In Remillard v. Remillard, the wife moved from Arkansas, where she was a loan officer, to live with her husband in Virginia prior to their wedding day. In return for leaving her career and selling her home, her husband promised to take care of her, in part by giving her a job working for his business in managing rental properties. As time goes by, the rental property business grows substantially, but the wife was never given a formal ownership interest in the properties or the business.
On the afternoon before their wedding day, the husband presented her with a prenuptial agreement, saying that he would not marry her the next day unless she signed it. The agreement stated that each person would retain their personal assets, including assets and earnings acquired during the marriage. It also stated that each person disclosed a “full and complete” account of their personal finances, which did not actually happen. In fact, the wife did not have a proper picture of her husband’s $10 million worth of assets until a year into their marriage. Without time to consult an attorney, the wife signed the agreement.
Under Virginia law, a prenuptial agreement is unenforceable if it was “unconscionable” at the time it was signed. One way a court deems a prenuptial agreement unenforceable is when one person was not provided a fair picture of the other persons’ financials. The court also uses a two-part test to determine whether an agreement was unconscionable: The court will examine whether: (1) There was a gross disparity in the division of assets; and (2) There was an overreaching or oppressive influence that made one party sign the agreement when they otherwise probably would not have.
The Court found that: (1) The husband did not properly disclose his finances; (2) The agreement was heavily slanted in the husband’s favor by not giving the wife any value from the rental property business; and (3) By waiting until the day before the wedding and threatening to not go through with the marriage, the husband put the wife under duress to sign the agreement. The husband argued that the wife should have been aware of his high net. worth given her involvement in his business, but the Court did not find this argument persuasive against any of the final findings of the case. Full disclosure at the time of signing a prenuptial agreement requires an actual and accurate financial disclosure by both parties. Given these factors, the court ruled that the prenuptial agreement was unenforceable.
Bottom line, we have our clients typically attach a complete financial statement to our Virginia prenuptial agreements and ensure they are presented and signed well before any wedding date, without duress or undue influence. When done this way, it is very likely that a Virginia court will not find a prenuptial agreement is unconscionable. The most important issues a court will consider when deciding whether a prenuptial agreement was unconscionable are: (1) whether there was overreach and undue influence (duress) to induce one party into signing the prenuptial agreement; and (2) whether the agreement was agreed to without disclosure that the outcome of the agreement created a huge imbalance between the parties. If the court finds the agreement was unconscionable, then the prenuptial agreement is unenforceable. However, these arguments cannot be made if you fully disclose your assets from the beginning and do not rush this process. In fact, prenuptial agreements are allowed to seem one-sided if both parties follow the proper process for disclosing financials and allow for plenty of time to sign the agreement before the wedding.
We here at Smith Strong include full disclosure as common practice in all of our prenuptial agreements. These, among many other strategies we regularly use, help avoid prenuptial agreement unenforceability in the future. If you would like assistance in creating your prenuptial agreement, please call one of our offices at 804-325-1245 (Richmond) or 757-941-4298 (Williamsburg) to discuss your options. One of our attorneys can meet with you by zoom, phone, or in-person meeting.
Special Thanks to Brayden Meadows for his assistance with this article.