Summary
The Georgia Court of Appeals reverses a trial court order enforcing the parties’ postnuptial agreement. The majority holds that the husband failed to demonstrate the required full and fair disclosure of material financial facts before execution of the agreement, particularly given the wife’s waiver of alimony. A dissent would affirm, concluding that the record supported the trial court’s finding of sufficient disclosure.
Topics
Practice areas
Questions Presented
- Whether the trial court erred in enforcing the postnuptial agreement when the record did not establish that Husband made a full and fair disclosure of material financial facts before the agreement was executed.
- Whether Wife's access to joint accounts, tax returns, mortgage documents, and general knowledge of the family's standard of living satisfied the disclosure requirement or instead improperly placed on her a duty to investigate.
Holdings
- The party seeking enforcement must affirmatively establish a full and fair disclosure of the parties' assets and material financial facts before execution; the opposing spouse does not bear a general duty to investigate.
- General access to joint accounts, tax returns, mortgage documents, and information from which Wife could have learned about the family's finances did not satisfy Husband's affirmative duty to disclose material assets and income.
- Mallen did not control because it involved materially different facts, including attached financial disclosure forms and an alimony provision, and was based on unique circumstances.
Key quotations
“Georgia law imposes an “affirmative duty of pre-execution disclosure on parties” seeking to enforce such an agreement.” (7)
“The burden does not fall to Wife to accumulate information from available sources.” (9-10)
“We find that by relying on the Wife’s ability to access joint accounts, joint tax returns, and joint mortgage documents, and her general awareness of other investments the Husband made and the family’s standard of living, the trial court erred in relieving the Husband of both his affirmative duty to make full and fair disclosure of material facts and his burden to demonstrate his fulfillment of that duty.” (14)
“Based upon the foregoing, we conclude that there was not a full and fair disclosure of material facts prior to the parties signing the Agreement.” (14)
Factual background
The parties married in 2005 and entered into a postnuptial agreement in 2014 governing property division, Husband's future inheritance, and waiver of spousal support. The agreement contained no financial disclosure form or listing of either party's separate property. Husband handled the family's finances, while Wife was a stay-at-home mother who testified that she lacked knowledge of the value of Husband's retirement account, separate assets, income, and textbook-business investment. Husband testified that he discussed the family's finances with Wife, but admitted he had no independent proof that he disclosed his income or the value of his separate assets before execution of the agreement.
Procedural history
Husband filed for divorce in 2024 and moved to enforce the parties' 2014 postnuptial agreement. The trial court granted the motion after an evidentiary hearing and later entered a written order consistent with its oral ruling. The Court of Appeals granted Wife's application for interlocutory review and reversed the enforcement order.