Sunday, August 23, 2009

Prenuptial Agreements Part Two: How enforceable are prenuptial agreements in Georgia?
Question: How enforceable are prenuptial agreements in Georgia?

Answer: The trend has been that prenuptial agreements are becoming more and more enforceable in Georgia. That said, the best way to improve the likelihood that a prenuptial agreement will be enforceable in Georgia is understanding how Georgia courts view prenuptial agreements before entering into one.

In Georgia, the enforceability of prenuptial agreements has been a matter of public policy since 1982. Scherer v. Scherer, 249 Ga. 635, 641 (1982). At that time, the Georgia Supreme Court established this three-step test for determining the enforceability to prenuptial agreement:

1. Was the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts?

2. Is the agreement unconscionable?

3. Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?

Scherer, 249 Ga. at 641.

The first step tells us that it is important to disclose income and assets to your future spouse in the agreement and make sure your representations are complete and honest. Although it is important not to exert undue pressure about signing a prenuptial agreement, simply stating that you will not marry if the document is not signed, in and of itself, is not enough duress to make the document unenforceable. Mallen v. Mallen, 280 Ga. 43 (2005).

With regard to the second step, you may ask how Georgia courts define the term “unconscionable.” Under Georgia law, an unconscionable contract is one “abhorrent to good morals and conscience where one of the parties takes a fraudulent advantage of another.” William J. Cooney, P.C. v. Rowland, 240 Ga. App. 703, 704 (1999). Prenuptial agreements are often between two parties of very different financial status. Essentially, in the second step, courts are examining whether the document, when it was written, creates an extremely unfair result. This does not necessarily mean that the parties must leave the marriage with a more equivalent financial status than when they first married. If the agreement perpetuates an already existing difference in financial status that, in and of itself, will not make an agreement unconscionable. Mallen v. Mallen, 280 Ga. At 47.

The third step focuses on the circumstances at the time the agreement is being enforced and looks at whether those circumstances were reasonably foreseeable. Curry v. Curry, 260 Ga. 302 304 (1990). The best way to prepare for this step is to include in the document a statement about certain circumstances that are foreseeable, such as future children and job loss and other financial difficulties.

Although the trend in Georgia is toward enforcing prenuptial agreements, there’s no real substitute for having an attorney that specializes in domestic matters guide you in creating an enforceable document.

As shown above, a trial court can split custody of minor children if it finds that same is in the best interests of the children.

Written by Stern & Edlin Lawyer, Carla M. Schiff.
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