PREMARITAL AND MARITAL AGREEMENTS ACT

ARTICLE 1

GENERAL PROVISIONS

SECTION 101. SHORT TITLE. This Act may be cited as the “Uniform Premarital and Marital Agreement Act (20**)”

(1) “Marital agreement” means an agreement between spouses, not entered at a time when they are legally separated or when a petition for legal separation or dissolution of the

marriage has been filed or is about to be filed, whose intention and effect is to modify one or more of the following:

(A) the characterization of property during marriage as [marital or nonmarital] [marital or separate] [community or separate];

(B) the financial rights of the spouses in case of divorce, annulment, or legal separation, including property division, allocation of debt, and or alimony or spousal support; or

(C) the rights of a spouse against the other spouse’s estate, including but not limited to inheritance, dower, curtesy, elective share, homestead allowance, exempt property, and family allowance.

Marital agreements include agreements between spouses to modify or abrogate an

existing premarital agreement.

(2) "Premarital agreement" means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.

SECTION 103. APPLICABILITY OF CONTRACT LAW. This state’s principles of contract law apply, except to the extent that they are displaced by the provisions of this Act.

Commentary and Alternatives

Proposed Official Comments

Marital agreement: The definition is meant to exclude common daily transactions between

spouses, which are not focused on altering spousal rights on divorce or the rights against

a spouse’s estate (e.g., designation of a spouse as an insurance beneficiary or agreement

to purchase property under a tenancy by the entirety).

Alternatives to marriage: The extent to which this Act applies to official marriage-like

statuses, like civil unions, domestic partnerships, registered partnerships, and committed

intimate relationships, is a matter for state law.

Contract Law: Where this Act does not expressly displace common law contract rules

and principles, they apply. Thus, it is open to parties, e.g., to resist enforcement of

premarital and marital agreements based on legal incompetency, misrepresentation,

duress, undue influence, unconscionability, etc.. For example, agreements presented for

the first time hours before a marriage (where financial commitments have been made and

guests have arrived from far away) likely presents a clear case of duress, and would

(under most states’ laws) be voidable for that reason.

Commentary and Alternatives (for Committee)

Definition of “premarital agreement”:

(1) The proposed definition tracks the language of the Uniform Premarital

Agreement Act, with only minor changes.

(2) The ALI Principles defines it the following way:

“A premarital agreement is an agreement between parties contemplating marriage

that alters or confirms the legal rights and obligations that would otherwise arise

under these Principles or other law governing marital dissolution.” (7.01(1)(a))

Definition of “marital agreement”:
(1) ALI Principles: “A marital agreement is an agreement between spouses who plan

to continue their marriage that alters or confirms the legal rights and obligations that

would otherwise arise under these Principles or other law governing marital dissolution.”

(7.01(1)(b))

Displacement of Contract Law: While Section 103 may not be strictly necessary, I think it

would be very helpful, as a reminder to both judges and attorneys, that there are standard

contract law defenses that can be applied to the enforcement of premarital and marital

agreements. Pointing this out (in the text and commentary) allows the Act to focus on

whatever additional requirements or defenses to enforcement we believe should be

specific to premarital and marital agreements (rather than mashing everything together in

some unhelpfully vague term like UPAA’s “voluntariness”).

ARTICLE 2

PREMARITAL AGREEMENTS

SECTION 201. FORMATION REQUIREMENTS. A premarital agreement must be in writing and signed by both parties. It is enforceable without consideration.

SECTION 202. EFFECT OF MARRIAGE. A premarital agreement becomes effective upon marriage.

SECTION 203. CONTENT.

(a) Parties to a premarital agreement may contract with respect to:

(1) the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;

(2) the disposition of property upon separation, marital dissolution, or death;

(3) the characterization of property as community/marital or separate;

(4) the right to buy, sell, use, transfer, exchange, lease, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;

(5) the modification or elimination of spousal support, subject to Section 204;

(6) the making of a will, trust, or other arrangement to become effective at death;

(7) the rights against the other spouse’s estate including but not limited to inheritance, dower, curtesy, elective share, homestead allowance, exempt property, and family allowance.

(b) Parties may choose the law governing the construction of the agreement, as long as the state chosen has some connection with the parties or their marriage, but this state may refuse to enforce the chosen state’s rule of formation or interpretation if that provision offends this state’s strong public policy.

