A prenuptial agreement is a contract entered into prior to a marriage or civil union. A postnuptial agreement is a similar contract entered into after a marriage or civil union. These agreements are typically notarized and are generally subject to the Statute of Frauds, the common law requirement that certain contracts must be memorialized in writing to be enforceable. The content of these agreements can vary considerably, but they typically include division of property and spousal support in the event of death, divorce, or other dissolution of the marriage. They may also include provisions regarding adultery or conditions of guardianship.
Historically, courts believed that nuptial agreements were contrary to public policy because it was thought that they might disrupt familial relationships or encourage the dissolution of marriages. Courts were also concerned about unequal bargaining power between spouses. Since the 1970s, however, courts have found that such agreements do not violate public policy as long as they are equitably constructed under fair and just circumstances.
Legally, these agreements are not necessarily the final word on how property will be divided or on post-divorce financial obligations. A court may find certain provisions within a prenuptial agreement to be unenforceable, and therefore invalidate these provisions or the entire agreement. In determining whether all or part of an agreement is enforceable, courts evaluate: fairness, disclosure of assets and liabilities, the existence of independent counsel, and the timing and circumstances of the agreement.
In assessing fairness, courts look at whether an agreement disproportionately favors one spouse over the other. Since circumstances change over time, this is tested at the time the agreement is sought to be enforced rather than when it was executed. Courts next look to whether parties have fully disclosed their assets and liabilities, and then whether the parties shared an attorney in drafting the agreement. Concealment of assets and liabilities or the sharing of the attorney may each render a nuptial agreement unenforceable. Lastly, the courts look at the circumstances under which the agreement was signed, especially whether there was reasonable time for each party to evaluate the agreement and whether there were any signs of duress or coercion.
Courts historically preferred prenuptial agreements to postnuptial agreements, reasoning that once married, partners would be less likely to execute this type of agreement fairly. Prenuptial agreements were therefore more likely to be upheld in court than postnuptial agreements. This perception is changing.
There has been a significant increase in the number of couples drafting postnuptial agreements in the past five years. These agreements are aimed at improving or preserving existing marriages. They can cover anything from which spouse’s family to visit during holidays to how much each spouse can spend on recreational activities to the division of yard work. Postnuptial agreements are most commonly used in community property states, which automatically give the other spouse rights to assets in the event of a dissolution of marriage. In determining whether postnuptial agreements are enforceable, as in evaluating prenuptial agreements, courts examine the circumstances of the negotiation process and whether it suggests duress or coercion, whether there has been full disclosure of assets and liabilities, and whether each partner used his or her own attorney.