Prenuptial and Postnuptial Agreements
A prenuptial agreement (sometimes referred to as a “premarital agreement” or “prenup”) is a contract between two people who “intend to marry”. A prenuptial agreement will typically describe the assets and debts which each party is bringing to the marriage and how these items will be dealt with in the event of a divorce. A prenuptial agreement may also touch upon inheritance rights, spousal maintenance and the payment of attorney’s fees in connection with a divorce proceeding. A postnuptial agreement is similar to a prenup except the parties are already married and “intend to remain married.” Parties contemplating or in a civil union are also permitted to enter into these types of agreements.
Who needs a pre/post-marital agreement?
Groucho Marx once noted, “Marriage is the chief cause of divorce.” In view of this observation, it would seem that a pre/post marital agreement would benefit everyone. Typically, (and we hesitate to use the word “typically”), marital agreements are advisable for a second or third marriage, particularly when there are children involved and a desire to protect their inheritance. Other “typical” scenarios involve family businesses, professional practices, trust funds and inherited assets as well as cases where one partner is entering the marriage with substantially more debt and/or property than the other. Whether the expense and potential emotional fallout is justified in any particular case is not a question which can be answered here.
How soon before the wedding should a prenuptial agreement be discussed and signed?
As far in advance of the “big day” as possible. As noted below, among the criteria which the court will consider if the prenuptial agreement is later challenged is whether each party had an opportunity to consult with their own attorney regarding the agreement and whether a party’s signature was obtained under duress. When the agreement is signed the day before the wedding, these considerations may be brought into question. Similarly, postnuptial agreements will be viewed with suspicion if they are signed shortly before a spouse files for divorce.
Can both parties be represented by the same attorney?
No. Joint representation in this instance is rife with potential conflicts of interest. This does not mean that both parties must have an attorney – although it is the better practice and highly recommended.
How are pre/post- marital agreements enforced?
The court presumes that a pre/postnuptial agreement is valid unless the party seeking to set the agreement aside can prove otherwise. The agreement must be signed by both parties. A prenuptial agreement is effective upon marriage; a postnuptial agreement is effective upon signing. The agreement will be set aside if the party challenging it can prove any one of the following:
- the agreement was signed under duress or was involuntary;
- the party challenging the agreement did not have an opportunity to consult with independent legal counsel. In other words, once presented with the proposed agreement, there must have been a sufficient period of time before the agreement was signed for the party to go out and hire and consult with an attorney. In addition, the party must have had the financial wherewithal to pay for the services of an attorney or the other party must have offered to assume this cost;
- where each party did not have his/her own attorney, the agreement failed to contain the requisite notice of waiver of rights or a plain language explanation of the marital rights and/or obligations being modified or waived by the agreement; or
- the party challenging the agreement did not receive adequate financial disclosure of the property, liabilities and income of the other party.
Will any particular terms be unenforceable?
Provisions in the agreement related to the payment (or waiver) of spousal maintenance and the payment of attorney’s fees will not be enforced if the court finds they are unconscionable at the time a party seeks to enforce the agreement. In addition, the following terms are always unenforceable:
- a provision that adversely affects a child’s right to support;
- a provision that limits or restricts a remedy available to a victim of domestic violence;
- a provision that attempts to modify a court-decreed legal separation or marital dissolution;
- a provision that punishes a party for initiating a legal proceeding leading to a divorce or legal separation;
- a provision that violates public policy; or
- a provision that defines rights or duties of parents regarding custodial responsibility.