Premarital Agreement Enforcement After 14 Years
Fourteen years ago, Elena and Tom signed a premarital agreement three days before their wedding. Elena had no attorney; Tom's attorney drafted the document and told Elena she could consult counsel but she did not. The agreement waives all spousal support and keeps all earnings and retirement as separate property. At signing, Elena was a 24-year-old graduate student with no assets; Tom was 41 and worth $3.2 million. Elena now earns $85,000; Tom earns $600,000. During the marriage Elena left the workforce for six years to raise their twins and took out $60,000 in student loans for a degree she completed during the marriage. Tom has moved $500,000 into a trust for the children. Elena challenges the agreement at divorce, arguing duress and unconscionability.
1. What procedural and substantive defenses must Tom overcome to enforce the agreement?
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Tom must show both procedural and substantive fairness. Procedurally, the agreement must have been voluntarily executed with full disclosure of the other party's assets and income. Elena had no counsel, only three days before the wedding, and a significant age and wealth gap; those facts support a duress or overreaching claim, though lack of counsel alone is not fatal if she was advised of the right and had time to use it. Tom should be prepared to show the disclosure schedule listed his $3.2 million and that Elena had a meaningful opportunity to review. Substantively, the court asks whether enforcement would leave Elena without a reasonable standard of living or make her a public charge. A total support waiver for a spouse who spent six years out of the workforce and now earns $85,000 against Tom's $600,000 is vulnerable. Courts increasingly refuse to enforce waivers that produce an unconscionable result at the time of enforcement, not just at signing. Tom's burden is to prove voluntariness and adequacy of disclosure; Elena's burden is to prove the result is unconscionable now.
2. How should the court treat the $60,000 student loans and the $500,000 children's trust?
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The student loans are Elena's separate debt in most community property analyses, but the community may have a reimbursement claim if community funds paid the loans or if the degree is a community asset. Here the loans are still outstanding, so the court should allocate them to Elena and consider whether her enhanced earning capacity from the degree is a community property interest subject to reimbursement to Tom. Many courts reject the degree-as-property theory but allow reimbursement for community funds spent on education; the court should trace the source of payments. The $500,000 trust is a different problem. If Tom transferred community funds into an irrevocable trust for the children without Elena's consent, the transfer may be a breach of fiduciary duty and a fraudulent transfer as to Elena's community share. The court can order an accounting, void or unwind the transfer to the extent it defeated Elena's interest, or charge the amount against Tom's share. The trust's validity as to the children is separate from whether Tom may use it to shield assets from division.