Postnuptial Agreements are written agreements by spouses made after a marriage. So in a way, they are like prenuptial agreements, but they are entered into after the marriage takes place. Their intent is to try to “fix” something that is going wrong in the marriage, so that the marriage can go forward.
This is a relatively new area of law. The development of the law relating to these agreements is now starting to develop and is reminiscent of how the law of Prenuptial Agreements (those made before a marriage) developed 25 years ago. Postnuptial Agreements are also referred to as Postmarital Agreements or Postnups.
Marital mediators can work with a couple to identify the areas where a postnuptial agreement may assist the couple in improving and preserving their marriage. By working with the couple, the marital mediator can help the couple formulate the terms a prenuptial agreement and provide a draft of it for further review by the couple and their separate attorneys. When a couple works on the terms of a postnuptial (or prenuptial) agreement in mediation they have a great chance of coming up with a product that suits them both in an atmosphere of partnership and collaborative. It reduces bad feelings that can corrode a relationship. Working with a marital mediator helps the couple make sure the provisions in the agreement are narrowly defined and generated by the couple itself, and not just the “boilerplate” of a lawyer.
As recently as twenty years ago in many states, Prenuptial Agreements were not enforceable. They were considered to be against the public policy of encouraging marriage and the full union (including economic) of two people entering into marriage. In addition, Courts and legislatures were concerned with the possibility of coerciveness and unequal bargaining since in Prenuptial Agreements there is generally a large inequality in financial assets of the parties, or their parents.
Since that time, most states have accepted the legality of Prenuptial Agreements, but require certain safeguards for the contracting parties. The rules vary from state to state, but generally, the parties to a Premarital Agreement must make a knowing waiver of the marital rights they are waiving in the Prenuptial Agreement. In addition, the agreement must be fair and reasonable at the time it was entered into and at the time it comes into play (at divorce or death). It must not have been entered into through coercion or force. There must be complete financial disclosure in order for a Prenuptial Agreement to be valid.
There is generally more latitude in making restrictive previsions in a prenuptial agreement than in a postnuptial agreement. The theory is that a couple can decide not to marry if they don’t like the terms of a prenup; a couple is already married when they are developing a postnup, so the law believes there is more at state, and the couple is not bargaining at “arms length”.
Case law and statutory law is now in the process of being developed regarding the validity and enforceability of Postnuptial Agreements. There are some variations from state to state, so that it is very important for couples to review the laws of their state before they enter into one. Factors indicating enforceability would be that the negotiation process is not coercive, there has been full financial disclosure, and that the parties each have a separate reviewing attorney. In addition, a very important factor in maintaining the validity of a Postnuptial Agreement is that a contracting party is not secretly motivated to better the terms of an (imminent) divorce.
Negotiating of Postnuptial Agreement by a party who intends to divorce shortly afterwards is essential an agreement that has been be entered into by means of fraudulent inducement. Fogg v. Fogg is 1991 Massachusetts case in which the Supreme Judicial Court held a Postnuptial Agreement to be unenforceable because of fraudulent inducement of the contract. The Wife received valuable property interests under the Postnuptial Agreement, then filed for divorce very shortly thereafter. The timing of the Postnuptial Agreement and the filing of divorce (as well as financial disclosure issues) are present in Ansin v. Craven-Ansin, a Massachusetts case that came out in July 2010 and allowed postnuptial agreements if certain safeguards were met. The issue of full financial disclosure is a major issue in the Burkle v. Burkle case, a California case in which the California Appeals Court upheld the Postnuptial Agreement signed by the parties.
But even if the ultimate enforceability is not settled in a certain jurisdiction, a Postnuptial Agreement, if fair, can be upheld by the parties, and can relieve certain concerns so that the marriage can continue and be ongoing.
In addition, parties in Marital Mediation may make agreements that are not written into an agreement. Marital Mediation is a transformative type of mediation, in which agreements can be about styles of communication as well as very important financial matters, which might be best expressed in a written agreement.
In addition, the level of written agreements (if there is one) can vary, from a bulleted set of sentences written by the mediator, to a “Memorandum of Understanding” that is not acknowledged in front of a notary, to a full-blown Postnuptial Agreement, reviewed by reviewing attorneys, with attachments showing full financial disclosure, with the intent of it being binding in the event of the death of a party or divorce. Because enforceable Postnuptial Agreements can vary the laws of marriage, divorce and death, they should be undertaken with great care.
If you want to read more about Postnuptial Agreements, below is a summary of some of our articles.
