Financial Duress

Asked about 2 years ago - Norfolk, VA

My spouse and I signed a marital separation agreement. Now my spouse is claiming they signed it under financial duress and that they were destitute when they signed it. I know the burden of proof is on them, but what does one have to show to prove financial duress. I know in law there are no hard and fast rules, but I would like to know of some general factors to show when someone makes a financial duress assertion/claim/pleading in court.

Attorney answers (3)

  1. Mary G. Commander

    Contributor Level 16

    2

    Lawyers agree

    Answered . "Financial duress" usually would not constitute legal duress, unless you were on the verge o f starvation or something equally dramatic. It is common to have "buyer's remorse" after signing an Agreement. Also, people often sign these without speaking with a lawyer and then come to a lawyer later and want it fixed. Other than provisions regarding child custody/visitation and child support which can be changed whenever there is a material change of circumstances or if the Agreement expressly states that something can be modified, there is nothing that can be done. These Agreements are not something to sign without careful consideration and usually, legal review. You cannot sign it today and change it later.

    This response does not create an attorney-client relationship and is intended for general information purposes only.
  2. Jennifer E Mandell

    Contributor Level 15

    Answered . The validity and enforceability of marital agreements is addressed in a number of different statutes in the Code of Virginia, including in particular Section 20-155 and Sections 20-109 and 20-109.1.

    What these statutes say in simply terms is that a parties to a marriage may legally enter into a contract regarding the rights and incidents of the marital relationship (such as property, debts, alimony, and subject to some limitations child custody & child support) and that these agreement s will be treated like any other contract. So, in order to have a contract set aside or invalidated, a person alleged to be a party to the purported contract would be subject to the same rules and same defenses as in any other contract case.

    So, the first question is whether it is a valid contract -- is it entered into for a lawful purpose, is it in writing, is it signed by both of the parties, was there a meeting of the minds, was there valid consideration, etc. Additionally, Section 20-155 and the case law interpreting that section tell us that in order to form a valid marital agreement, it must be in writing (with certain limited exceptions), it must be signed voluntarily (i.e., a party did not sign under duress), and there must be fair and reasonable financial disclosures or a knowing and voluntary waiver of such disclosures.

    If based on the facts of the case, it is determined that a valid contract was "formed", then the question is whether there are any legal cognizable defenses to enforcement of that contract. The most common defenses that arise in the context of objecting to a martial settlement agreement are that one party has committed "fraud" in inducing the contract (i.e., one party lied and/or hid substantial assets or other financial information from the other party) and/or that the agreement is "unconscionable" (i.e., so disparate in its terms so as to "shock the conscience" of the court).

    There really is no defense called "financial duress". There may be circumstances so dire as to make one party's signature to a martial agreement "not voluntary". But, normally duress requires that the person be under a reasonable fear of injury to themselves or another. For example, if you told your wife that she must sign the agreement now or you will slit the children's throats tonight while everyone is sleeping and she believed you might be serious, then that would be duress and her signature to the contract would not be voluntary -- thus, no valid agreement would have been formed under 20-155.

    If by financial duress she means that she was not provided with financial disclosures or gave a knowing and voluntary waiver to such disclosures, then the agreement might similarly be found to be invalid.

    Whether the agreement is unconscionable or not is a very fact specific analysis. An agreement that gives one party 55%, the other 45%, and waived spousal support where both parties were employed making at least $50k a year and had ample opportunity to consult an attorney would almost certainly not be found to unconscionable. An agreement entered into between a native english speaking husband with a college education and his wife from another country who speaks little english and has only a rudimentary education, that waives spousal support after 10 years of marriage where wife has not been employed outside the home and gives husband 80% of the marital assets and where wife had no access to money to hire an attorney to review the agreement for her is that type of case where the agreement would be quite likely to be set aside as unconscionable. For all cases in between, careful case law research needs to be done.

    I would suggest that you hire an attorney to defend the agreement.

    This response does not create an attorney-client relationship and is intended for general information purposes only.
  3. H. Eugene Oliver III

    Pro

    Contributor Level 12

    Answered . There is no defense of financial duress per se, but there is a duress defense. Being destitute wouldn't be enough, they would have to show their economic situation forced them into signing the agreement and they had no other option. It's a tough road to go for them, but you will still want an attorney to defend against the claim of duress in order to fully refute those allegations.

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Divorce

Divorce is the process of formally ending a marriage. Divorces may be jointly agreed upon, resolved by negotiation, or decided in court.

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