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Many family law practitioners report an increase in requests to review or prepare antenuptial or prenuptial agreements. The standards governing the execution and enforcement of these agreements vary significantly from jurisdiction to jurisdiction. In this column we will discuss these variations and then offer some practical tips for avoiding the pitfalls commonly associated with this area of practice. Attitude on prenups started to change years ago A prenuptial agreement is basically intended to alter the rules that would generally govern the distribution of property or the provision of support at death or divorce. Historically, these agreements, when designed to take effect upon the granting of a divorce, were held to be invalid on the ground that they “promoted” divorce and were therefore in violation of public policy. This attitude began to change in the 1970s, and by 1983 the National Conference of Commissioners on Uniform State Laws had completed the Uniform Premarital Agreement Act. The act was subsequently endorsed by the American Bar Association and has now been adopted in half the states and the District of Columbia. Where the act has not been adopted, many states have approved the use of premarital agreements through case law. To be valid, antenuptial agreements must first meet the traditional standards for a valid contract. They must be supported by consideration, entered into voluntarily by competent parties, in accordance with public policy, and they must comply with any applicable statute of frauds. In addition to these requirements, however, there are additional standards due to the subject matter of the contract, the relationship of the contracting parties and the possibility that the circumstances existing at the time of execution may be very different from when the contract is to be enforced. The additional requirements relate to both procedural and substantive fairness. The first procedural requirement relates to the question of voluntariness. Most courts have held that because the parties are in a special relationship (often referred to in the case law as a fiduciary relationship even before the parties are married) with a greater potential for overreaching, the circumstances surrounding the entry into the agreement must be more carefully reviewed. This translates into a concern about duress. When a contract is presented for signature close to the date of marriage, attorneys should be very concerned about a later claim that the contract was entered into under duress. Ideally, these contracts should be drafted before a wedding date has been set. If the date has been set, or if the agreement is being presented immediately before the wedding, you may want to advise that the couple can, with sufficient time and no duress, negotiate a marital agreement after the wedding if your jurisdiction recognizes postnuptial agreements. The second procedural requirement relates to the necessity for full disclosure in order to ensure that the waiver of rights is informed. The rationale behind this requirement is that a waiver of rights in property or support can only be “knowing” if the party understands the extent of the property and his or her rights with respect to it. Agreements that are challenged as violating this requirement generally focus on a lack of disclosure or a party’s lack of understanding regarding his or her rights. Clearly, the best way to handle this situation is to make sure that each of the parties is independently represented. It is probably best that the party who is receiving the prenuptial agreement independently select his or her counsel, without a recommendation from the drafting party. While the lack of independent legal advice may not invalidate the agreement, it is clearly a factor that courts will consider. Given the close scrutiny that courts will engage in regarding these procedural issues, the formality of signing and acknowledging the agreement is very important. The signings of many antenuptial agreements are now videotaped, a service that can be provided by your local court stenographic service. During that taping, if you represent the moneyed spouse you should carefully question the other party as well as your own client as to his or her understanding of the effect of the agreement. You should ask such questions as: “Do you realize that you are giving up the right to ask for any support, other than the amount set forth in article, when you sign this agreement?” “Do you understand that if you do not sign this agreement and there is a divorce in the future you might have more rights in a divorce?” “Do you know that if a court was to determine your future support-and there was no agreement limiting support-that a court might grant you even more monetary support?” There are a number of important inquiries to be made about voluntariness and lack of duress. If the signing is not videotaped, the four parties (counsel and the couple) could audiotape the same type of inquiries. They could also have a stenographer present before it was signed and questions could be posed to both parties. We now turn to the important issue of substantive fairness. What terms can be included in these agreements and what standard of fairness will the court employ? As a general rule, the agreement can contain provisions relating to property, support and the children of the couple. Clients should be informed, however, that any provisions relating to children are always subject to the court’s finding that they are in the best interests of the children. The court will not abrogate its parens patriae function regarding children, and therefore these terms are always subject to revision. Measuring the substantive fairness of the agreement raises additional questions. First, what is the standard of fairness? Second, is fairness to be determined at the time of execution or at enforcement? Third, are there different standards that apply to terms related to property distribution as opposed to those that relate to support? The Uniform Premarital Agreement Act provides for very limited circumstances under which an agreement will be invalidated on the ground of fairness. The act uses a standard of “unconscionability” and then goes on to state that a finding of unconscionability will only invalidate the agreement if there was a lack of full disclosure, a waiver of full disclosure or where the disadvantaged party did not know or could not have reasonably known of the property of the other party. Many jurisdictions review provisions relating to support using a different standard. Some do not permit parties to alter their support obligations, including those that may arise for common law duties such as that under the law of necessaries. Others allow provisions relating to support but will evaluate the fairness of them at the time the contract is to be enforced. Under the Uniform Premarital Act, the court can invalidate provisions relating to support only as necessary to eliminate eligibility for public assistance. Given these parameters, if you represent the party who comes to the marriage with significant assets that he or she wishes to protect, it may be advisable to make some relatively generous provisions for support where the moneyed spouse keeps all the tangible and intangible property that the party had at marriage (and all appreciation). Tie amount of support to length of marriage The agreement will look more fair 20 years after marriage if there are generous provisions for spousal support. One suggestion is to tie the amount of support to the length of the marriage, allowing increasing support as the marriage matures. Another provision to consider is the awarding of the marital residence to the spouse who retains custody of the children. The court is more likely to view such a provision more favorably than one that would require the custodial parent who is also the nonmonied spouse to vacate the residence. Also, if you are asked either to draft an agreement or to represent the party who is reviewing and revising an agreement, your retainer agreement should indicate that you will be entitled to your future standard hourly fees (or fees at a specified rate set forth now) if you are deposed or if you have to testify as a witness if the agreement is challenged. You need to recognize and advise your client that if there is a challenge to the agreement in the future you will likely be disqualified and not available to act as his or her counsel in a future divorce. You will be considered to be a witness to the execution of the agreement and perhaps need to testify with respect to the issue of voluntariness. This may be a reason that a former divorce client will ask you to have another unassociated counsel represent him or her in drafting the antenuptial agreement, therefore leaving you free to represent them if the new marriage faces dissolution. In addition, no matter what your arrangement with your client, be sure to keep all drafts, financial disclosure and correspondence in your files, and also make sure that your client is advised to retain those documents. Barbara Handschu is a solo practitioner with offices in New York City and Buffalo, N.Y. She can be reached via e-mail at [email protected]. Mary Kay Kisthardt is a professor at the University of Missouri-Kansas City School of Law. She can be reached via e-mail at [email protected].

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