Court Attitudes Toward Premarital Agreements
Previous posts regarding premarital agreements have discussed what a premarital agreement is, and why an engaged couple might want to sign one. Simply summarized, a premarital agreement is a good idea when both parties want to change the rules of law that would otherwise apply when their marriage terminates upon divorce or death.
Assuming that the parties agree to sign a premarital agreement, is a premarital agreement likely to be enforced by the courts?
There is no single answer to this question, because there are many different types of agreements and many different procedures that can be used to sign one. Before discussing premarital agreements further, it is useful to consider these agreements briefly from the viewpoint of a judge who is asked to decide these issues in a divorce or probate case.
Most trial judges have very busy dockets, and they are grateful for anything that reduces their workload. Premarital agreements resolve issues that would otherwise have to be decided by judges. Judges also often note that an agreement between the parties usually resolves an issue better than the judge could, as the parties themselves are more familiar with their situation and their financial lives than a judge could ever be. Most judges therefore like premarital agreements, and tend to enforce them as they are written.
This was not always so. Before the 1970s, judges tended to believe that premarital agreements encouraged divorce and to treat them with suspicion. But the modern view is that whether a marriage succeeds or fails has very little to do with the presence of a premarital agreement. The key event adopting this viewpoint in North Carolina was the adoption in 1987 of the Uniform Premarital Agreement Act, which adopts the modern view that premarital agreements do not inherently encourage divorce.
But there is a very important qualification on the attitude of judges toward premarital agreements. Judges like to see issues resolved out of court, but they also like to see issues resolved fairly. When a premarital agreement reaches an unfair result, there is a conflict between the judge’s tendency to favor out-of-court settlements and the judge’s tendency to favor fair results. The result of this conflict determines whether the court enforces the agreement.
In thinking about the fairness of premarital agreements, judges tend to draw a significant distinction between procedural and substantive unfairness. If the agreement is procedurally unfair—that is, if there is reason to question whether both parties made truly voluntary and informed decisions to sign the agreement—fairness tends to assume a greater role, and the court is more likely to seriously question the agreement.
Conversely, if the agreement was voluntarily signed, the substantive fairness of the agreement tends to play a much smaller role. The fact that a party voluntarily agreed to a bad bargain is usually not, in itself, a reason not to enforce an agreement. The rule may be otherwise if the agreement creates severe financial disparity, especially if it leaves one party on public assistance. But normally, judges care a lot more about procedural unfairness than they do about substantive unfairness.