The issue is the validity of the postnuptial agreement and whether they may be specifically enforced. See Fogg v. Fogg, 409 Mass. 531, 536 (1991). The Massachusetts Supreme Court recent announced its ruling. Here are some opinions by recent news organizations and experts.
Under ALI, Marital agreements have same standards as prenuptial agreements. The ALI takes the position that the principles applicable to marital and premarital agreements are the same and suggests, as some States have done, applying substantially the same standards for enforceability of both types of agreements. § 7.01 and Reporter’s Notes to comment e, citing Reese v. Reese, 984 P.2d 987 (Utah 1999). Some courts, such as the Massachusetts Supreme Judicial Court have held that the higher standards of equity applicable to separation agreements are applicable to marital agreements. See Ansin v. Craven-Ansin, SJC-10548 (July 16, 2010).
What better way is there for a mediator to help a couple who really do not want to divorce than a process that can take the spectre of contested divorce proceedings out of play, and thus, out of the way of the spouses’ efforts to stay together? The Massachusetts Supreme Judicial Court (“S.J.C.”) has finally recognized that “marital agreements” i are not invalid per se, but rather, they are permissible, and fully enforceable if created in a way that it will survive “careful scrutiny”, as prescribed by the Court ii . As always, though, opportunities come with challenges; and clients, lawyers and mediating professionals alike need learn important lessons from Ansin v. Craven-Ansin. iii
Fogg v. Fogg, 409 Mass. 531 (1991), is a postnuptial agreement enforceability case, in which the Massachusetts Supreme Judicial Court (SJC) denied enforcement of the agreement. It was a second marriage for both, and each had children from previous marriages. This is a situation in which a prenuptial agreement could have been very helpful for marital and family peace. If not done prior to the marriage, a postnuptial agreement could have been formulated with a marital mediator, and reviewed by estate planning attorneys followed by adopting an estate plan. This can be extremely helpful to the couples embarking on second marriages.
Firstly, the parties must be independently advised before they sign up, even if they have entered mediation and produced an agreement in principal. The problem at that point is neither party may have had independent advice. In order for a postnup to stand up to a court’s scrutiny, both parties should be sent off to their own lawyers to ensure they really do want to sign it and demonstrate that they have the opportunity to gain their own independent advice. Anyone trying to steal a march on the other side runs a risk of it not being upheld. It is essential to remain calm and cool throughout or it won’t work.
Here are the facts of the case the SJC recently resolved: Kenneth Ansin and Cheryl Craven-Ansin married in 1985. At the time, like ninety-five percent of couples entering into a first marriage, they did not enter into a prenuptial agreement, nor did they make any other attempt to privately determine the financial consequences that would ensue, should they divorce. Nineteen years and two children later, however, they entered into a written agreement “settling all the rights and obligations arising from their marital relationship” in the event of divorce.
Burkle v. Burkle was a 2006 California case in which the enforcement of a postnuptial agreement was contested by the wife at the time of divorce (Janet E. Burkle v. Ronald W. Burkle, 139 Cal.App4th 712 2006). In Burkle, a divorce dissolution proceeding was pending when the agreement was executed. The parties withdrew the divorce action and lived together for four more years prior to divorcing.
Eight years ago, appellant Janet Burkle (“Jan”) and her husband Ronald Burkle (“Ron”)-a wealthy and successful couple-decided to give their broken marriage another try. In aid of their reconciliation attempt, they decided to enter into a postmarital agreement designed to iron out sources ofmarital friction relating to their differing financial objectives. Jan wanted the financial status quo. She wanted to preserve the extremely affluent lifestyle that Ron’s previously successful, but risky, investments had produced. She did not want future investments to jeopardize the wealth already accumulated. Ron, on the other hand, wanted to continue investing aggressively in high-risk ventures. The agreement, negotiated over a period of months, harmonized Jan’s and Ron’s respective objectives to the then-satisfaction of each.
In this case study, Eugene tells Dolores that, if she does not sign this agreement, he will seek an immediate divorce, because he does not feel he can go forward with BugFree’s development and marketing if he does not retain sole ownership of it. Dolores is stunned to learn that Eugene is considering divorce and at a loss to imagine how she would live and care properly for the children if divorce were to occur. She strongly believes her children’s welfeare would be seriously compromised were she to return full time to work, yet does not see how she and the children could maintain their accustomed life on compensatory payments and child support alone. As the manager of the couple’s household finances, she knows that their current assets are modest. She is also fearful of the impact that divorce and the accompanying disruption would have on the children. She is not certain whether Eugene’s threat is serious but feels she cannot take the risk. Unhappily and reluctantly, she signs the agreement.
Articles categorized under Postnuptial Agreement.