Divorce – Case Law Update – Prenuptial Agreements
On September 21, 2016, the Oregon Court of Appeals issued an opinion regarding the enforceability of prenuptial agreements. In Porter and Porter, 281 Or App 169 (2016), the trial court found that the prenuptial agreement was unenforceable and Husband appealed. The Court of Appeals reviewed the relevant factors to determine whether a prenuptial agreement is enforceable, which are as follows:
1. the proximity of the document’s presentation to the time of the wedding;
2. any surprise in its presentation;
3. the presence or absence of legal counsel;
4. inequality of bargaining power;
5. disclosure of assets;
6. understanding of rights waived; and
7. awareness of the intent of the document.
In the underlying case, the evidence established that before the parties discussed marriage, Husband, who had been married twice before, told Wife that he was having his attorney prepare a prenuptial agreement in the event that the parties decided to get married. Wife told Husband she had never heard of a prenuptial agreement and Husband explained that it is something people sign before they get married and he wanted to make sure Wife was not in the relationship for Husband’s money.
The parties did not discuss the prenup further until December 24, 2002. At that time, the parties were running errands and Husband pulled up to a bank, explaining that they were going to sign the prenup. Husband presented Wife with the document to sign and notarize. That was the first time Wife saw the agreement or the list of Husband’s assets attached, and she did not understand much of the agreement. She trusted Husband and believed, based on Husband’s explanation of prenuptial agreements, that the document was “rather insignificant.” After the agreement was signed, Husband sent a copy to his attorney. The parties got engaged that evening and were married four months later.
An appeal, Husband correctly noted that the party seeking to negate the prenuptial agreement bears the burden of proving it was not executed voluntarily or was unconscionable. ORS 108.725. Nevertheless, the Court of Appeals found that the agreement in this case was not executed voluntarily. The Court explained that the following factors contributed to its decision:
1. Wife was less sophisticated than Husband in matters of this nature. She was born in Germany and, while she was fluent in English, it was not her first language. Further, she lacked personal experience with divorces in the United States.
2. The parties never discussed the specific terms of the agreement.
3. Wife did not understand the agreement’s legal significance or practical effect.
4. Wife did not have sufficient time at the signing to become educated as to the effect of the agreement.
Based on the above, the Court of Appeals affirmed the trial court’s ruling that the prenuptial agreement was unenforceable.