Prior to saying, “I do,” some couples make the additional decision to enter into a premarital or prenuptial agreement. These agreements are contracts that allow couples to define their respective financial rights and interests after they become married. Without a premarital agreement, Virginia laws relating to how each person’s individually owned property can become marital property will govern. Premarital agreements can also spell out how newly acquired property and monies will be treated, rather than letting the default Virginia laws apply. In general, Virginia law will treat property and money acquired after the parties get married as marital property, absent a premarital agreement.
Virginia’s Premarital Agreement Act specifies that a premarital agreement must be in writing and signed by both parties. Va. Code § 20-149. And while these requirements are seemingly straightforward, especially when compared to other pre-wedding tasks, a 2022 opinion from the Virginia Court of Appeals serves as a cautionary lesson for couples who delay drafting a premarital agreement until shortly before the wedding because their agreement may not be upheld. Remillard v. Remillard, Va. Ct. App. No. 1063-21-2, 2022 WL 4073320 (Sep. 6, 2022) (unpublished).
In Remillard v. Remillard, the fiancé presented his soon-to-be wife with a premarital agreement on the afternoon before their 2014 wedding. Due to the timing and his insistence that the agreement had to be signed if their wedding was to be held the next day, she signed it without consulting a lawyer.
Per the terms of the Remillard’s premarital agreement, the husband and wife’s individual property, including any assets and earnings attained during their marriage, would remain his or her separate property; modifications of the agreement in the event of a change in circumstances were not allowed, and both parties waived their rights to the other spouse’s assets in the event of death or a divorce. The premarital agreement also specified that both parties “made a full and complete disclosure to the other of the property owned by him or her” at the time of signing.
During their marriage, the wife worked for her husband at his company, which, in the ensuing years, expanded and prospered. When the wife subsequently filed for divorce in 2019, she sought to have the premarital agreement set aside.
Premarital agreements are subject to the traditional analysis and rules of construction applied when interpreting any other type of contract. The Virginia Premarital Agreement Act, § 20-151(A) of the Code of Virginia, further provides that an agreement is “not enforceable if the person against whom enforcement is sought proves that: (1) That person did not execute the agreement voluntarily; or (2) The agreement was unconscionable when it was executed and, before execution of the agreement, that person (i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; and (ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.” Va. Code § 20-151(A).
In the matter at hand, the Court of Appeals affirmed the trial court’s determination that the Remillard’s premarital agreement was unenforceable.
First, both courts noted that if the Remillard agreement was, in fact, enforced, the wife would have received nothing – not even the benefits “attributable to her efforts working for husband’s business.” Moreover, prior to their wedding, the wife had already quit her prior job, sold her house, and moved from out-of-state to Virginia in anticipation of their future life together. Indeed, such gross disparity in the division of property made the Remillard’s agreement unconscionable. Thus, premarital agreements drafted with overtly or broadly one-sided and restrictive provisions are wholly counterproductive in Virginia.
Similarly, the “overreaching or oppressive influences” surrounding the wife’s execution of the premarital agreement, such as the last-minute presentation of the agreement and the husband’s assertions that their wedding the next day would not happen unless she signed it, also rendered the agreement unconscionable. Both parties should be afforded ample time to read and carefully review the agreement, as well as an opportunity to consult with an attorney, before signing.
And despite the Remillard’s premarital agreement’s assertion to the contrary, no such “full and complete” financial disclosures were ever actually made. Indeed, the accompanying exhibits to the agreement, which were purportedly his and her respective financial disclosures, remained entirely blank. While he admitted to the trial court that he had never discussed his finances with her before their wedding, the husband argued that his wife should have known, or at least been able to estimate, his wealth due to her employment at his company.
However, “fair and reasonable” disclosure of one’s financial obligations is the minimum threshold of disclosure prescribed by § 20-151(A); accordingly, general awareness, or rough estimations of the other party’s assets, is inadequate to satisfy the standard of disclosure in Virginia.
The Remillard opinion is a reminder that Virginia courts will render premarital agreements unconscionable, and therefore unenforceable, when there is gross disparity in the division of property between the parties, and oppressive or overreaching influences are present.
It is thus important to consult with an attorney and propose any premarital agreement in sufficient time and in the proper manner to maximize the chance of a court enforcing it.