(c) A premarital agreement may not prescribe fault grounds for divorce, regulate behavior during marriage, define the parties’ rights of child custody, parenting time, access, visitation, or relocation, or adversely affect a child’s right to support.

SECTION 204. ENFORCEMENT.

(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that, before execution of the agreement, he or she was not provided fair and reasonable disclosure of the property or financial obligations of the other party. “Full financial disclosure” means a generally accurate description of the nature and value of available assets and liabilities. Disclosure will qualify as “full” even if a value is approximate or difficult to determine, and even if there are minor inaccuracies. A party’s independent knowledge of the nature and value of assets and liabilities, if sufficiently detailed, can substitute for disclosure. However, the duty of disclosure cannot be waived.

(b) A premarital agreement will not be enforceable if the party against who enforcement is sought did not have access to independent counsel prior to signing the agreement. “Access to independent counsel” means that a party has had adequate time and the financial ability to consult independent legal counsel before signing the agreement. The financial ability requirement can be met by an offer by the other party to pay for counsel. The right to access to independent legal counsel cannot be waived.

(c) A premarital agreement is not enforceable to the extent that enforcement will cause a party to be eligible for support under a program of public assistance at the time of enforcement. A court may refuse enforcement or exercise its equitable powers to modify the agreement’s terms, to avoid that outcome.

(d) There is a strong presumption in favor of the enforceability of premarital agreements. However, a court may modify, or refuse to enforce a premarital agreement, even one that meets the procedural requirements of this Act, if the agreement’s enforcement would result in “extreme unfairness.” The conclusion of “extreme unfairness” is an all-things-considered judgment, which can take into account procedural unfairness at the time the agreement was signed, but should focus primarily on the circumstances at the time of enforcement, including, but not limited to the following factors:

(1) How long the marriage lasted.

(2) How different the outcome is under the agreement compared to the outcome under state statutory and case-law.

(3) Whether the party against whom enforcement is sought has lost significant income-earning ability due to work at home, child-care, disease, or disability.

If the court is asked to declare an agreement unenforceable due to extreme unfairness, its conclusion, either for or against enforcement, must be supported by detailed written findings.

(e) Unless the agreement expressly states otherwise, terms in the agreement should be treated as divisible, such that the modification or non-enforcement of one provision will not require the modification or non-enforcement of other provisions or the agreement as a whole. (f) If there had been domestic violence at the time the premarital agreement was signed, and the perpetrator is the party seeking enforcement, the victim can elect to void the agreement. (g) If the agreement contains provisions that increase one party’s property or alimony rights based on the duration of the marriage, and that party is a victim of domestic violence within the marriage, the court shall modify the agreement such that the victim can dissolve the marriage and still receive the increased property or alimony rights, even though the time period established by the agreement has not yet been reached.

(h) If the agreement contains a choice of law provision, the agreement should be enforced under the terms of the chosen state’s law. If there is no choice of law provision, the court should apply the law of the state which has the strongest connection with the parties and their agreement at the time the agreement was signed. In either case, the court may refuse to enforce another state’s laws to the extent that they are contrary to the state’s own strong public policy.

Commentary and Alternatives

Proposed Official Comments

The general approach of this Act is that parties should be free, within broad limits, to

choose the financial terms on which they marry. The limits are those of due

process in formation, on one hand, and certain minimal standards of support

and substantive fairness at the point of enforcement.

Consideration: Generally, there have not been issues of consideration relating to the

enforcement of premarital agreements. Even if only one party was waiving his or

her rights, the other party could be said to be giving consideration by his or her

agreement to marry. The Act makes it clear that agreements will not be considered

unenforceable on consideration grounds.

Choice of Law: The justification for enforcing choice of law provisions is that if the

parties can choose the particular provisions that best serve their interests and needs,

why should they not be allowed to choose a package of provisions, as in the rules

of construction and validity given by a particular state? This choice is constrained

by the power of the enforcing court to refuse to enforce any rule or provision

contrary to the forum state’s strong public policy; it is also constrained by the

Act’s requirement that only states with some connection to the parties or their

marriage can be chosen.

Pensions: Waiver or modification of claims on a spouse’s pension are subject to

the constraints of applicable state and federal law, in particular ERISA.

