Can Change In Circumstances Nullify A Prenup?

Board Certified Family Law Specialist Matt Arnold answers the question: “How will the judge divide our property?”


If you’ve ever played Farmville, then you played a part in making Mark Pincus a very rich man (a billionaire, in fact). Though his name might not ring a bell, his products likely do. Mark is the founder of a major videogame company known as Zynga, which is responsible for several big hits. His company has done quite well and Mark is now believed to be worth a little over $1.2 billion.


Piles-of-cash-Charlotte-Divorce-Lawyer-300x225What does this all have to do with divorce? Mark and his wife, Alison, who have been married for nine years during which time they raised three children, have now filed for divorce. According to several news reports, the couple are living separately and are about to begin what could become a brutal fight over the videogame fortune, this despite the existence of a prenuptial agreement.


Though the two were married in 2008, importantly, Mark launched Zynga in 2007, making the company a premarital endeavor. At the time of marriage, the prenup was written such that the money earned from Zynga was seen as Mark’s separate property. Alison now intends to challenge that, arguing that changed circumstances should invalidate the prenup. According to Alison, Mark is worth vastly more money than anyone could have reasonably anticipated and this should be enough to set aside the strict terms of the prenup.


Most people think that if a prenup exists, that’s the end of the story. Not so, as this case demonstrates. First, a prenup has to be valid to be enforceable. That means both parties need to have reviewed and approved of its terms. No one can be pressured or cajoled into signing, as this would amount to duress and invalidate a prenup.


Even if the proper procedures are followed and the prenup is technically valid, there could still be concerns that prevent it from being fully enforced. First, it’s important to note that when a court considers a divorce petition and must tackle the issue of property division, the starting point is that the court must reach an equitable result. There are factors that the court takes into account, including prenuptial agreements, to determine exactly what “equitable” means – but equity – meaning fairness, is the starting point.


Beyond checking to see if the prenup was properly executed, courts will also consider whether it was fundamentally fair and reasonable, both at the time it was executed and now, when the divorce is occurring. Changed circumstances are something that might impact this decision, as what was fair years or even decades ago may not seem so today.


As in this case, if it was agreed that a business and all profits that result from that business remain as separate property, that might seem fair at the time the prenup is signed. If, however, years later that formerly small business is now a billion-dollar corporation and the proceeds it has thrown off have paid for the vast majority of assets owned by the couple, the fairness of allowing everything to remain separate rather than marital property can start to come into question.


The lesson this case teaches is that prenups aren’t written in stone and then forgotten. They can be reassessed later on as courts try and ensure that whatever decisions are made are ultimately fair and treat the parties equitably.


If you find yourself facing a complicated family law matter, then you need the help of experienced family-law attorneys in Charlotte, North Carolina who can help guide you through the often confusing process of divorce. Please contact Arnold & Smith, PLLC today at (704) 370-2828 or find additional resources here.





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