What would happen under Texas divorce law if two spouses decide after years of marriage to tear up their prenup? Is that enough to invalidate the agreement?
I read with interest last week’s post from lawyer Daniel Clement of the New York Divorce Report about a New York case holding a premarital agreement valid even after the couple tore it up on their honeymoon. (See Braha v. Braha.) The couple was engaged less than three weeks when they married in 2002. The husband told his then-fiancé that his father “threatened to cut him off” if he did not have her sign a pre-nuptial agreement. According to the wife, the parties never intended for the agreement to be enforceable. Neither attempted to negotiate the agreement. While on their honeymoon, the couple ceremoniously ripped up their agreements and threw them in the ocean. The wife destroyed her original of the agreement, but, as it turns out, the husband only destroyed a copy of the agreement. He kept his original hidden away as a secret for the 12 years of their marriage. Then, when the parties divorced in 2013, he brought out his original pre-nup and sought to enforce it.
Wife claimed that the husband fraudulently induced her to sign the agreement because he led her to believe that it was being executed as a “show” for his father. She says Husband devised a plan where his attorney would draft the agreement and another attorney would represent her in the agreement. Husband’s father would review the agreement. Then, all copies would be ripped up and thrown in the ocean on the honeymoon cruise. Therefore, Wife did not pay any attention to the terms of the agreement since she believed it would be void.
Husband denied Wife’s allegations. He says he never intended to deceive his father and nullify the document. He admits they tossed away copies of the agreement on the honeymoon because they would “most certainly remain married forever”.
Like Texas, New York has a strong public policy favoring premarital agreements, and in analyzing an agreement, the law requires looking only to the four-corners of the document to determine the parties’ intent. And, like Texas, the burden is on the party trying to invalidate the agreement to prove fraud.
The court found the language in the agreement to be clear and unambiguous. The agreement contained the boilerplate provision regarding the understandings of the parties:
“This Agreement contains the entire understanding of the parties with respect to the matters set forth herein, including, without limitation, the rights of the party with respect to the property of the other party. There are no representations, warranties, promises, covenants or understandings, oral or otherwise, other than those expressly set forth herein.”
Further, the agreement contained provisions about how to modify or nullify the agreement:
“Neither this Agreement [nor] any provisions hereof, including without limitation, this article, may be altered, modified, terminated, or revoked, except by an instrument executed and acknowledged by both parties with the same formalities as this Agreement.”
Thus, under the terms of the agreement, the parties could only invalidate the agreement by a written, signed agreement. Tearing up the agreement was insufficient to invalidate the agreement.
Texas law would require a similar analysis as New York under the facts of this case. In Texas, a premarital agreement is presumed valid and only limited defenses are available to invalidate a pre-nup. One defense is that the party did not sign the agreement voluntarily. (Tex. Fam. Code §4.006(a)(1).) Typical contract defenses such as fraud are appropriately considered in the ultimate determination of voluntariness. Generally, whether a party executed an agreement voluntarily or as the result of a state of duress or coercion is a question of fact dependent upon all the circumstances and the mental effect on the party claiming involuntary execution.
Common factors considered in assessing voluntariness include:
- The level of business sophistication of the parties;
- The overall maturity level of the parties;
- The education level of the parties;
- Familiarity with premarital agreements and their impact upon martial property rights;
- The parties’ course of dealing and length of negotiation in executing the premarital agreement; and
- Each party’s use of independent counsel.
So, a Texas court would look first to the terms of the agreement for clear and unambiguous language. Then, the Texas court would evaluate the defenses to the agreement – in this case the involuntariness of the execution of the agreement – based on the facts of the case. The deck is definitely stacked against invalidation of a premarital agreement.
For more information on challenging a premarital agreement in Texas, see my blog post Dallas Court of Appeals Affirms Trial Court’s Judgment Voiding Premarital Agreement and the analysis of the Dallas Court of Appeals opinion in Moore v. Moore.
For more information about premarital agreements in Texas, see my related blog posts on Texas premarital agreements here.