Prenuptial Agreement Unenforceable When Spouses Didn’t Know of All Assets

Tennessee case summary on prenuptial agreements in divorce.

Donna Booker v. James Michael Booker

Wife executed a prenuptial agreement regarding the husband’s interest in his family’s steel erection business.

The husband and wife in this Hamilton County, Tennessee, case first married in 1993, divorced in 1998, but remarried in 1999.  The day of the 1999 wedding, the husband and wife executed a prenuptial agreement regarding the husband’s interest in his family’s steel erection business.

The wife filed for divorce again in 2020, and trial was held in 2022.  Among other things, the trial court held that the prenuptial agreement was valid, and awarded the husband his interest in the family business as separate property.  The wife appealed to the Tennessee Court of Appeals.

The evidence showed that the husband had presented the agreement to the wife on the day of the wedding, and that she signed it without having an attorney look at it.  The husband testified, however, that he had provided her a copy several weeks before.

The agreement did not specifically address certain non-voting shares of the company, which the husband claimed not to have known about at the time.

The appeals court began its analysis by noting that Tennessee law favors prenuptial agreements, and those agreements are enforceable if entered into freely, knowledgeably, in good faith, and without duress or undue influence.  The wife argued that it was not entered into  knowledgeably or in good faith, because of the husband’s non-disclosure of the non-voting shares.

The trial court looked upon this as a “technical omission,” but the appeals court disagreed.  It noted that whether disclosure is “full and fair” is a fact-specific inquiry.  When the appeals court considered all of the facts, in found that the wife was at a significant disadvantage when executing the agreement.  It noted that the husband possessed more business acumen.  It noted that each party should have a clear idea of the nature of the property.  Here, if the husband lacked that information, then there was no way for the wife to acquire it.

For these reasons, the Court of Appeals held that the agreement was unenforceable, and reversed the trial court on that issue.

After addressing the other property and alimony issues in the case, the Court of Appeals affirmed in part, reversed in part, and remanded.

No. E2022-01228-COA-R3-CV (Tenn. Ct. App. Oct. 24, 2023).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Prenuptial Agreement: Pros and Cons in Tennessee Divorce Law.