Premarital and Postmarital Contracting

• Pages: 27-43
• Author: Walter Wadlington,Raymond C. O'Brien,Robin Fretwell Wilson

27

Chapter 2

PREMARITAL AND POSTMARITAL

CONTRACTING

I. Premarital Agreements

A. Modern Parameters

The ability of two adults entering into marriage—o r already

married—to contract in a valid agre ement between themselves is a

recent phenomenon. Until a few decades ago such agreements were

unenforceable because of the confidentiality existing between the two

parties or because of a married woman’s inability to contract

separately. The relatively recent evolution of family law brought

about changes in public policy, plus judicial and statutory

entitlements. As a result of these changes, it is now possible to

discuss the overall fairness of these agreements.

1

Today, couples increasingly execute premarital and marital

agreements that stipulate division of marital assets at divorce, terms

of support following dissolution, or disclaimer of interests and

entitlements at death. Although some statistics report only three

percent of engaged or married couples have prenuptial agreements,

2

the trend suggests that more couples entering into second marriages

will execute p remarital agreements so as to privately order their

financial and personal affairs. Concomitantly, all states e nforce

premarital agreements upon divorce or death if certain co nditions

are met.

3

Prior to marriage or, in some cases, during an intact marriage,

couples increasingly meet with an attorney to work through their

financial arrangements in the event of divorce or death, without

plans for either one to occur in the foreseeable future. Most often, one

of the parties desires to safeguard assets for a child or dependent

from a previous marriage, or one party seeks to isolate amassed

wealth in the event of divorce. The ability of the parties to supersede

the watchful control of state court s, which mandate distribution of

assets at divorce or death, is both extraordinary and recent.

1

See, e.g., Elizabeth R. Carter, Are Premarital Agreements Really Unfair?: An

Empirical Study, 48 HOFSTRA L. REV. 387 (2019).

2

Richard K. Greenstein, What is the Problem?, 13 GEO. J. L. & PUB. POL’Y 291

(2015).

3

See, e.g., Minnesota and New Jersey require that agreements be in writing.

MINN. STAT. § 513.075 (2024); N.J. STAT. ANN. § 25:1–5 (West 2024).

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PREMARITAL AND POSTMARITAL CONTRACTING

Ch. 2

A number of factors brought about this change in the contractual

ability of individu al parties. First, in 1976 the Supreme Court of

California he ld nonmarital couples have the c apacity to enter into

valid nonmarital contracts affecting the economic inciden ts of their

intimate relationship as long as the couple did not explicitly contract

for prostitution or sexual services. Second, beginning in the 1970s,

married women gained economic independence from their male

spouses, increasingly working outside the home and obtaining

independent economic and contractual status. As these economic

developments intensified, the economic deprivations associated with

divorce lessened with each passing year. Third, in 1969 California

became the first state to permit no-fault divorce, an innovation

quickly emulated by all other states. As a result of no -fault divorce,

the status of marriage lost some of its historical character and

definition. The no-fault spouse could easily be divorced by the fault

spouse, thereby lessening the security of marriage. Fourth, within

the home women claimed the right to say no and that decision is

enforceable at law. This is illustrated by statutes abolishing the

marital rape exception and greater enforcement of domestic violence

statutes at the state and federal level. And fifth, an increasing

number of persons live longer, amass greater wealth, enter into

second and third marriages, and seek to protect assets from

usurpation through divorce or alternatively, through survivorship at

death.

If there is resistance to premarital or postmarital agreements, it

arises be cause of concern over the “conscionability” of the

agreement.

4

Traditionally, the state enjoys a role as caretaker of

public interest, protecting the vulnerable, and ensuring equity.

Statistics indicate that a spouse working outside the home often

enjoys a personal professional career, which results in d isparity of

earning potential and, at least in common law jurisdictions, greater

opportunities to acquire marital assets in his or her name only. Very

often the other spouse works inside the home without a career and

amassing fewer assets, re sulting in disparity of income and earning

capacity and perhaps even negotiating ability in planning for divorce

or death. The disparity between the two adults invites the issue of

how to measure the conscionability of the agreement when two

independent adults assert at the time of execution that each knows

exactly what he or she is doing, yet later one ultimately claims he or

she was duped at the time the agreement is enforced.

The subjective nature of conscionability allows courts a f ree

hand in apportioning marital wealth, “[m]easuring an agreement by

4

See, e.g., Matter of Estate of Gillette, 2020 WL 2601993 (N.J. Superior Ct.

2020) (holding an agreement is unconscionable if there is clear and convincing

evidence of a lack of full financial disclosure).