Many people know that a prenuptial agreement, or prenup, is entered into by and between the soon-to-be-spouses prior to the wedding; and that a prenup often includes provisions regarding alimony and the division of property in the event of a divorce. What is less common knowledge is the existence of an agreement known as a postnuptial agreement, also referred to as a marital agreement. This type of agreement is entered into by and between individuals who are already married. The possibility of a postnup comes up in a marriage if the parties are going through difficulties and/or are considering separating at some point in the future. In many cases of postnuptial agreements, however, the parties wish to remain married, but currently feel financial burden and stress. A postnup may alleviate some of this stress.
Groundbreaking court ruling
Whether postnuptial agreements are recognized and enforceable is determined on a state-by-state basis. In 2010, an important case was decided in Massachusetts whereby the court, for the first time, recognized the validity of a postnup entered into between spouses during their marriage. The case, Ansin v. Craven-Ansin, presented the court with an opportunity to list the factors and criteria that must be met for a postnup to be enforceable. Specifically, the court held that, in connection with a divorce, a postnup may be valid if:
- Each party had the opportunity to hire separate legal counsel – of his or her own choosing;
- There was an absence of coercion and fraud;
- There was absolute full disclosure of each party’s assets prior to execution of the agreement;
- That each party knew and explicitly waived marital rights – including the right to a court-ordered equitable division of marital assets in the event of divorce; and
- That the agreement was fair and reasonable at both the time the parties executed the document AND at the time of the divorce.
Importantly, even though the first requirement states that each party must have the opportunity to obtain legal counsel regarding the postnup, the court will scrutinize the actual participation of said legal counsel. Therefore, not only having the opportunity to obtain counsel, but the actual use of legal counsel, goes a long way in a court’s analysis of a postnup’s validity.
Note: The court also stressed that the person seeking to enforce a postnup has the burden of sufficiently proving the required criteria are met. If the opposing spouse did not have adequate legal counsel while entering into the postnup – it is very difficult to meet that burden of proof.
What this means for you
If you and your spouse find yourselves in a difficult or stressful financial situation, but wish to remain married; or if you contemplate separation at some point down the road, a postnuptial agreement may be a possible step forward. With regards to postnuptial agreements, it is so important for each spouse to obtain separate legal counsel to carefully explain the pros, cons, repercussions, and realities of the situation, and to carefully negotiate any final agreement.
Contact Attorney Rosanne Klovee today to discuss your specific situation and whether a postnuptial agreement may be the right decision for you.