Maryland Court Clarifies Standards In Contested Prenup Cases

Generally speaking, the Maryland courts will honor prenuptial agreements that were voluntarily entered into. In the case of Stewart v. Stewart, the court addressed a question that can arise in many modern marriages: when is a prenuptial agreement fair and when does it cross the line into overreaching? The Stewart case remains one of the leading Maryland family law cases concerning the validity and enforceability of a contested prenuptial agreement.

Background of the case 

Shortly before their wedding, the husband and wife signed a prenuptial agreement that was prepared by the husband’s attorney. This agreement required both parties to waive any claim to the other’s separate property, future inheritance, and estate. In this case, the prenup was presented to the wife only 4 days before the wedding. Although she was encouraged to have an attorney look over the agreement, she never did before signing.

Years later, the parties’ marriage broke down. The wife challenged the validity of the agreement. She argued that she never received full financial disclosure from her husband. Further, she lacked time to obtain independent legal advice. In addition, the agreement’s terms were so one-sided that they amounted to unconscionability.

The court’s analysis 

Under Maryland law, prenuptial agreements are recognized as valid contracts. However, they are not enforced automatically as an ordinary business contract would be. Since marriage is considered a confidential relationship, Maryland courts scrutinize prenups to ensure fairness. The court in Stewart reaffirmed the two-part test for determining whether the prenup was enforceable:

• Procedural fairness – The court examines whether the agreement was entered into voluntarily (with full disclosure) and whether each party had sufficient time and opportunity to seek legal advice.

• Substantive fairness – Even when the signing process is procedurally sound, the court will look at whether the terms were so one-sided or oppressive that it “shocks the conscience” of the court.

Applying the aforementioned principles, the Court of Special Appeals found that the Stewart agreement was valid and enforceable. Although the wife had limited time to review the agreement, she was not coerced or misled. The financial disclosures were sufficient under the circumstances. The terms were favorable to the husband, but they were not so extreme as to render them unconscionable.

Key takeaways from the case 

This case underscores that Maryland courts will probably enforce a prenuptial agreement that is entered into knowingly and voluntarily. This remains true even when it disadvantages one party. In this case, the wife should have had a lawyer review the document before signing. She didn’t, and the courts upheld the agreement.

Talk to a Bel Air, Maryland, Family Lawyer Today 

Schlaich & Thompson, Chartered, represent the interests of Maryland residents during their divorce or before their marriage. We can help you draft an ironclad prenup. Call our Bel Air family lawyers today to learn more.

Source:

caselaw.findlaw.com/court/md-court-of-special-appeals/1645942.html