The state of Maryland law governing prenuptial agreements
Prenuptial agreements are also known as premarital or antenuptial agreements and are governed by state law.
In contrast to many other states, Maryland does not have a statute governing prenuptial agreements, which are contracts signed by future spouses that usually concern property and monetary rights in case of divorce or death. Instead, Maryland prenuptial agreements are governed by contract law.
Maryland sets its own standards for prenups
It could reasonably be said that Maryland treats prenups relatively conservatively.
For example, a handful of states treat prenuptial agreements like business contracts without much sympathy for bad bargains. Maryland does treat prenups like other contracts, but with heightened recognition they are special contracts between people in confidential relationships.
Maryland does not go as far as some other states that have very specific requirements. For example, some require a set time period between presenting a prenup and signing to give the other party time to consult a lawyer and think it over. Maryland case law does, however, incorporate some similar protections, although not to the extent of those other states.
An important prenup case
In 2013, the Court of Special Appeals of Maryland decided a significant case that describes the law of prenuptial agreements in the Old Line State. In Stewart v. Stewart, the court upheld a prenup in which the wife had waived rights in the husband’s significant premarital assets, where she still had rights to alimony and a monetary award, had a few days before the wedding to consult a lawyer and knew generally the assets of the husband.
The Stewarts entered marriage in very different economic circumstances. James had assets worth about $2 million and Barbara had nothing of value. As a condition of marriage, four days before the wedding James presented Barbara a prenup drafted by his attorney, which she signed without talking to a lawyer.
The agreement required each person to waive any interest in the property of the other owned at the time of marriage and in the other’s estate at death. The document listed all of James’ significant premarital assets except a retirement account.
When they later divorced, Barbara challenged the prenup’s enforceability in court, arguing inadequate disclosure of James’ assets at the time of signing.
The court said that prenuptial agreements are contracts, but because they concern a confidential relationship, they may not be “overreaching.” Overreaching concerns “unfairness” in the circumstances of signing (the “procedural prong”) and in the agreement’s result (the “substantive prong”).
The court said that the circumstances of signing were procedurally fair – that she had signed “freely and understandingly” – because the agreement disclosed almost all assets and even though the values were not revealed, she would have known they were “substantial.”
As to whether the terms were overreaching, the court found that what she gave up was “commensurate” with her benefit because she did not give up the right to alimony or a monetary award upon divorce, even though she gave up valuable rights in property.
The Stewart case explains the legal standards applied to prenuptial agreements in Maryland in detail and sheds light on how a state court would approach a challenge to the validity of a prenup.
Talk to a lawyer
The importance of consulting a lawyer cannot be overemphasized if you are considering drafting or signing a prenup in Maryland. The future property and monetary rights involved are too significant not to understand the complex state standards that apply before you sign.
The attorneys at Law Office of Dawn M. Green, in Annapolis represent Maryland clients in matters related to prenuptial agreements, including review, drafting and negotiation, as well as challenging or defending them in court.
