What is a Post-Nuptial Agreement?
A post-nuptial agreement is a contract entered into by two spouses with the intention of modifying the terms of any prior agreement that may have been entered into by them – called a prenuptial agreement. Unlike some other states that have laws governing the agreement, Massachusetts does not have a statutory post-nuptial law . However, Massachusetts case law has addressed this issue and allowed agreements to be enforced. The factors that will determine whether the agreement will be upheld include: Whether the agreement was entered into voluntarily, whether the parties were represented by counsel (or knowingly waived representation) and whether the agreement was fair and just.
Legal Requirements of Post-Nuptial Agreements in Massachusetts
In Massachusetts, the court has the authority to enforce post-nuptial agreements, including those reached after a couple’s marriage, under G.L. c. 208, ยง 34 ("An agreement between parties married to each other, relating to … support to be paid in the event of … divorce, … shall be valid and binding as long as the agreement is in writing and signed by the parties …"). If the language of the agreement does not explicitly include post-nuptial agreements then the court may enforce one if it finds that (1) the agreement is fair and equitable and not the product of fraud, foul play or overreaching; and (2) there is no unconscionability in the amount or extent of provisions contributed or responsibilities imposed upon the spouses. Smith v. Smith, 383 Mass. 189, 198 (1981); Bartley v. Bartley, 333 Mass. 616, 618 (1956); McGowan v. McGowan, 18 Mass. App. Ct. 459, 463 (1984). The Smith court held that these protections are "designed to prevent a spouse from being forced to accept an agreement which would provide him with a less generous support package than the law would have provided had he not signed." Smith v. Smith, 383 Mass. 189, 198 (1981). The court explained that these protections are not required if the parties are adequately represented by counsel because the parties "should be expected to receive an adequate measure of legal advice in structuring the terms of their own agreement" and "the union of legal representation and deliberative opportunity likewise minimizes the risk of either coercion or an inequality of bargaining position." Id. at 197. Keith v. Keith, 419 Mass. 228, 231 (1995).
Advantages of a Post-Nuptial Agreement
A post-nuptial agreement can protect assets, create certainty about who is responsible for one’s financial obligations, or even provide an opportunity for marital partners to stay married in the first place. Well-drafted post-nuptials can essentially be premarital agreements done after the wedding, if the correct conditions are met. For example, a party would need to know what he or she is giving up by entering into the agreement, whether it is fair (from the perspective of the party), and they would need to have their own independent counsel. If these conditions are met, then they take on much of the characteristics of a prenuptial agreement.
Perhaps the most important benefit of post-nuptial agreements is that the more detailed you are, the more it gets people to think about what to do in the unlikely event they choose to separate. More importantly, it forces marital partners to talk about the future and their values, so regardless of whether they agree with the other person, they’ve actually heard what the other person thinks.
Indeed, if a marital partner has been putting off the discussion of the future, presenting them with a draft post-nuptial agreement may help facilitate a dialogue that leads to compromise or new insights into the marriage. Even if the marital partners reject the post-nuptial agreement, they can be better prepared to make choices about the future.
Of course, if facilitates a separation (or at least separation-like conduct), that may be beneficial for all parties involved. For example, if you believe that spending $200 on a bottle of wine after work is no big deal, but your partner disagrees, you might spend less time arguing about it if you knew that in the event of a separation, maybe you’d have to pay for it. Of course, this may just lead to more arguments further downstream, but in any event, it encourages parties to think about outcomes and consequences.
If you are interested in this type of process, post-nuptial agreements rarely take more than a one or two day mediation session or collaborative law meeting to hammer out. While the example above may be trivial, sometimes the gendered roles we take on for granted can be pegged back, or if we truly recognize our differences after talking through them, that may also be useful. Thus, even if a post-nuptial fails to become a post-nuptial, it does not necessarily fail to produce valuable insights and information that could be relevant to the family at its current state.
It is important to note that post-nuptials are different than mid-marriage contracts in that there is no requirement that the parties ascertain the other person’s knowledge of the property or that the agreement be in place long enough to be enforceable as a prenuptial.
Common Issues and Considerations
Even with the best intentions, there can be challenges and considerations that arise with a post-nuptial agreement that parties should be mindful of. Some of these challenges can include enforceability issues, the impact an agreement may have on the marriage itself, and whether or not equitable distribution needs to be considered.
An agreement like a post-nuptial can always be challenged on its validity. Potential challenges can be based on the lack of full disclosure, lack of independent counsel, improper execution, unconscionability and/or proof that the agreement is contrary to public order. Another potential challenge for post-nuptial agreements in Massachusetts is that Child Support Guidelines have changed as of October 1, 2017. The new guidelines use a pro-rata system for sharing parental responsibility for the costs relating to unemancipated minors. Guideline C of the revised guidelines states that it is not appropriate for a judge to sign a post-nuptial agreement, made before October 1, 2017, that addresses child support when it does not comply with the revised Guidelines. This guideline provides that child support obligations cannot be reduced to a percentage of income based on the payor’s income, rather child support obligations cannot be lowered until the obligor’s actual income (based on the amount of income the parties received in the six month period preceding the date of abdication of judgment).
