When Prenups Fail

Prenups are touted as a particularly useful tool for high-net-worth individuals, small-business owners or folks entering a second marriage, particularly if they have children from the first one. And they can be. But prenups aren't always as rock solid as one may assume. In some cases, a spouse can challenge the prenup during a divorce and get the court to overthrow it.

The number of prenup challenges is on the rise, according to a recent survey by the American Academy of Matrimonial Lawyers (AAML): 44% of the respondents said they've seen an increase over the last five years, compared with 18% who said they've seen a decrease. (The rest reported no change.)

Although the grounds that a spouse may use to challenge a prenup vary by state — and if you're planning on signing a prenup you're best off working with a qualified attorney who's fully versed in your state's laws — some rules apply across the board. Here are six.

"If your prenup attempts to determine ahead of time who gets custody and how much support is going to be paid to the children, forget it," she says. "It probably won't even be looked at." Even if your kids were born before you got married, if there is a battle over custody or the amount of child support, the courts will decide what's best for the children.

"In order for the prenup to be valid, both parties need to enter into it freely and voluntarily," says Nihara Choudhri, author of "What to Do Before the I Do: The Modern Couple's Guide to Marriage, Money and Pre-nups."

That's one reason why the partners should start talking about a prenup well before their wedding day. "It's much better to have it done two months or a month before the wedding than two weeks or a week before," says Frederic Siegel, a divorce attorney with Fitzmaurice & Siegel in Stanford, Conn. "Then you eliminate the argument that one of the spouses was under duress or they didn't have time to consider it." In fact, he adds, these days some couples actually videotape the signing of the document, so if the prenup is challenged, there's evidence that both sides knew what they were doing.

How do the courts determine fairness? To start with, they would likely question prenups that appear lopsided, says Arlene Dubin, a divorce lawyer in New York and author of the book "Prenups for Lovers." If one spouse earns or owns a lot less than the other, and in the prenup waives the lesser-earner's rights to spousal support, for example, the document may be considered unfair.

And assessing fairness at the time of divorce can be even more confusing, says Katherine Stoner, author of "Prenuptial Agreements: How to Write a Fair and Lasting Contract." Say, for example, that both spouses worked before they got married and had a prenup that gave each their share of earnings during the marriage. At some point, the wife was disabled and stopped working, so the husband became the main breadwinner. In that case, the court could overturn the prenup and grant the wife a larger alimony, Stoner says.

In all, fairness is a gray area, says DivorceNet.com's Sooho. She cites two cases in Maryland that were very similar in nature — the wives appealed the prenups that waived their right to alimony — but had very different outcomes. One judge decided alimony waivers were fine and upheld the prenup, the other voided it. When it comes to prenup appeals, "there's a lot of discretion on the part of the judges," Sooho says.

Steven Spielberg learned this the hard way back in 1989, when his former wife Amy Irving contested their prenup. The agreement had been signed on a napkin, without the presence of Irving's attorney. Ultimately, she walked away with $100 million, or half of her ex-husband's earnings.