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What You Need to Know about Prenuptial Agreements

What You Need to Know about Prenuptial Agreements

You’ve been married before and thought you’d never walk down the aisle again. But now you’ve fallen in love and want to get remarried.  The problem is, you have significant assets that you want to protect, in the unlikely event that things don’t work out with your second marriage.  Maybe you have children from your first marriage and, in the event you get divorced again, you want to keep as much of your wealth as possible, so that you can pass it on to your children one day.  Or, perhaps you’ve spent your whole life building your business.  Your employees are like family.  You never married but are going to take the plunge in the near future.  You are concerned that, if marriage turns out to not be for you, your spouse will walk away with partial ownership of your business or may be able to force the business to be sold.

In any of the scenarios discussed above, you may want to consider a Prenuptial Agreement, also known as an Antenuptial Agreement. An Antenuptial Agreement is a legal, binding contract signed by the future spouses, before they are married.  An Antenuptial Agreement is different from a Postnuptial Agreement, which is an agreement signed by the spouses after marriage.

If the spouses have an Antenuptial Agreement, in the event that a marriage dissolves, it is not uncommon for one spouse to claim that the agreement is unfair or one-sided. This happens where there is a disparity of wealth coming into the marriage, i.e., when one spouse has greater assets than the other spouse.  When the validity of an Antenuptial Agreement is contested by one spouse, the Massachusetts Probate Court will closely examine the agreement to determine whether or not its terms are enforceable.  Because the Court will be looking at an agreement that was negotiated and signed several years ago, or even just a few years ago, it is important to carefully follow the requirements for a valid Antenuptial Agreement, before it is signed and before marital strife arises.

When the validity of an Antenuptial Agreement is challenged in Massachusetts, the Court employs a two-step analysis. First, the Court examines the Antenuptial Agreement to determine whether it meets the requirement that it conforms to the rules governing the formation of all contracts, including “the absence of fraud, misrepresentation, and duress,” and that is also satisfies the “fair disclosure” rules. Rosenberg v. Lipnik, 377 Mass. 666, 672-73 (1979).  When examining these issues, the Court looks back to the time that the Antenuptial Agreement was drafted, negotiated, and signed.  The “fair disclosure” rule requires a Judge to determine whether “(1) the Agreement contains a fair and reasonable provision as measured at the time of its execution for the party contesting the agreement; (2) the contesting party was fully informed of the other party’s worth prior to the agreement’s execution, or had, or should have had, independent knowledge of the other party’s worth; and (3) a waiver by the contesting party is set forth.” Rosenberg at 672.

If this inquiry shows that the Antenuptial Agreement is valid, the Court then goes on to the second part of the analysis, and examines the terms of the Antenuptial Agreement to determine whether it is “fair and reasonable at the time of entry of the [divorce] judgment.” DeMatteo v. DeMatteo, 436 Mass. 18, 26 (2002).

Other requirements for a valid Antenuptial Agreements include that each party have had the opportunity to consult with independent counsel of his or her choosing, prior to the signing of the agreement. In addition, both parties should have ample time to negotiate (through their respective attorneys) the terms of the Antenuptial Agreement.  One party should not present an Antenuptial Agreement to the other party shortly before their wedding day.  Massachusetts Courts have held that an Antenuptial Agreement signed under such circumstances may be void. See, e.g., Schechter v. Schechter, 88 Mass. App. Ct. 239, 256-59 (2015) (holding that an Antenuptial Agreement was unfair and unreasonable and, thus, void, because it was signed by a wife just days before her wedding while she was seven months pregnant).  Therefore, the Antenuptial Agreement should be signed as far in advance of the wedding date as possible.  Also, each party should have the option of not going forward with signing the Antenuptial Agreement.

The above is only a partial list of the requirements of a valid Antenuptial Agreement. There are other essential terms that a valid Antenuptial Agreement must contain, in order to withstand future judicial scrutiny.  If you are considering marriage, but are concerned about protecting your wealth, assets, pensions, retirement accounts, or business interests in the future, you should consult with an attorney experienced in drafting and negotiating Antenuptial Agreements.

Attorney John E. Studley, Jr. has over 30 years of legal experience and has represented clients in drafting and negotiating Antenuptial Agreements. If you would like to speak with him, please call Sandy at 508-946-0070.

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