritances, or family business in the family. 

There are a number of things prenups cannot do. As a general rule, prenups cannot restrict child support, custody or visitation rights. No state honors agreements limiting or giving up future child support, future custody or visitation rights. 

Prenups also have disadvantages. One obvious disadvantage is that they are unromantic. It may seem inconsistent and potentially troubling to plan property distribution in the event of divorce while making plans for a wedding that will hopefully begin a lasting marriage. Whether a prenup is the right choice for any couple is, of course, for the couple to decide.

Oh and, well … Happy Valentine’s Day … or not.