Making Sense of Premarital Agreement Validity

Spousal Election in Iowa

According to Iowa spousal election law (Code § 633.237), surviving spouses with no premarital agreement can make one of two choices during probate:

• take the property and assets as arranged in their partner’s will, or
• take an “elective share” of their deceased spouse’s estate.

An elective share takes all personal assets exempt from debt collection and a third of the equity value on real property; spouses may further take a third of the remaining property and assets after the executor settles all debts.

In lieu of accepting real property equity, Iowa Code 633.240 allows the surviving partner to occupy the homestead for life instead.

If the estate is intestate (having no will), spouses can take a “statutory” elective share or may contrarily assert “elective share rights” against a valid will in probate.

The courts will likewise presume surviving partners will take their inheritance provided in testamentary documents unless they file timely elective share claims during probate.

Deadlines for Spousal Election

Surviving spouses must notify the probate courts of their intent to take an elective share of the deceased’s estate within four months from the date they receive a probate notice from the executor or trustee of the estate.

The courts otherwise will administer the deceased’s assets according to the controlling testamentary document and spouses will have waived their right to acquire a life estate on the homestead. [Iowa Code §633.237(a)(b) and §633.241]

The Power of Premarital Agreements

Valid premarital agreements limit a spouse’s inheritance upon the death of the other partner. Couples often execute these prenuptial contracts to secure the inheritance of children from a previous marriage or to keep family assets held before the marriage from passing on to the spouse during probate proceedings.

Premarital agreements likewise override Iowa’s spousal election laws providing that the contract is in writing, signed by both parties, and satisfies the requirements set forth in Iowa Code §596.

Testamentary document challenges and costly probate litigation generally arise when testators negligently prepare, amend or revoke their premarital agreements while they’re alive.

Revoking and Amending Premarital Agreements

Destroying a premarital agreement or just writing “canceled” on it does not revoke or amend it. To rescind or modify a prenuptial contract, both spouses must agree and produce a writing that memorializes their intent.

Premarital agreement revocations in Iowa are also enforceable without consideration (a benefit received in exchange for giving up something).

A spouse may further revoke a premarital agreement without their partner’s consent if exceptional circumstances exist and if he or she retains an expert estate planning attorney to challenge the contract in court.

Disputing Premarital Agreement Validity

The courts may null and void a premarital agreement without the consent of both parties if evidence reveals the party seeking revocation:

• did not execute the agreement voluntarily;
• executed an unconscionable (extremely unjust) agreement;
• did not receive or could not have received a full disclosure of the property or financial obligations held by the other spouse before the marriage; or
• was not allowed reasonable time to seek legal advice before signing the premarital agreement.

Real Case Study from Iowa

In 2008, the Supreme Court of Iowa tested the validity of premarital agreements in probate for the first time. [In re Marriage of Shanks, 758 N.W.2d 506]

Here, the Court ruled parties seeking revocation must establish that duress or undue influence was present before and during the signing of the premarital agreement to claim they executed the contract involuntarily under Code §596.8.

Probate courts may further render premarital agreements unenforceable when evidence of unconscionability alone exists, since scrutinizing an extremely unjust contract is “substantially more circumscribed than [reviewing it] for mere inequity,” according to the Shanks Court.

Example of Premarital Agreement Nullification with Spousal Election

Frank marries Alice after both parties sign a premarital agreement that limits their inheritances.

Frank dies ten years later, and Alice discovers during probate that Frank had executed a will she knew nothing about, and even worse, Frank had a second family living in the other county.

Unbeknownst to Alice, Frank’s second family existed well before their marriage took place, and the family currently holds millions of dollars in assets from Frank’s estate. Frank also disowned Alice in his will and left everything to his second family.

Alice learned from the Smith Law Firm’s website that she can hire a probate litigator to question the validity of her premarital agreement in court.  She also discovered she holds an excellent chance to claim an elective share against Frank’s estate after the courts void her premarital agreement for Frank’s non-disclosure of wealth held before she signed the contract.