Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Antenuptial agreements or those entered into in advance of marriage continue to raise significant issues when they seek to be enforced at the time of divorce. These agreements, which were historically unenforceable because they were seen as promoting divorce, gradually became accepted throughout the country. With that acceptance, the courts turned their attention to ensuring that there was some element of fairness associated with them. Unlike commercial contracts, these agreements are between individuals who have a fiduciary duty to one another and they often are enforced after a long period of time during which unanticipated events often occur. Because of the state’s interest in the affairs of divorcing parties, a series of rules evolved to assess the fairness of the agreements. These rules focus primarily on two procedural issues and one substantive one. The first is the question of whether the contract was entered into voluntarily. Circumstances in execution of contract is considered The circumstances surrounding the execution of the contract are considered. These include timing and sometimes the other pressures that may cause a person to wish to marry and therefore enter into an agreement that is not otherwise in his or her best interests (i.e. pregnancy, threat of deportation). The second is the informed nature of the consent. In this regard, courts generally require a full disclosure of the assets involved in order to ensure that the party waiving rights in those assets has a clear understanding of the extent of the waiver. The disclosure requirements can vary from a detailed listing of the assets with corresponding values to a general description. The extent of a party’s opportunity to consult with an attorney to advise on the rights being waived is also considered. Finally, courts will vary on the issue of substantive fairness. One of the most important distinctions is whether fairness is to be assessed at the time of execution or when the agreement is to be enforced. In keeping with their suspicion regarding these agreements, courts historically scrutinized these contracts carefully with respect to both the procedural and substantive aspects. However, the trend that is emerging is one in which private ordering is valued with the effect of a great deal of deference to contracting parties. This is particularly true in those states that have enacted the Uniform Premarital Agreement Act (UPAA) with its clear preference for the enforcement of these agreements. Several recent cases are illustrative. In Marsocci v. Marsocci, 911 A.2d 690 (R.I. 2006), four days before the wedding the husband presented an agreement to the wife for her signature. The husband was represented by counsel, the wife was not. The agreement listed the husband’s real estate and other holdings but assigned no values to them. The wife had no assets at the time. They were married and six months later their son was born. The wife filed for divorce seven years later and the husband sought to enforce the antenuptial agreement. In reviewing the agreement the Family Court judge first focused on the voluntariness of the wife’s actions with respect to the execution of the contract. The judge concluded that, due to the absence of any values associated with the husband’s property, the wife could not be found to have voluntarily waived her rights with respect to it. She focused on the fact that the wife was unrepresented, which the judge believed should have triggered a more thorough disclosure of the property’s value. The trial court then addressed the issue of overall fairness. With an eye toward honoring the rights of parties to contract, most courts will invalidate an agreement only if it is found to be unconscionable. In this case, the fact that the husband left the marriage with virtually all the assets and the wife with nothing, prompted the judge to conclude that it was not a “substantively fair agreement” and therefore invalid. On appeal, the Rhode Island Supreme Court reversed the trial court’s judgment. In applying the state’s UPAA, the court outlined the wife’s significant burden in challenging the enforceability. It concluded that the wife had to prove that “she did not execute the agreement voluntarily and that it was unconscionable when it was executed and that she was not provided with a fair and reasonable disclosure of [the husband's] estate and his financial obligations before she signed the agreement and that she did not voluntarily and expressly waive disclosure.” A failure to prove any of these elements related to voluntariness, unconscionability and disclosure would result in the agreement being upheld. The Supreme Court reversed the trial judge’s finding that the wife did not enter into the agreement voluntarily because it found that the judge impermissibly focused on the lack of disclosure requirement in determining voluntariness. It found no independent evidence that the wife was not acting voluntarily at the time she signed the agreement in spite of the fact that she was unrepresented by counsel, pregnant and asked to assign the agreement four days before the wedding. As to the nondisclosure of the value of the property, the court concluded that the UPAA does not require that the assets and financial obligations must be set forth in the agreement; a party’s failure to do so is merely a factor that the court may consider in assessing the validity of the agreement. In this case, the court held that a statement in the agreement to the effect that each party acknowledged that the other had “fully disclosed [his or her] present approximate net worth” was sufficient to meet the UPAA requirements, even though it was not true. Finally, the Supreme Court addressed the issue of unconscionability. In this instance it agreed with the trial court’s judge’s assessment that the one-sided nature of the resulting distribution under the agreement defied the “basic underpinnings of the marital relationship” and was therefore unconscionable. In spite of this finding of unconscionablity, however, the court nevertheless found the agreement enforceable because the wife had failed to prove that it was not entered into “voluntarily” and that there was not the requisite disclosure. In Friezo v Friezo, 914 A.2d 533 (Conn. 2007), the wife was a British citizen of very limited means whose marriage was prompted by a desire to remain in this country. She was asked to sign an agreement that would protect the husband’s significant assets in the case of a divorce. The trial court, looking at the circumstances surrounding the signing of the agreement, concluded that there was not “fair and reasonable” disclosure of the husband’s assets as required by Connecticut’s version of the UPAA. The court focused on the fact that the wife originally was given a copy of 33 assets with no indication of their true nature or value. It also listed the husband’s holding as having an “Estimated Value: $000″ and failed to list any income for the defendant. The wife was referred to the husband’s sister-in-law’s law firm, where the attorney advising her failed to give the wife any advice or counsel, and failed to forward to her a more complete statement of the assets until 24 hours before the wedding, when she was given an opportunity to review the document. Her attorney was not present during this review, at the conclusion of which she signed the agreement. The trial court found that the attorney was either “incredibly incompetent in his representation of the plaintiff or he was not, in fact, representing her at all.” The court relied in part on the attorney’s “failure to secure any retainer agreement, exact a consultation fee or tender any bill for services.” ‘Fair and reasonable’ refers to substance of disclosure As in the Rhode Island case, the trial court was reversed. Here, the Connecticut Supreme Court concluded that under Connecticut law the term “fair and reasonable” refers to the substance of a party’s disclosure rather than to its timing. Second, the burden of financial disclosure and to inform need not take into account or depend on the capacity of the receiving party to understand or digest the information received. Third, “full” financial disclosure is required in a prenuptial agreement only if the party to whom disclosure is made does not have independent knowledge of the other party’s financial circumstances. Applying these factors to the present case, the court concluded that in spite of the fact that the attorney did not share the updated disclosure of assets form with the plaintiff, his knowledge of them was imputed to her. With respect to the trial courts finding of overreaching due to the disparity in the parties’ education and sophistication of financial matters, the court chastised the trial court for assuming that the wife was not able to appreciate the information being disclosed. It quoted a Pennsylvania high court decision that “[s]ociety has advanced . . . to the point where women are no longer regarded as the ‘weaker’ party in marriage, or in society generally . . . .It would be inconsistent, therefore, to perpetuate the standards governing prenuptial agreements that . . . [reflect] a paternalistic approach that is now insupportable.” Simeone v. Simeone, 581 A.2d 162, 165 (Pa. 1990). Finally, the court concluded that, because the wife had been able to fill her own schedule of assets (totaling about $22,000 in value), she must have understood the one supplied by the husband � a much larger, complex portfolio with a total value of $6.6 million. 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 of law at the University of Missouri-Kansas City School of Law. She can be reached at [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.