By: Lisa Marie Vari
In Pennsylvania, prenuptial and postnuptial agreements are considered contracts entered into by a man and woman, or husband and wife, which are governed by the principles of PA contract law. These agreements are entered into either before marriage to protect certain assets from the equitable distribution process, or sometimes in anticipation of separation or divorce.
One of the important issues with a prenuptial/postnuptial agreement is whether both spouses have fully and fairly disclosed all of their assets/liabilities before entering into the agreement. One spouse can waive this right to have full disclosure of the other spouse's assets and liabilities, but the waiving spouse must understand that they are waiving an important right in entering into this contractual agreement. In certain circumstances, the agreement can be set aside because it was entered into under fraud, duress, or coercion.
The PA Superior Court recently decided the case of Lugg v. Lugg, 2013 PA Super 67 (April 1, 2013) - wherein the main issue in the case was the validity of a postnuptial agreement entered into by the parties. The parties in this case entered into a postnuptial agreement that Wife attempted to have set aside by utilizing the theories of lack of disclosure of assets, duress, and unconscionability of the agreement. However, the Court rejected all of these arguments and upheld the postnuptial agreement.
The court's rationale for denying Ms. Lugg's arguments were based on the premise that she had waived her right to full disclosure in writing through correspondence with her Husband. The court determined that where this waiver was voluntary and in writing, it was valid and the agreement could be upheld, so long as there was no fraud, duress, or misrepresentation that would make the waiver invalid. Here, the court opined that there was no fraud, duress, or misrepresentation, as Wife had previously waived her right to receive full financial disclosure from Husband and this waiver was valid and was done voluntarily.
The court further stated that in this case, Wife voluntary waived her right to full financial disclosure, and there was no evidence presented of force or threat of force or any such threats to enter into the postnuptial agreement from Husband. Therefore, the standard of contractual duress was not met in this case.
The takeaway from this case is that in Pennsylvania, where a spouse has waived their right to full disclosure of assets/debts of their spouse (1) in writing and (2) voluntarily, that spouse cannot later claim that the prenuptial agreement or postnuptial agreement is invalid based on lack of disclosure of assets. Further, the waiving spouse cannot claim that an agreement should be set aside on a duress theory when no threats, force, or threats of force were used in the inducement of the agreement.
Have questions about prenuptial agreements or postnuptial agreements in Allegheny County? Contact our Pittsburgh Divorce Lawyers today!