Postnuptial agreement

A postnuptial agreement is a written agreement executed after a couple gets married, or have entered a civil union, to settle the couple's affairs and assets in the event of a separation or divorce. It is normally "notarized" or acknowledged and is usually the subject of the statute of frauds. Like the contents of a prenuptial agreement, provisions vary widely but commonly includes provisions for division of property and spousal support in the event of divorce, death of one of the spouses, or breakup of marriage. In rare cases, a "prenup" may be enforceable even without a marriage, such as with a domestic partnership or registered partnership.

Legal recognition and enforceability

Under the Statute of Frauds, a prenuptial agreement is valid only if it is completed prior to marriage. After a couple is married, they may draw up a postnuptial agreement.

Postnuptial agreements must have all the elements of all contracts:

1. Offer
2. Acceptance
3. Consideration
4. Mutual assent
5. Legality
6. Capacity

In the United States

In the United States, as with prenuptial agreements, five additional elements are typically required for a valid postnuptial agreement:

1. it must be in writing (oral promises of this kind are always unenforceable)
2. it must be executed voluntarily
3. it must be done with full and/or fair disclosure at the time of execution
4. it must not be unconscionable
5. it must be executed by both parties (not their attorneys) "in the manner required for a deed to be recorded", known as an acknowledgment, before a notary public. ^[1]

Postnuptial agreements only came to be widely accepted in the United States in the latter half of the 20th century. For many years, US jurisprudence followed the notion that contracts, such as a postnuptial agreements, could not be valid when executed between a husband and wife. The inability of a husband and wife to contract with one another was due to the concept of marital unity: at the time of marriage, husband and wife become a single entity or person.^[2][3] Since one may not enter into a contract with one's self, a postnuptial agreement would be invalid. Even after the US courts began to reject marital unity as a legal theory, postnuptial agreements were rejected as being seen to encourage divorce.^[4]

It was only in the 1970s that postnuptial agreements were met with wide acceptance in the United States. The motivating factors considered to be behind this acceptance were the increase in divorce during the 1970s along with the implementation of so-called "no fault" divorces, granting divorces for any reason. Upon the wave of legislative and statutory changes, postnuptial agreements began to find acceptance in American jurisprudence.^[5]

Within the body of law in the US, there are typically three kinds of postnuptial agreements:

• An agreement that will provide for the assignation of marital property at the time of death of one spouse. These agreements typically have the surviving spouse waiving any rights to property they would have had the right to inherit under a will or statutory scheme.
• Agreements that are for all purposes separation agreements. These agreements are entered into to avoid the time and cost of divorce proceedings. The disposition of property, other marital assets, custody, alimony and support and the like are agreed to by the marital partners upon separation and the agreement later, usually, incorporated into the final divorce decree.
• The one most fixed in the mind of the public, are agreements that are an attempt to affect rights in a future divorce, usually limiting or waiving alimony and/or support and the division of marital property, which includes property obtained before and after the marriage.^[5]

State laws vary in their treatment of such agreements:

• Alabama law presumptively considers postnuptial agreements to be valid under Ala. Code 1975, §§30-4-9^[6] and §§43-8-72,^[7] supported by a decision of the Alabama Supreme Court in Ruzic v. Ruzic, 549 So.2d 72 (Ala. 1989).
• Alaska holds postnuptial agreements valid pursuant to Alaska Statute 13.11.085 and interpreted by the Alaska Supreme Court in Brooks v. Brooks, 733 P.2d 1044, 1048 (Alaska 1987).
• Arizona has held via a series of court decisions in Roden v. Roden, 29 Ariz. 398, 242 P. 337 (1926), In Re Estate Of Harber, 449 P.2d 7(1969) and Spector v. Spector, 531 P.2d 176 (1975), that postnuptial agreements are valid. Arizona has declined to address postnuptial agreements via statute, but has address the issue of prenuptial agreements via statute.
• Arkansas, like Arizona, has statute(s) that specifically govern prenutpial agreements, but none that govern postnuptial agreements. The Arkansas Supreme Court ruled in Stewart v. Combs, 243 S.W.3d 294 (2006), interpreting Arkansas Code 9-11-502 Removal of Disabilities of Married Women, that posstnuptial agreements are valid in Arkansas under the prevailing law(s) of contracts and should be interpreted accordingly.
• California views postnuptial agreements as valid per California Family Code Part 5, Chapter 1, §1500, which reads: "The property rights of husband and wife prescribed by statute may be altered by a premarital agreement or other marital property agreement."^[8] Additionally, §1502 provides that such agreements are to be "executed and acknowledged or proved in the manner that a grant of real property is required to be executed and acknowledged" if they are to be recorded in the office of the recorder.^[8]
• Colorado accepts the validity of postnuptial agreements under Colorado Marital Agreement Act, § 14-2-301, et seq., Colorado Revised Statutes 2002^[9] and supported by In re Estate of Lewin, 595 P.2d 1055, 1057 (Colo.1979), which states "Nuptial agreements, whether executed before or after the marriage, are enforceable in Colorado and a nuptial agreement will be upheld unless the person attacking it proves fraud, concealment, or failure to disclose material information."

