Defining a Prenup
Prenuptial agreements are written contracts made prior to your marriage that set forth the respective rights and obligations of partners during their marriage and in the event of a divorce. More specifically, there are some key components of a prenuptial agreement that you should be aware of.
Not all property is subject to equitable distribution; it depends on, among other things, whether the property was acquired before or after the marriage and how it was acquired. The creation of a prenuptial agreement occurs when spouses agree how ownership interests are to be characterized as either marital or non-marital , thus enabling a transfer of an interest in the characterizations of ownership if the parties’ desires are "manifested in a solemn writing."
Massachusetts General Laws Chapter 208 Section 6A sets forth the requirements for a prenuptial agreement to be valid and enforceable. A prenuptial agreement, like any contract, requires the presence of specific elements:
As a result of these requirements, there are a few common misconceptions about prenuptial agreements:
Properly drafted prenuptial agreements are not limited to protection of existing wealth. Couples choose to enter into them for a number of reasons:
Under the law, the rights and obligations of parties to a prenuptial agreement are governed by Massachusetts General Laws Supreme Judicial Court Rule 1:15, which sets forth the necessary procedural safeguards that must be followed to ensure a prenuptial agreement is valid and enforceable.
Legal Obligations in the Bay State
For a prenuptial agreement to be legally valid in Massachusetts, both parties must fully and fairly disclose their assets, income and liabilities. Since marital agreements are essentially contracts, both parties should be represented by legal counsel and must enter into the agreement voluntarily after sufficient opportunity to consider whether to agree or not. When negotiating, creating and executing a prenuptial agreement, both parties must be in a position to understand and appreciate each right and obligation they may forfeit by entering into the agreement. Any agreement made before the parties wed must not be unconscionable at the time it was executed.
In addition, neither party can be under any undue influence from the other. A prenuptial agreement is executed when the parties exchange executed documents, and signing does not occur, if a party neither receives a timely copy nor understands the contents.
Following a proper execution, it is presumed that the executed document is valid unless proven otherwise by one of the parties.
Essential Clauses of a Massachusetts Prenuptial Agreement
A well-crafted Massachusetts prenuptial agreement addresses several key issues, which helps to avoid misunderstandings and conflict if the need arises for a divorce. Such issues typically include the right of each person to manage and control their assets during the marriage; the equitable division of any joint and separately held property in the event of a divorce; whether one spouse will be required to pay alimony or spousal support to the other, and how much will be paid; and what will happen to each spouse’s assets and rights if one spouse dies without a will. Important financial documents such as statements of assets and liabilities may be attached to verify the separate current net worth for both parties as of the date of execution of the agreement to assist the court in determining asset values at a later time. The agreements must not be too one-sided or unfair or the court may refuse to enforce them.
Prenuptial agreements should be executed at least thirty days before the wedding date, have full disclosure of assets and debts, and allow for each party to have their own independent legal counsel advise them on the terms of the agreement. There must also be no coercion of one party by the other to sign the agreement. It is standard that under both Massachusetts General Laws Chapter 208, Section 24, the statutory twenty-day waiting period for fee waivers for a divorce filing does not apply to a divorce filed under a prenuptial agreement. Practically speaking, there must be a real anticipation of a possible divorce, or the agreement may not be enforceable under Massachusetts law.
Drafting a Prenup in the Bay State
When the parties decide that they want a prenup, they can draft their own custom prenup with their attorneys. Attorneys are almost always involved in the drafting of prenups in Massachusetts because important legal rights and interests are at stake and just about every prenup needs to comply with the statutes in order to be enforceable. The negotiation process and drafting of a prenup are good opportunities for input from each party, which can ensure that both spouses feel that they have had a hand in the outcome and are more comfortable with the result . This can reduce the chances that one party will later challenge the enforceability of the prenup by arguing that it was unfair or that he or she did not understand the prenup when it was signed. Although the drafting of a prenup can be an uncomfortable process for many people, it is time well spent. Agreements made now can prevent bitter courtroom extremes later.
Enforcement and Litigation
The enforcement of prenuptial agreements in Massachusetts is largely governed by Massachusetts General Laws chapter 209, section 25; however, other sections of the law, as well as case law, provide more detail. Chapter 209, section 25 essentially codifies the basic rules of enforcement of a prenuptial agreement in Massachusetts.
To be enforceable, a prenuptial agreement must not be unconscionable at the time of enforcement. The court will look at whether or not the agreement was fair at the time of its enforcement and also at its fairness at the time the agreement was made. By looking at the agreement at both times, the court can determine whether the agreement was unconscionable.
Where enforcement of the agreement would result in an unfair position or hardship to one party by making a condition "too extreme", the agreement may be unenforceable. Examples of this might include the situation where the parties were married for a short time, where one of the parties suffered an unfortunate financial loss, or where the agreement fails to deal with marital property or marital property is not dealt with fairly in the agreement.
If the prenuptial agreement cannot be enforced, other forms of relief such as equitable distribution of marital property and spousal support may be available.
Prenuptial Agreement Alternatives
Alternatives to Prenuptial Agreements in Massachusetts
Although prenuptial agreements are often very useful and important for a couple about to marry, they are not the only options or arrangements available to the parties. A Declaration of Disclosure is a negotiation tool that states the theory of the law regarding property and debt for the parties to a marriage. This document may be utilized in a dissolution of marriage proceeding along with a full financial disclosure to rebut the theory if there is an economic need by the parties. These documents are more often used by those people who have previously been through a dissolution of marriage and then marry again. For people who are already married , they may wish to enter into a marital agreement that is essentially a post-nuptial agreement. A post-nuptial agreement can address the same issues as a prenuptial agreement or a Declaration of Disclosure. These documents are most often seen in the context of a reconciliation or reorganization of a party’s financial/legal status.