Virginia Premarital Agreements: A Free Guide

Introduction

For couples considering marriage in Virginia, a premarital agreement, often called a "prenup," can be a valuable tool for financial planning and peace of mind.

While it might seem unromantic, a well-drafted premarital agreement can help protect individual assets, define financial responsibilities during marriage, and streamline the divorce process if the unthinkable occurs.

What is a Premarital Agreement?

In Virginia, premarital agreements are legally recognized and enforced under the Virginia Premarital Agreement Act, codified in Virginia Code § 20-147 et seq. This Act outlines the requirements for a valid premarital agreement and the circumstances under which such an agreement can be challenged.

Essentially, a premarital agreement is a contract entered into by prospective spouses in contemplation of marriage. It typically addresses how assets and liabilities will be divided in the event of divorce, separation, or death.

What Can a Premarital Agreement Cover?

The Virginia Premarital Agreement Act allows for a broad range of provisions to be included in a prenup, including:

• The rights and obligations of each party in any of the property of either or both of them whenever and wherever acquired or located. This includes real estate, bank accounts, investments, and personal property.
• The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property.
• The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event. This is often the most significant aspect, outlining how assets will be divided in a divorce.
• The modification or elimination of spousal support (alimony). This is a crucial area where a prenup can significantly impact future financial outcomes. However, a court may still order spousal support if the provision would leave one spouse in such a position that they would be eligible for public assistance.
• The making of a will, trust, or other arrangement to carry out the provisions of the agreement.
• The ownership rights in and disposition of the death benefit from a life insurance policy.
• The choice of law governing the construction of the agreement.
• Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

It's important to note that a premarital agreement cannot adversely affect the right of a child to support. Child support is determined by statute and is always subject to the court's discretion based on the child's best interests.

Requirements for a Valid Premarital Agreement in Virginia

For a premarital agreement to be enforceable in Virginia, several key requirements must be met:

1. In Writing and Signed: The agreement must be in writing and signed by both parties.
2. Voluntary Execution: Both parties must execute the agreement voluntarily. This means they cannot be coerced, pressured, or defrauded into signing.
3. Full and Fair Disclosure: Both parties must make a full and fair disclosure of their respective financial assets and obligations. This is a critical element, as a lack of adequate disclosure can be grounds for challenging the agreement.

Challenging a Premarital Agreement

A premarital agreement can be challenged and found unenforceable if the party seeking to invalidate it proves:

• Lack of Voluntariness: That party did not execute the agreement voluntarily.
• Unconscionability and Lack of Disclosure: The agreement was unconscionable when it was executed AND, before execution, that party:
  • Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party.
  • 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.
  • Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

Key Case Law in Virginia Regarding Premarital Agreements

Virginia courts have addressed various aspects of premarital agreements over the years. Some notable cases include:

• Galloway v. Galloway, 47 Va. App. 83 (2005): This case emphasized the importance of full and fair disclosure. The Court of Appeals held that a premarital agreement was unenforceable due to a lack of full and fair financial disclosure, even though the challenging spouse was a sophisticated businesswoman. The court found that the husband had not provided sufficient detail about his assets.

https://www.casemine.com/judgement/us/5914b5c4add7b04934774c7b

• Chapman v. Chapman, Record No. 2781-06-4 (Va. Ct. App. 2007) (unpublished): While unpublished, this case illustrates that a general statement of assets might be deemed sufficient disclosure if the challenging party had a reasonable opportunity to inquire further and a general understanding of the other party's finances. This highlights the "adequate knowledge" aspect of the statute.
• Dowling v. Dowling, Record No. 1319-15-4 (Va. Ct. App. 2016) (unpublished): This case reiterated that a premarital agreement can be deemed unconscionable if it leaves one party with virtually no assets or support while the other retains significant wealth, especially if there was also a lack of adequate financial disclosure.

Why Consider a Premarital Agreement?

• Protecting Separate Property: If you bring significant assets into the marriage (e.g., family inheritance, a business, real estate), a prenup can clearly define these as separate property, protecting them from division in a divorce.
• Defining Marital Property: While Virginia is an "equitable distribution" state, a prenup can dictate how marital property (assets acquired during the marriage) will be divided, potentially avoiding lengthy and costly litigation.
• Spousal Support (Alimony): Couples can agree to limit, waive, or define the terms of spousal support, which can be a major point of contention in divorces.
• Debt Protection: A prenup can clarify who is responsible for pre-marital debts and how debts incurred during the marriage will be handled.
• Estate Planning: It can integrate with your estate plan, ensuring that your wishes for your assets are honored upon your death, regardless of divorce.
• Clarity and Certainty: It provides a roadmap for financial matters, reducing potential conflict and stress if the marriage ends.

Important Considerations:

• Seek Independent Legal Counsel: Both parties should have separate and independent legal representation when drafting and reviewing a premarital agreement. This is crucial for ensuring voluntariness and protecting each party's interests.
• Timing: It's best to discuss and execute a premarital agreement well in advance of the wedding, avoiding the appearance of coercion or duress as the wedding date approaches.
• Fairness: While the law doesn't require a prenup to be "fair" in the subjective sense, agreements that are grossly one-sided are more likely to be challenged successfully, especially if there were issues with disclosure or voluntariness.

Conclusion

While the conversation about premarital agreements might seem uncomfortable, it's a practical and responsible step for many couples entering marriage in Virginia. By clearly defining financial expectations and protections, a well-crafted premarital agreement, executed in accordance with Virginia law and with independent legal advice, can provide both partners with financial security and peace of mind, allowing them to focus on building a strong and loving relationship.