• Connecticut courts have found postnuptial agreements valid under Connecticut General Statutes Annotated Title 46b, Chapter 815e, Sec. 46b-36,^[10] which permits, by law, a married woman to contract with her husband.
• Delaware has no statutes specifically granting or prohibiting postnuptial agreements. Like many other states, Delaware courts have relied upon a statute that provides the right to contract within a marriage, in this case the Married Woman's Act, 13 Del. C. § 311 et. seq., to support postnuptial agreements.^[11]
• Florida takes a contract law approach to the matter and treats postnuptials as properly enforceable contracts, subject to the prevailing law on the interpretation of contracts, as explained in Casto v. Casto 508 So.2d 330 (Fla. 1987).
• In Georgia, postnuptial agreements are considered valid.^[12] However, it is up to the discretion of the trial judge as to whether or not the agreement be approved and incorporated into the parties' divorce decree.^[13] The trial judge, according to the Georgia Supreme Court should employ basically three criteria in determining whether to enforce such an agreement in a particular case: (1) was the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts? (2) is the agreement unconscionable? (3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?^[13] If the answer to all three criteria is "no", the postnuptial agreement is generally valid.
• Hawaii takes a contract law approach to the matter and are presumed legal Hawaii Revised Code § 572-22^[14] with the exceptions child support are not subject to the contract and should one of the spouses require public assistance upon divorce the spousal support clause can be invalidated by the court.
• Idaho allows for postnuptial agreements, referred to as "marriage settlement agreements", to be valid if it be in writing, that it be executed and acknowledged in the same manner as conveyances of land, and if it affects real property, that it be recorded in the county in which any affected real property is located. Idaho Statutes §32-915 to §32-920.^[15]
• Illinois under its Illinois Marriage and Dissolution of Marriage Act (750ILCS5/)^[16] permits postnuptial agreements to be incorporated into divorce decrees if it meets the requirements of the Act.
• In Indiana, postnuptial agreements are presumptively valid under Indiana Code Title 31- Dissolution of Marriage and Separation^[17] Additionally, the Courts have found that public policy of Indiana "favors the amicable settlement by written agreement of the property rights of those citizens who are having their marriages dissolved."^[18] However, such agreements must be approved by the court, and it is only after such approval can they be considered valid. Per Atkins v. Atkins, 534 N.E.2d 760, 762 (Ind. Ct.App. 1989) "The court should do [incorporate postnuptial agreements] so unless it determines that the agreement was the product of some unfairness, unreasonableness or manifest inequity in its terms or that it was procured through fraud, misrepresentation, coercion, duress, or lack of full disclosure. A settlement agreement that has not been approved by the dissolution court and incorporated and merged into the decree has no legal efficacy."
• Kansas has ruled on the subject of postnuptial agreements: "The general rule in this state is that contracts made either before or after marriage, the purpose of which is to fix property rights between a husband and wife, are to be liberally interpreted to carry out the intentions of the makers and to uphold such contracts where they are fairly and understandingly made, are just and equitable in their provisions, and are not obtained by fraud or overreaching. Generally speaking, such contracts are not against public policy, although a different rule obtains where the terms of the contract encourage a separation of the parties."^[19]
• Kentucky generally accepts prenuptial agreements under Kentucky Statute Title XXXV §403.180, "(1) To promote amicable settlement of disputes between parties to a marriage attendant upon their separation or the dissolution of their marriage, the parties may enter into a written separation agreement containing provisions for maintenance of either of them, disposition of any property owned by either of them, and custody, support and visitation of their children."^[20]
• Louisiana (perhaps because it follows a legal tradition different from other 49 states) has codified postnuptial agreements, or "matrimonial agreements" as they are known in Louisiana, under Louisiana Civil Code Book III, Title VI, Chapter 1, Art. 2325, "Spouses are free to establish by matrimonial agreement a regime of separation of property or modify the legal regime as provided by law."^[21]
• Maryland by a string of case law has accepted the validity of post nuptial agreements as contracts to be interpreted by the current state of contract law in Maryland.^[22]
• In Massachusetts, postnuptial agreements have been found valid under Massachusetts Statutes, Chapter 209 §2.^[23] Recently, on July 16, 2010 in Ansin v. Craven-Ansin, the Massachusetts SJC for the first time enforced a postnuptial agreement.^[24]
• Michigan has abrogated the concept of marital unity via statute, under Michigan Code §557.23 Common law disability of married women to contract abrogated .^[25] Michigan has further extended this concept under Michigan Code 557.24 Contract by married woman, which, in part, states "A married woman may enter into a contract with respect to her separate property...."^[26][27] Further, Rockwell v. Estate of Leon Rockwell, 24 Mich. App. 593, 180 N.W.2d 498 (1970) states that postnuptial agreements are no invalid per se and are to be examined under existing contract law as it is understood in Michigan.
• Minnesota allows for postnuptial agreements under Minn. Stat. Ann. §519.11. However, there are some provisions governing postmarital agreements. Minnesota Statutes explicitly provide that, in order to be enforceable, each spouse must at the time of execution, be represented by separate counsel.^[28]
• Mississippi like many other states, has abolished the concept of marital unity and provided for women to contract with their husbands under Mississippi Code § 93-3-1^[29] Mississippi case law also supports post nuptial agreements^[30] so long as the agreement does not dispose of the matter of child custody and support. If the post nuptial agreement does address child custody and support, Mississippi courts have traditionally invalidated the entire post nuptial agreement.^[31]
• The Missouri Supreme Court has ruled that postnuptial agreements are not against public policy, making them presumptively valid.^[32] In determining the enforceability of the post nuptial agreement, Missouri courts use the same standard when examining the enforceability of a pre-nuptial agreement. The post nuptial agreement must be entered into "freely, fairly, knowingly, understandingly and in good faith and with full disclosure."^[33]
• Montana finds postnuptial agreements valid under Montana Code Annotated §§40-2-301 through 311.^[34]
• Nebraska case law has stated that postnuptial contracts are proper contracts to make reciprocal or mutual wills, and such contracts are valid in Nebraska.^[35]
• Nevada, under its statutes, Nevada Revised Statutes Title 11, Chapter 123 et seq.^[36] and the dicta found in Love v. Love, 114 Nev. 572, 959 P.2d 523 (1998), Daniel v. Baker, 106 Nev. 412, 794 P.2d 345 (1990) and Cord v. Neuhoff, 94 Nev. 21, 573 P.2d 1170 (1978), postnuptial agreements are valid.
• New York law will enforce postnuptial agreements. Domestic Relations Law §236(B)(3) states that three conditions must be meet in order for the agreement to be valid and enforceable. The first is that the agreement must be in writing; second it must be subscribed to by the parties and; third it must be proven or otherwise acknowledge in the same manner as a deed or other legal record.^[37] However, New York General Obligations Law §5-311 voids any postnuptial agreement that has the intent to relieve either the husband's or wife's obligation to support the other in a manner to prevent the other from becoming a "public charge."^[38]
• Ohio bans all postnuptial contracting under Ohio Rev. Code Ann. § 3103.06:^[39] "A husband and wife cannot, by any contract with each other, alter their legal relations, except that they may agree to an immediate separation and make provisions for the support of either of them and their children during the separation." Additionally, Ohio courts have traditionally refused to enforce postnutpial agreements executed in other states if the couple in question is domiciled in Ohio.^[40]