It has long been recognized that a post-nuptial agreement can, in fact, have a permanent effect on a marriage and therefore the effect of the underlying marital relationship itself must be carefully considered when deciding whether to enter into such an agreement. The fact that the Massachusetts Appeals Court will not enforce a post-nuptial agreement that leaves one party with less than he or she would have received absent the agreement is an indication that the courts care about the impact that the agreement will have on the marriage. While this challenge may affect the marital relationship, another challenge might be that the marriage itself influences the agreement. In Estate of Hennigar, the court found that the post-nuptial agreement was more like an inheritance than an equitable distribution. Post-nuptial agreements are considered to be valid, so long as they provide for an equitable outcome. Therefore, the court attempts to determine an equitable distribution arrangement, even where no general right exists to equitable distribution. In such a case, the petitioner husband received a $200,000 lump sum, a provision that would ordinarily be considered a testamentary writ and not subject to equitable distribution considerations.
To avoid the risk of being deemed an inheritance or testamentary device, a post-nuptial agreement should contain some type of quid pro quo. For example, waiving spousal support rights, or staying married should not be enough to support a post-nuptial agreement, since these things are already the status quo, and therefore, a post-nuptial agreement that waives spousal support or contemplates a stay of divorce will not be fair to the extent that it does not change the parties’ circumstances. "Consensual relinquishment of existing rights" such as a waiver on alimony or an agreement to remain married is not adequate consideration.
How to Create a Post-Nuptial Agreement in Massachusetts
If you and your spouse have agreed to enter into a post-nuptial agreement, the first step involves gathering information about your financial situations, including income, assets, debts, and expenses. You may want to get more specific about how you envision sharing future responsibilities during your marriage. You might also want to speak with your spouse about how decisions would be made regarding issues such as raising children, taking on or giving up job opportunities, relocation, and purchasing new property. Engaging in the negotiation process should be done in a respectful manner. Take mutual interests into account when establishing terms. You and your spouse should take the time to read and learn about what provisions you might want to include . Keep an open mind and try to consider the proposed ideas of your spouse as well as your own. Be willing to compromise. Once you draft the agreement, you and your spouse should carefully review its contents to make sure you are comfortable with it. Work with your spouse to come up with an appropriate title for the document and use understandable language. You may even want the agreement to specify any necessary explanations of provisions. Finally, present the draft agreement to your attorneys for review. Once both parties have reviewed, edited, and agreed on the provisions in the document, you and your spouse will sign the agreement and have the document notarized. Ideally, you and your spouse will each have an executed copy of the agreement to preserve over time.
Typical Provisions of a Post-Nuptial Agreement
Like any marital agreement, post-nuptial agreements tend to include a number of common clauses. Although the specific content and language of the clauses will vary from one agreement to another, there are a number of typical items you can expect to see in a post-nuptial agreement.
Property Division: The division of property is perhaps one of the most important components of a post-nuptial agreement. When drafting the language regarding property division, you have a number of options that can be used both to specify how property may be divided in the event of a divorce as well as to specifically designate certain property as exempt from division. A post-nuptial agreement typically provides for the distribution of property in the event of a divorce. Your agreement may also designate separate property, which is property acquired prior to the marriage by a spouse or property that was given to a spouse as a gift or inheritance during the marriage. Exempt property is not subject to division should the parties divorce.
Spousal Support: The spousal support provisions of a post-nuptial agreement often covers any agreements the parties make regarding alimony for either party. Spousal support provisions may include the amount of spousal support to be paid, the duration of payments, the duration of an alimony order, conditions which could impact an alimony award, and terms for future modification of an alimony award.
Debt Allocation: Just as parties can agree to various terms of property division, they can also agree to any terms the parties may have regarding debts. A post-nuptial agreement may address items such as who is responsible for what debt after a dissolution of the marriage. Items such as credit card debt and student loan obligations are typically addressed in this section of a post-nuptial agreement.
Child Related Provisions: Child related provisions can address a number of items. In a post-nuptial agreement, your statements about child custody may provide for joint or sole legal custody and/or joint or sole physical custody. The child custody provisions can also include what you think is in your child’s best interest if one of you passes away, as do life insurance policies. Child support is another item which can be addressed in a post-nuptial agreement. Here the parties can set forth each parties’ position on anything related to child support. Tax exemptions are another child related provision the parties can agree to.
Update Your Agreement Accordingly
Life is constantly evolving and often when we think of long-term agreements we think about how they will last forever. Unfortunately, this is not the case with post-nuptial agreements. Even when an agreement has been found to be fair and not drafted in bad faith, there is no guarantee that the same outcome will be reached years down the line. Circumstances change. That is the one constant in life. Relationships evolve and so do external factors placed upon those relationships. While reviewing a post-nuptial agreement you should consider factors such as: whether your spouse has developed a substance abuse problem, lost a significant amount of money , taken a large inheritance, begun having an extramarital affair, or even had a career change that has affected your financial position. All of these circumstances are legitimate reasons to review your agreement. If one or more factors apply to your situation you should at least consider the viability of your agreement. As with any legal document, the goal is to ensure its relevancy and enforceability. By regularly reviewing your agreement and updating the touchpoint with your divorce attorney you can begin to have established the necessary wisdom, strategy, and track-record should your agreement prove ineffective in the future.