5.1 Post-nuptial (marital) Agreements Generally

• Library: Negotiating and Drafting Marital Agreements (Virginia CLE) (2023 Ed.)

5.1 POST-NUPTIAL (MARITAL) AGREEMENTS GENERALLY

5.101 In General.

A. "Boilerplate" Provisions.

Standard provisions in agreements are often referred to as "boilerplate" by practitioners. Boilerplate provisions are necessary to all agreements and, in most cases, are vital to the marital agreement. Boilerplate terms, however, are rarely negotiated and are added at the last minute when the document itself is being drafted. Often, in settlement letters, the practitioner states something to the effect of "and the agreement will include the normal boilerplate language used in agreements in this area." Such a statement can pose problems. First, you may be dealing with opposing counsel who is not from your geographic area using boilerplate that is markedly different from yours, and the result can change the agreement you thought you had negotiated. Second, even though the provisions are referred to as boilerplate, they constitute substantive terms that need to be negotiated in order to reach an agreement. Leaving these terms until the last minute can sideline the deal you thought you made. Finally, depending upon whom you represent, there is boilerplate language that you simply may not want in the agreement, which necessitates bringing that language into the negotiating process.

While we refer to it as boilerplate language, such language needs the practitioner's undivided attention and understanding. The practitioner must understand many areas of the law that he or she rarely, if ever, engages with in practice. Boilerplate language pertains to trusts and estates, contracts, tax issues, bankruptcy, choice of laws—to name a few areas of the law. If the practitioner does not understand the boilerplate language, then the potential for malpractice is high. If necessary, counsel should consult with lawyers in other areas of practice to ensure the boilerplate is understood and, equally as important, to make sure that the law has not changed and the boilerplate is still effective.

For example, if your author were to set foot in bankruptcy court, it would be malpractice per se. Therefore, the author consulted several bankruptcy attorneys to develop and draft the bankruptcy-related provisions contained in the appendices to this chapter. ⁷⁷⁶ In short, know what the language means, stay on top of it in case the law changes, and consult other practitioners for assistance with all of the above.

When using boilerplate language, it is important to remember whom you represent. Do not make the mistake of using all the same boilerplate provisions in every agreement. For example, if you represent the party who is assuming debts in the agreement, you may not want indemnification or bankruptcy language in the agreement because of the increased responsibility such language places on your client. Always consider what could happen after the agreement is executed. If you represent the party who could be harmed by a bankruptcy, consider the very real possibility that the other party will attempt to bankrupt the obligation assumed in the agreement. Therefore, in that situation you should include bankruptcy language. It is also important to realize that the terms in one paragraph of your agreement can have an unintended impact upon the terms of another paragraph in the future. In Miller v. Miller, ⁷⁷⁷ the property settlement agreement included a provision regarding health insurance. That provision stated that the parties would each be responsible for payment of their health insurance premiums. The specific language was, "[a]s of the date of divorce, each party shall be responsible for his or her own medical and dental expenses and medical insurance." This standard language is considered boilerplate in many areas of the state. The agreement also had a spousal support provision that allowed for modification based on a change in circumstances. Later, the wife petitioned for an increase in spousal support because her medical insurance costs had increased. The Court of Appeals ruled that she was not entitled to an increase in support because she was "responsible for" her own health insurance costs. This is an example of a pitfall for the practitioner. It is unlikely that either party thought that the boilerplate health insurance provision would have such a far-reaching impact.

Also, use your boilerplate language to protect your agreement if challenged. Include language that states that the parties agree that the terms of the agreement are not unconscionable, that it was entered into voluntarily and without coercion, and that the parties to the agreement have received full disclosure of assets, etc. ⁷⁷⁸ Pay attention! If you did not draft the agreement, read the boilerplate. It can be an eye-opening experience that will protect you and your client.

B. Types.

The different types of marital agreements include full separation agreements (property settlements) and the narrower support, custody, and visitation agreements. Although lawyers and judges in Virginia use "separation agreement" and "property settlement" interchangeably, in other states the two terms occasionally have subtly different legal meanings.

Married persons may enter into agreements with each other ("marital agreements") to settle their rights and obligations even if they are not contemplating divorce. Those agreements are subject to the same conditions as premarital contracts, ⁷⁷⁹ except that marital agreements are effective immediately upon execution. ⁷⁸⁰ Couples also can enter into contracts addressing religious obligations that may or may not be enforceable upon divorce. ⁷⁸¹

C. Bifurcation.

Although it is preferable to resolve all marital issues regarding property, child custody, and support rights in the same agreement, it is not always possible for the parties to reach agreement on each of these issues. If the parties are able to reach agreement on some issues but not others, it may be possible to bifurcate the issues. ⁷⁸² Under section 20-107.3 of the Virginia Code, "[t]he court, on the motion of either party, may retain jurisdiction in the final decree of divorce to adjudicate the

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