United Kingdom

The most authoritative source of law on the validity of postnuptial agreements is the judgment of the Judicial Committee of the Privy Council, ruling in the Isle of Man case, Macleod v Macleod. In that case, Baroness Hale of Richmond held that a trial judge has the power to interfere with a postnuptial agreement only on the basis of equity, most especially in order to ensure the continued maintenance of a child.^[41] This judgment essentially had the effect of validating postnuptial agreements in the Isle of Man, and so for the Untied Kingdom also.

The court distinguished postnuptial agreements from prenuptial agreements in that, in the former case the couple are already married. A prenuptial agreement was no longer the price that one party might extract for willingness to marry, and there is nothing to stop a married couple entering into contractual financial arrangements governing their life together, subject to the usual requirements of such contracts. The court continued to recognise prenuptial agreements in certain circumstances.^[42] The court declared its assumption that each party to a properly negotiated agreement was an adult and able to look after him or herself, whilst being aware of the risk of unfair exploitation of superior strength. The mere fact that the agreement was not what a court would have done could not be enough to have it set aside.

Canada

In Canada, postnuptial agreements are permitted, and in fact most provinces have statutes specifically allowing them. However, courts subject them to more legal scrutiny than prenuptial agreements. The reason for this is the legal theory that prior to marriage, neither spouse has any legal rights, so a spouse is not giving anything up by signing a prenuptial agreement. However, once married, various family law rights crystallize. Thus, if one enters into a postnuptial agreement, one is giving up rights that one already has.^[43]

Notable examples

• Financier Wilbur Ross and Betsy McCaughey Ross.

See also

• Prenuptial agreement
• Macleod v Macleod

References

External links

• Marriage & Divorce: When Prenups Fail