Too Late for a Prenuptial Agreement? Consider a Postnup!

In my Massachusetts Prenuptial Agreement Primer, I described the requirements for preparing a valid prenuptial agreement in Massachusetts. Validity is determined on a case-by-case basis, and one important factor is "adequacy of the time to review the agreement" before signing it. Unfortunately, many couples do not begin thinking about a prenuptial agreement (also referred to as a "premarital" or "antenuptial" agreement) until it is too late. I have had to turn away potential clients who called me just days before their planned wedding. Even if a prenuptial agreement could be negotiated and drafted before the wedding, there simply is not enough time for each of the intended spouses to review the agreement, get independent legal advice, and make an informed decision about its contents. Any agreement signed under those conditions could face serious enforceability challenges.

Postnuptial Agreements Are Allowed in Massachusetts

There is very little case law in Massachusetts regarding postnuptial agreements (sometimes also referred to as "marital" agreements because they are signed during the marriage) โ€“ but there is enough to know that they are allowed. We also know the general requirements for a valid and enforceable postnuptial agreement:

Before a marital agreement is sanctioned by a court, careful scrutiny by the judge should determine at a minimum whether (1) each party has had an opportunity to obtain separate legal counsel of each party's own choosing; (2) there was fraud or coercion in obtaining the agreement; (3) all assets were fully disclosed by both parties before the agreement was executed; (4) 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 (5) the terms of the agreement are fair and reasonable at the time of execution and at the time of divorce.

Ansin v. Craven-Ansin, 457 Mass. 283 (2010).  These requirements are quite similar to those for a valid and enforceable prenuptial agreement.

Important Caveat Regarding "Fair and Reasonable" Provisions in Postnuptial Agreements

When intended spouses are preparing a prenuptial agreement, they are not yet married and are therefore negotiating at what the courts call "arms' length." Because of this conceptual distance, it does not take much for a premarital agreement to be considered "fair and reasonable" โ€“ it will fail to pass the test only if "the contesting party is essentially stripped of substantially all marital interests." DeMatteo v. DeMatteo, 436 Mass. 18 (2002). Many practitioners take this to mean that a premarital agreement would be found unfair or unreasonable only if one of the spouses risked becomeing a public charge.

In contrast, married spouses already have certain rights with respect to each other, so the negotiating distance between them is substantially reduced. In the Ansin court's view (which remains definitive), "The circumstances surrounding marital agreements in contrast are pregnant with the opportunity for one party to use the threat of dissolution to bargain themselves into positions of advantage." Therefore, the term "fair and reaonable" has more bite when enforcing a postnuptial agreement than a prenuptial agreement. The Ansin court specifically stated, "We do not accept ... that the standard applicable to marital agreements should be the same as the one applicable to premarital agreements."

Instead, for postnuptial agreements, the "fair and reasonable" standard leaves much more to a judge's discretion. Specifically, "[i]n determining whether a marital agreement is fair and reasonable at the time of divorce, a judge will be able to satisfy the searching inquiry [the Ansin case requires] by examining the same factors employed for evaluating a separation agreement." These factors include:

  1. the nature and substance of the objecting party's complaint;
  2. the financial and property division provisions of the agreement as a whole;
  3. the context in which the negotiations took place;
  4. the complexity of the issues involved;
  5. the background and knowledge of the parties;
  6. the experience and ability of counsel;
  7. the need for and availability of experts to assist the parties and counsel; and
  8. the mandatory and, if the judge deems it appropriate, the discretionary factors set forth in G.L. c. 208, ยง 34.

The upshot is this: if a postnuptial agreement is challenged in court, the judge will take a much closer look at the division of assets and income, and will reach his or her own discretionary decision about whether that division is "fair and reasonable." The division does not have to be equal, but it cannot be as disproportionate as would be permitted in a prenuptial agreement.

Postnuptial Agreements Can Serve Important Functions

Just as with a prenuptial agreement, a postnuptial agreement is a contractual arrangement between the spouses to determine the disposition of each of their assets and incomes in the event of a divorce. The agreement stands in place of whatever default rights the spouses might otherwise have under the laws of Massachusetts. Thus, if a postnuptial agreement is properly prepared so that it is valid and enforceable, it can avoid a great deal of disagreement and even potential litigation. A postnuptial agreement might even have a dispute resolution provision, requiring the spouses to bring any disputes to a mediator or arbitrator instead of court.  I ask all of my clients to consider including a provision along these lines.

Postnuptial agreements are not for everybody, but if you are running out of time to prepare a valid and enforceable prenuptial agreement, consider getting a postnuptial agreement instead.