Atlanta Divorce Attorney Blog

The Supreme Court of Georgia recently heard an appeal of a divorce case, which highlights the security, or risk (depending on which side you are on), of entering into a prenuptial agreement in Georgia. Sides v. Sides, S11F1140 (2011). In that case, the parties began dating in 1989 and, shortly thereafter, the Wife became pregnant. Id. Due to the great disparity in assets and income between the parties, they negotiated and signed a prenuptial agreement before marrying in 1990. Id. Under the agreement, “Wife would have been entitled to substantially more resources if the parties divorced after their twenty-year anniversary, and substantially less if the parties divorced prior to their twenty year anniversary.” Id. at 2. Nearly twenty years later, the Husband filed a Compliant for Divorce and Motion to Enforce the Prenuptial Agreement, which the trial court granted a mere 62 days prior to the couple’s twenty year anniversary, and the WIfe appealed. Id.

The Supreme Court of Georgia affirmed the enforcement of the prenuptial agreement. The Court first laid out the factors to be considered by the trial court in deciding the validity of the prenuptial agreement: “(1) [W]as the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts? (2) [I]s the agreement unconscionable? (3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?” Id., quoting Scherer v. Scherer, 249 Ga. 635, 641 (3) (1982).

In this case, both attorneys “deposed that they would not have allowed their clients to enter the agreement without full financial disclosures being made,” and Wife was long aware of the “vast disparity” between their incomes. Id. at 3. Thus, the evidence supported that full financial disclosures were made prior to signing and the agreement was not unconscionable. In addition, the increase in Husband’s net worth was anticipated and, therefore, it was not a “change of circumstance that would make the enforcement of the agreement unfair and unreasonable.” Id. at 4. The trial court, thus, did not abuse its discretion in upholding the prenuptial agreement.

In this weekly installment of An Atlanta Divorce Attorney’s Thoughts on Celebrity Divorce, I will discuss the ongoing divorce action of the owner of the Los Angeles Dodgers. As you may have read in the New York Times or other news outlets, the owner of the Los Angeles Dodgers is going through a divorce, putting ownership of the Major League Baseball team in dispute. The key to this case is a post-nuptial agreement, of which there are two versions – one version gives the team to the husband/owner and the other version makes the parties joint owners of the team. The owner’s wife is asking that the agreement be thrown out and is alleging that the version giving complete ownership of the team to her husband was obtained fraudulently. If the agreement is thrown out, the team will be divided with the parties’ other assets under California’s community property law.

If this case was in Georgia and the agreement was invalidated, the team would be equitably divided. As explained in detail in previous blogs, equitable division does not necessarily mean equal. The judge would consider all the circumstances in deciding how (or if) to divide the team. Thus, the outcome of the case could be much different in Georgia than in it would be in California, where the parties would each receive 50% of the team. Closing arguments were recently completed and the judge now has 90 days to decide the fate of the parties and the Los Angeles Dodgers. It will be interesting to see how this one turns out.

Prenuptial contracts, or antenuptial agreements, are made to protect you in case of divorce and are not just for those with substantial assets. There has been a renewed interest in prenups recently because many people want to protect the financial security he/she built prior to the marriage. It can also rule out alimony ahead of time as well as liability for your soon-to-be spouse’s debt. It is a good idea to use a prenup as a way to discuss the important financial topics before you get married, including each of your financial expectations for what the other will be responsible for, such as substantial pre marital debt, keeping a family business separate property, retirement accrued before the marriage and after or even to preclude alimony ahead of time.

Keep the following in mind:

• You should leave at least 6-12 months before your wedding to talk about and agree to the terms of the prenup which can be thrown out if it is entered into too close to the wedding date.

• Contrary to what some believe, prenups are enforceable in Georgia. Be careful though, because each state can be different. What is okay in Georgia may not be the case in another state.

• You should have an attorney for each party, but in case you do not, the attorney drafting the prenup can only represent and give legal advice to one party. The unrepresented party will have to sign an acknowledgement stating the refusal of representation. Also, each person should pay for his/her attorney.

• You will need to attach an itemized statement or spreadsheet of the assets and debts you want to include in the prenup for each person. This is important because there must be a full disclosure of assets for a valid prenup.

• If you have assets prior to the marriage (retirement, stocks, house, etc), the balance or value prior to the marriage is considered separate property. It is a good idea to have statements and/or appraisals done just prior to the wedding date to set the premarital value.

• If you have substantial liquid assets, consider keeping what you already have prior to the marriage in a separate account with only your name on it. Keep in mind that when you shift money from your separate account into a joint account, you are likely “gifting” that money into the marriage.

An ante-nuptial agreement (commonly referred to as a pre-nuptial agreement or “pre-nup”, according to O.C.G.A. § 19-3-62, is a contract into which a couple enters prior to marriage, which divides his or her assets in case the couple’s marriage ends in divorce. Many people usually associate pre-nups with the rich and famous or the wealthy, but anyone can obtain a pre-nup in Georgia regardless of their wealth and assets. Typically, each party will keep the assets that he or she had prior to the marriage and the division of assets is detailed in the pre-nup. One party usually keeps all of their money and assets that he or she had prior to the marriage and the other party keeps theirs. It basically says what is mine is mine and what is yours is yours. Also, if the marriage does end in divorce, the pre-nup will detail what (if any) alimony or assets the other spouse is entitled to receive.

The only enforceable clauses in a pre-nup deal with the parties’ assets. Recently, family law attorneys throughout the country have seen a new trend in pre-nups. Couples now want to add health-related clauses, such as how much weight his or her spouse can gain during the marriage or when they will have their first child. For instance, a man may want to add a clause that states his wife is only allowed to gain a certain number of pounds during their marriage and if she gains any more than the allotted amount, then she will be subject to monetary penalties. Not only are clauses like this unusual (to say the least), but health related clauses are not enforceable in the State of Georgia. The only clauses in pre-nups that are enforceable in Georgia are the ones dealing with money and/or assets of the parties.