§ 4.03A Points of Disagreement and Other Concerns
| Jurisdiction | United States |
| Publication year | 2021 |
§ 4.03A Points of Disagreement and Other Concerns
Courts applying the modern approach generally will enforce a divorce agreement only if it is in writing, freely and intelligently executed, and does not encourage divorce. At that point dissenting views arise.
[1]—Contracts Limiting Alimony
The courts have disagreed whether to enforce a divorce agreement provision that limits alimony.236 While many will enforce such a provision, some will not enforce it if it leaves a spouse with less than a "reasonable" level of support.237 Some have not enforced such waivers,238 while others have.239
States disagree regarding whether the right to interim support while a divorce action is being litigated can be waived in a premarital agreement. A New York case involved a premarital agreement whereby one spouse waived the right to equitable distribution in exchange for a right to receive $300,000 for each year of marriage (with a cap of $4,500,000). The court enforced the agreement.240 In some states, alimony cannot be limited in a premarital agreement.241
The Nevada Supreme Court enforced a waiver of alimony that did not apply if either party would be eligible for public assistance.242 In contrast, where a Tennessee court found that a party would probably become a public charge if the alimony waiver would be enforced, the court found the waiver unenforceable.243
The policy concerns are fairly evident. Alimony waivers, if enforced, could create much suffering and more wards of the state. Because of this result, courts construe waivers in marital contracts narrowly. So, for example, if the contract merely contains a waiver of "any and all rights" a spouse might otherwise acquire as a result of marriage, this would not be construed as an alimony waiver.244
Premarital agreements sometimes contain waivers of the right to court-awarded legal fees. Some courts have not enforced such waivers regarding legal fees arising from issues relating to minor children.245
A Colorado court has held that the right to court-awarded legal fees at divorce cannot be waived in a premarital agreement.246 A New York court reached the same conclusion.247 An Illinois court has ruled that it is unenforceable to waive interim fees for issues relating to children.248
If the contract sets a fair amount of alimony to be paid if the parties divorce, it seems likely courts would enforce such a provision.249
For example, in a Louisiana case the contract provided that if the parties divorced and the wife had not committed adultery, the husband would pay 20% of his gross post-divorce income as alimony. The court enforced this provision.250
Another Louisiana case enforced a commitment in a premarital agreement to pay, if the parties divorced, $20,000 annual payments to the recipient until she died or remarried.251
In a Missouri case, the husband provided commitments to the U.S. government in connection with the immigration of his wife and her children that he would support them. The Missouri court concluded that this was not a contractual commitment that the wife could enforce at divorce.252
Enforcement of an alimony waiver can, in some courts, depend upon whether the circumstances of the parties have changed significantly during the marriage.253
[2]—Unfair Property Division Contracts
[a]—In General
Most states that enforce marital contracts generally allow spouses to specify how property owned by either spouse at divorce will be allocated, if the marriage ends in divorce.254 A few courts have stated that a marital agreement will be enforced regardless of the fairness of its terms.255 However, some courts have concluded that an agreement pertaining to property division can be rendered unenforceable if its terms are sufficiently unfair.256 The standards set forth by the various courts have been anything but uniform.
For example, in some states unfairness alone is not an adequate ground to overturn a marriage contract. An agreement is considered unenforceable under the Uniform Premarital Agreement Act only if the agreement is unconscionable at the time the agreement was signed and the party challenging the agreement received inadequate disclosure.257
In most states that have adopted the UPAA, that is the rule; in North Dakota, Iowa, and Connecticut a court need not enforce a premarital agreement at divorce if it would be unconscionable to do so.258 In most UPAA states, the focus is on whether the agreement is unconscionable at the time of signing. North Dakota law provides that an agreement should not be enforced if it is unconscionable at the time of enforcement. If enforcement of the agreement would be unconscionable, the court has great discretion regarding what it could do to avoid an unconscionable result.259
In New Jersey, a premarital agreement may be challenged if its terms are unconscionable at divorce and the complaining party did not consult independent counsel and did not wave the right to such counsel.260
A Missouri opinion stated that if the marital contract is unfair, this shifts the burden to the spouse benefiting from the agreement to show there was adequate disclosure.261 In Washington, the agreement must make a fair and reasonable provision for the party who is not seeking enforcement of the agreement.262
In a Minnesota case, the court held that, when reviewing the fairness of a premarital agreement, the level of review should depend upon whether the agreement addresses only non-marital property, or whether it also attempts to change the rights of parties to what would have been marital property. If the contract only addresses non-marital property, it should generally be enforced if there was adequate disclosure of financial information and both parties had the opportunity to consult with independent counsel.
However, to the extent that the agreement is intended to change the parties' rights to what would otherwise be marital property, it should be subject to a more rigorous review. In addition to a review of whether the financial disclosure was adequate, the court should consider whether the consideration was "adequate," whether the parties understood the agreement, and whether there was duress. The court held that, for consideration to be "adequate," it needed to "sufficiently provide" for the disadvantaged spouse. The court found that, if the agreement would be enforced, the woman would have been left with "very little." The court held that this was not "anywhere near" adequate consideration. Because of this finding, and because there was also a finding of duress, the court affirmed the ruling that the agreement should not be enforced.263 In Alabama, if the agreement is not fair, just and equitable, the party benefiting from the agreement must show that the agreement was entered into voluntarily, after receiving competent independent advice and disclosure of the value of the other spouse's property.264
The Mississippi Supreme Court has held that a premarital agreement should not be enforced if it was unconscionable when signed.265
The Mississippi Supreme Court later considered how this could be proved. In this case, the parties had signed a premarital agreement which provided that each party would own property acquired by that party during marriage, and that each party waived any right to the other's property. Each party also waived the right to seek alimony from the other. In their later divorce, the wife argued that, because she had a much lower income than her husband, this agreement had an unconscionable effect. The Mississippi Supreme Court rejected this argument, citing precedent from other states that a premarital agreement was not unconscionable merely because it perpetuated an already existing disparity in the parties' financial circumstances. The court stated that, to be unconscionable, the terms needed to be so one-sided that no one in his right mind would sign it. The court held that the agreement in this case was not unconscionable.266
A South Carolina court has stated that a premarital agreement should not be enforced if it was unconscionable when signed. It ruled that, in this case, the agreement was not unconscionable because the "terms were not so one-sided or oppressive that no reasonable person would make them."267
A Missouri court invalidated an agreement because it was substantively unconscionable when it was signed.268
A Massachusetts court invalidated an agreement because it was unfair when signed.269 Another Massachusetts case invalidated an agreement because it was unconscionable at divorce.270
In a New York case, before the wedding the woman had sold her art gallery in California and moved to New York, planning to marry a man living there. Two days before the planned wedding, she was presented with a one-sided premarital agreement. The man stated that, if she did not sign, he would cancel the planned wedding. Without consulting a lawyer, she signed the agreement. The appellate court ruled that these facts raised a triable issue of overreaching.271
Even if unfairness alone is considered a sufficient justification for not enforcing a marriage contract, courts disagree regarding the time at which the unfairness is to be determined. Some courts consider the fairness of the contract at the time of execution,272 while others evaluate the fairness at the time of divorce.273 The concern with the fairness of the agreement at the time of execution is puzzling. Admittedly, courts normally determine the unconscionability of a commercial contract according to the circumstances at the time of execution.274 Even so, marital contracts are somewhat different from commercial transactions. First, in marital contracts spouses plan for what will occur at dissolution. The marriage, however, may not be dissolved for decades. The term of most commercial contracts is much shorter. Second, important public policy concerns relate to the circumstances of the spouses at divorce, not at the time the contract was signed. The...
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