Are Prenuptial Agreements enforceable in Georgia? (Part I of a II Part Series)
It seems that whenever a client calls to inquire about a prenuptial agreement (also known as an antenuptial agreement), that their initial concern is whether such an agreement will hold up under judicial scrutiny. Recent case law answers this question with a resounding “yes”… as long as the agreement is drafted prudently by a knowledgeable attorney.
Until 1982, prenuptial agreements were rejected by Georgia courts as a matter of law because they were deemed to be contrary to public policy. This changed with the landmark Georgia Supreme Court decision of Scherer v. Scherer, in which the Court held that due to certain undeniable changes in societal norms (i.e., the advent of “no fault divorce” and the increased percentage of marriages ending in divorce), the Court could no longer justify this strict rule invalidating all prenuptial agreements. Instead, the Court determined that persons may establish their rights by contract prior to marriage as long as certain prerequisites are met. These prerequisites are referred to as the “Scherer factors” or the “Scherer test.”
The Scherer factors for Prenuptial Agreements in Georgia are:
- Was the prenuptial agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts?
- Is the agreement unconscionable?
- Have the facts and circumstances changed since the agreement was executed so as to make its enforcement unfair and unreasonable (and were any changes in circumstances foreseeable)?
While these factors may seem daunting upon initial review, case law has appeared to prove over time that courts will review the factors with an eye towards enforcing the agreement as long as a “full and fair” disclosure of the parties’ financial condition (including income) is made prior to execution of the agreement. The Georgia Supreme Court has even suggested that a “fairly simple and effective method of proving disclosure is to attach a net worth schedule of assets, liabilities, and income to the agreement itself.”
In other words, it appears that the most important step in making sure the prenuptial agreement will be enforceable down the road is to make sure that before signing the agreement, you can prove that both parties had a “general idea of the character and extent of the financial assets and income of the other.” If this is done properly, then it would be rather difficult for a party to later make a persuasive argument for fraud, duress, mistake, nondisclosure, misrepresentation, unconscionability, or unreasonableness.
In particular, it is worth pointing out here that the burden to show duress or unconscionability is especially high in our state. For duress, the law is well-settled that the mere fact that one party insists on a prenuptial agreement as a condition of marriage does not constitute duress that would void an agreement. Contrarily, to succeed on a claim of duress, a party would have to show threats of bodily or other harm, or other forms of coercion that would actually overcome the mind and will of the other person and induce him or her to sign the agreement contrary to his or her own free will.
Further, in order to show that a contract is unconscionable, a party would have to show that the prenuptial agreement between the parties is one that “no sane person not acting under a delusion would make and that no honest person would take advantage of.” In this regard, it has been specifically held that a prenuptial agreement will not be rendered unconscionable just because it perpetuates an already existing disparity in the financial condition of the parties prior to marriage.
