PRENUPTIAL AGREEMENTS

In Massachusetts there is a statute that expressly authorizes prenuptial agreements. It is Gen Laws Chapter 209 section 25. It states:

At any time before marriage, the parties may make a written contract providing that, after the marriage is solemnized, the whole or any designated part of the real or personal property or any right of action, of which either party may be seized or possessed at the time of the marriage, shall remain or become the property of the husband or wife, according to the terms of the contract. Such contract may limit to the husband or wife an estate in fee or for life in the whole or any part of the property, and may designate any other lawful limitations. All such limitations shall take effect at the time of the marriage in like manner as if they had been contained in a deed conveying the property limited.

How Courts Interpret the Statute:

In Massachusetts, the key case to know regarding prenuptial agreements is DeMatteo v. DeMatteo, 436 Mass. 18 (2002).    In general, the agreement must be fair and reasonable when it is signed and fair and reasonable when it is sought to be enforced. The court must first consider if the prenuptial agreement is valid at the time of execution.

Prenuptial at the time of execution:

• Each party must be fully informed of the other party’s assets and liabilities prior to the agreement’s execution.
  • It is sufficient that the disclosure be such that a decision by the opposing party may reasonably be made as to whether the agreement should go forward.
• A waiver of spousal rights by each party must be set forth.
  • Waiver is important because it underscores that each party is exercising a meaningful choice when he or she agrees to give up certain rights in anticipation of marriage. (DeMatteo)
  • Judge may consider:
    • whether each party was represented by independent counsel;
    • the adequacy of the time to review the agreement;
    • the parties’ understanding of the terms of the agreement and their effect;
    • a party’s understanding of his or her rights in the absence of an agreement.
  • It must be fair and reasonable when it is signed.
    • This does not mean that the agreement needs to approximate an alimony award and property division ruling that a judge would be required to make under G. L. c. 208, § 34.
      • The considerations that permit a judge to conclude that a separation agreement is “fair and reasonable” are different from those that permit a judge to conclude that a prenuptial agreement is “fair and reasonable.” (DeMatteo)
    • Valid agreements may be one sided, and a contesting party may have considerably fewer assets and enjoy a far different lifestyle after divorce than he or she may enjoy during the marriage. (DeMatteo)
    • It is only where the contesting party is essentially stripped of substantially all marital interests that a judge may determine that the prenuptial agreement is not “fair and reasonable” and therefore not valid. (DeMatteo).

If a court makes the determination that the prenuptial agreement is valid at the time of execution, then it is required to determine whether it is valid at the time of enforcement/divorce. Often times this is referred to as a “second look.”

Prenuptial at the time of enforcement:

• Must be fair and reasonable at the time of enforcement.
  • A judge may not relieve the parties from the provisions of a valid 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 him or herself. (DeMatteo).
  • A valid prenuptial agreement is not unenforceable at the time of divorce merely because enforcement results in property division or an award of support that a judge might not order under G. L. c. 208, § 34, or because it is one sided.
  • Court will not recognize the validity of a prenuptial agreement that essentially strips the contesting spouse of substantially all of their marital interests.
  • “Conscionability” is the appropriate term to describe the standard at the time of enforceability.

Massachusetts Postnuptial Agreements

In Massachusetts there is a statute that appears to authorize postnuptial agreements. It is Gen Laws Chapter 209 section 2. It states:

A married woman may make contracts, oral and written, sealed and unsealed, in the same manner as if she were sole, and may make such contracts with her husband.

Massachusetts had specifically postponed the question of the validity of postnuptial agreements in Fogg v. Fogg, 409 Mass 531 (1991). It expressly left “to another day” the question of whether a postnuptial agreement could be valid and enforced. It was not until Ansin vs. Craven-Ansin, 457 Mass. 283 (2010), that a Massachusetts Court determined whether a postnuptial agreement could be enforced. The court determined that:

• A postnuptial agreement does not violate public policy and may be enforced;
• The agreement 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;
    • agreements are not enforceable if tainted by fraud or coercion.
  • whether all assets were fully disclosed by both parties before the agreement was executed;
    • prior to signing the agreement the party seeking to enforce it must have provided the other party with a written statement accurately listing (i) his or her significant assets, and their total approximate market value; (ii) his or her approximate annual income . . . and (iii) any significant future acquisitions, or changes in income, to which the party has a current legal entitlement, or which the party reasonably expects to realize in the near future. The disclosure need not be exact, but must approximate the value of the assets.
  • 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.

Fair and Reasonable Standard for Postnuptials

The standard in determining fair and reasonable standards for postnuptials is different than that of prenuptials. The court determined that a postnuptial agreement more closely resembles a separation agreement than it does a prenuptial agreement.

Postnuptial at the time of execution

In evaluating whether a postnuptial agreement is fair and reasonable at the time of execution, a judge should consider the entire context in which the agreement was reached, allowing greater latitude for agreements reached where each party is represented by separate counsel of their own choosing. (Ansin). A judge may consider:

• the magnitude of the disparity between the outcome under the agreement and the outcome under otherwise prevailing legal principles;
• 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 the marriage;
• the motives of the contracting spouses;
• their respective bargaining positions;
• the circumstances giving rise to the marital agreement;
• the degree of the pressure, if any, experienced by the contesting spouse; and
• other circumstances the judge finds relevant.                                                                                                                                                                                                                                                              

Postnuptial at the time of enforcement/divorce

In determining whether a postnuptial agreement is 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;
• the need for and availability of experts to assist the parties and counsel; and
• the mandatory and, if the judge deems it appropriate, the discretionary factors set forth in G. L. c. 208, § 34