By now, most adults have probably heard the term “prenuptial agreement” at one point in their lives. Sometimes referred to as an “antenuptial agreement” or “premarital agreement,” a prenuptial agreement is an agreement entered into between intended spouses before they are married. Said agreements set forth the future spouses’ legal rights and obligations in the event of a future dissolution of marriage and, sometimes, in the event of a death of one of the spouses while married. Most times, those legal rights and obligations are different than what would otherwise happen under the law in the absence of a prenuptial agreement. Similarly, there is a perhaps lesser-known version of such agreement that is entered into after spouses have already married called a “postnuptial agreement.” The concept is generally the same but for the timing, and in some states, there are different standards by which the enforceability of a postnuptial agreement is judged.
The recognition and enforceability of prenuptial and postnuptial agreements have greatly expanded in the past 30-40 years, especially with the modernization of divorce, including the elimination in most states of the requirement that fault must be proven before a divorce will be granted. Today, all states recognize the enforceability of prenuptial and postnuptial agreements, at least those that meet the state’s procedural requirements and otherwise comply with general contract law. While the area of law governing prenuptial and postnuptial agreements is quite complex, and procedural requirements at times drastically vary from state to state, there are certain overlapping principles that generally apply. First, the agreements must be reduced to writing. Second, in the case of a prenuptial agreement, they must be executed in advance of the marriage, and the intended marriage must, in fact, occur (otherwise, the contract is null and void). There is often a requirement that each party be afforded an opportunity to consult with independent counsel and that each party prepare a financial disclosure, typically then appended to the final, executed version of the agreement. Finally, there is usually a requirement that the agreement not include provisions that otherwise are against public policy. For example, in many states, the parties are not permitted to include provisions in their prenuptial agreement as to how custody of children will be determined in the event of a divorce nor what the financial support will be for those children.
Generally speaking, a prenuptial agreement will be enforceable regardless of where the parties reside in the future, assuming such residence remains in the United States. In other words, if spouses enter into a prenuptial agreement in New York and later move to Connecticut, Connecticut courts will give full faith and credit to the terms of such agreement so long as it meets applicable standards and requirements. It is for the foregoing reason that most prenuptial agreements, like many other non-marital contracts, contain a choice of law provision. While the enforcement of choice of law provisions is itself a complicated and nuanced area of the law beyond the scope of this article, such provisions are also generally upheld so long as there is a rational basis for the chosen law.
There is less uniformity when it comes to how and whether postnuptial agreements are enforced. Some states judge postnuptial agreements under the exact same standards as prenuptial agreements. Other states subject postnuptial agreements to stricter scrutiny or standards, in large part because those states have determined that the bargaining power between parties is far different when they are already married, and possibly already have children of such marriage, than when they have yet to say “I do.” Still, other states have very limited circumstances in which a postnuptial agreement will be enforced. For example, there may be a minimum net worth requirement for both parties and/or a requirement that the marriage continue for at least a certain number of years after the execution of the postnuptial agreement.
Protecting already acquired assets remains one of the common reasons parties enter into prenuptial or postnuptial agreements. However, the utilization of such agreements has become far more commonplace in recent years and is no longer seen as a tool to only protect the existing substantial assets of one spouse. Instead, many people enter into such agreements now to also protect the future acquisition of income and assets. That might mean that one of the intended spouses expects to receive substantial inheritances or business assets from his or her family during the marriage in the future. Or it might mean that one party, or even both parties, has substantial earnings potential in the future based on his or her career and wants to protect those future earnings and/or provide for the specifics of how those future earnings and assets acquired from same will be treated in the event of a future divorce.
Prenuptial and postnuptial agreements can vary in scope and should be fine-tuned and specific to the individual circumstances of the contracting parties. If you are contemplating entering into a prenuptial or postnuptial agreement, the first place to start, and the sooner, the better is to contact an experienced attorney well-versed in family law matters in your state. These agreements can quite literally change the course of your financial future and should be approached with diligence, nuance and sensitivity.
Kelly A. Scott practices in Pullman & Comley’s Family Law group and represents clients in all areas of matrimonial and family law. She has extensive experience representing clients with high-net worth and complicated assets, both in the preparation of prenuptial/postnuptial agreements and in dissolution matters. Kelly is well versed in child custody issues and is a certified Guardian ad litem.
