Prenuptial & Postnuptial Agreements

 

A prenuptial agreement, sometimes referred to as an antenuptial agreement or premarital agreement, is a written contract entered into by a couple prior to marriage that enables them to select and control many of the legal rights they acquire upon marrying, and what happens if their marriage eventually ends by death or divorce. Couples enter into a written prenuptial agreement in order to avoid the application of divorce laws that would otherwise govern the division of the marital estate and alimony, and to contractually determine with specificity what each party’s rights will be in the event of death or divorce.

Massachusetts case law specifically recognizes the enforceability of prenuptial agreements if certain criteria are met.  In determining the validity of a prenuptial agreement, the judge must undertake a dual-pronged inquiry. First, the judge must establish whether the agreement was "fair and reasonable, “at the time of execution.  In making this determination, the judge must examine whether the contesting party was fully informed of the other party's worth prior to the agreement's execution, or had, or should have had, independent knowledge of the other party's worth; and whether a waiver of marital rights by the contesting party is set forth in the agreement.  Full and fair financial disclosures are a significant aspect of fair dealings between parties entering into a prenuptial agreement and an essential prerequisite for a meaningful waiver of marital rights.  Next, taking a "second look," the judge must inquire whether the agreement, at the time of the divorce, is "conscionable."   Under the conscionability standard, "a judge may not relieve the parties from the provisions of a valid prenuptial agreement unless, due to circumstances occurring during the course of the marriage, enforcement of the agreement would leave the contesting spouse without sufficient property, maintenance, or appropriate employment to support herself or himself.

In Rhode Island, the enforceability of premarital agreements is controlled by the Uniform Premarital Agreement Act.   A premarital agreement must be in writing and signed by both parties.  A premarital agreement is not enforceable if the party against whom enforcement is sought proves that: (1) That party did not execute the agreement voluntarily; and (2) The agreement was unconscionable when it was executed and, before execution of the agreement, that party: (i) Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; (ii) Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and (iii) Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.  The burden of proof as to each of the elements required in order to have a premarital agreement held to be unenforceable shall be on the party seeking to have the agreement declared unenforceable and must be proven by clear and convincing evidence.

In Massachusetts, the highest Court in the state, the Supreme Judicial Court of MA, has ruled that a so-called postnuptial or marital agreement does not violate public policy and may be enforced but must be scrutinized by a judge to determine whether each party had an opportunity to obtain separate legal counsel of that party's own choosing, whether there was fraud or coercion in obtaining the agreement, whether all assets were fully disclosed by both parties before the agreement was executed, whether each spouse knowingly and explicitly agreed in writing to waive the right to a judicial equitable division of assets and all marital rights in the event of a divorce, and whether the terms of the agreement were fair and reasonable at the time of execution and remained so at the time of divorce.  In making the determination as to whether the terms of the agreement were fair and reasonable at the time of the execution, a judge may consider whether the purpose of the agreement was to benefit or protect the interests of third parties, such as the children from a prior relationship, the impact of the agreement’s enforcement upon the children of the parties, the length of marriage, the motives of each spouse, and their respective bargaining positions at the time the postnuptial agreement was drafted, the circumstances giving rise to the marital agreement the degree of the pressure, if any, experienced by one spouse, whether the parties both represented by counsel throughout the negotiations, and other circumstances the judge finds relevant.  In making the determination as to whether the terms of the agreement were fair and reasonable at the time of divorce, a judge may consider, among other factors, the nature and substance of the objecting party’s complaint, the financial and property division provisions of the agreement as a whole, the context in which the negotiations took place, the complexity of the issues involved, the background and knowledge of the parties, the experience and ability of counsel, and the mandatory and, if the judge deems it appropriate, the discretionary factors set forth by the statute for alimony or division of assets.

Rhode Island case law also suggests that postnuptial agreements are enforceable, however, there is presently very little guidance on the legal requirements.  Common sense would dictate that Rhode Island would likely follow many of the same criteria that Massachusetts case law has laid out with specificity.

 

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