Religious Premarital Agreements: Mahr provisions in Islamic marriage contracts should be

treated no differently than other premarital agreements. Whether particular mahr

agreements are enforceable may then turn on various factors specific to the practices

and conventions of the religious community and the understandings of the parties

to the specific agreement: e.g., whether any deferred mahr payment is due (as some

traditions hold that the payment is due only for some types of divorces and not for

others), and whether the payment is thought to supplant or to supplement other financial

rights at divorce (e.g., division of property and alimony).

Commentary and Alternatives (for Committee)

Statute of Frauds: The few courts who have considered the question have disagreed

on whether “part performance” might make an oral premarital agreement enforceable

despite the absence of a sufficient writing. The Act does not currently speak to the

issue one way or the other.

Scope of Premarital Agreements Relating to Divorce:

Grounds for divorce: The language tracks much of the case-law, in which agreements

(premarital, marital or separation) in which the parties agree not to use fault grounds

tend to be enforced, while agreements not to use no-fault grounds are not enforced,

on the basis of public policy.

Issues Relating to Children: Courts generally refuse to enforce premarital agreements

relating to children (custody, visitation, child support, and relocation), claiming that this

invades the courts’ obligation to protect the best interests of children. Consistent with

this general approach, some courts, UPAA Section 3(b), and this Act, enforce provisions

relating to child support, as long as the effect of those provisions is not to decrease the

amount the child will receive.

Alimony: A few states refuse to enforce premarital agreement provisions relating

to alimony. Others allow waiver of permanent alimony, but do not allow waiver

of temporary alimony.

General: The UPAA contains a general (and cryptic) clause stating that premarital

agreements can cover any other topic (that is, beyond property division and alimony) not

contrary to public policy. While this leaves discretion to the states, it offers no guidance

to lawyers, judges, and unrepresented parties. As there is a consensus in the case-law

regarding scope, restricting premarital agreements to the provisions discussed here –

alimony, property division, characterization of property, and (sometimes) provisions

which increase child support – and that position seems reasonable, I see no reason to be

coy on the matter.

Waiver of rights against the other spouse’s estate:

(1) Uniform Probate Code, § 2-313, basically tracks the language of the Uniform

Premarital Agreement Act, authorizing waivers of rights against the other spouse’s estate,

either before or during the marriage, subject to the claim that the agreement was entered

into involuntarily, or that there was a failure of disclosure combined with unconscionable

terms.

(2) Some state create a heightened standard before enforcing a waiver of rights against

an estate (e.g. in Arizona, agreement to waive widow’s allowance must be “clear and

explicit”)

(3) Financial Disclosure for Spousal Rights at Death: At least one state (Florida)

does not even require disclosure for death-focused agreements.

(4) At least two states (Florida and Georgia) require that such agreements be signed in

front of two witnesses.

Financial disclosure and waiver: While it is relatively common in legislation (including the

Uniform Premarital Agreement Act) and caselaw to treat a party’s waiver of financial

disclosure as an adequate alternative to full disclosure, the concern is that it may be too

easy to get a poorly informed and poorly advised party to sign an agreement that has

a “waiver of disclosure” provision inserted among its terms.

Arkansas has a middle position, requiring actual advice of counsel to waive

financial disclosure.

Choice of Law: The restriction of choice of law to states having some connection with

the parties or the marriage reflects the experience of the Uniform Law Commissioners

when dealing with the revised Uniform Commercial Code, where a wide choice of law

provision was universally rejected by the state legislatures considering it, forcing the

ULC to redraft, while a less wide-ranging provision, like the one in this Act, did much

better.

Alternatives would include allowing parties to choose any state’s law to

apply to their agreement (this had been the original position of the revised Article 1 of the Uniform Commercial Code, and is the position of UPAA Section 3(a)(7)); there

would always be the safeguard that the forum state has the right not to apply any rule that

was contrary to its strong public policy.

Conflict of laws: This Act does not modify existing conflict of laws rules relating to

premarital agreements (or, in the later section, marital agreements), but merely

endorses the application of normal principles (the principles that apply to all

contracts). The significance of that endorsement is based on the fact that courts,

with surprising frequency, ignore the conflict of laws question (e.g., when the

California Supreme Court in the Barry Bonds case applied California law, without

question or discussion, to an agreement that had been signed in Arizona by parties

who were Arizona residents). The hope is that express language in the relevant

statute will remind courts to avert to the issue. When Arizona residents sign an

agreement in Arizona, they do or should reasonably expect Arizona law to apply

to their agreement; when a different court applies entirely different law (without

any further justification based on “strong public policy”), it undermines planning

and predictability.

Domestic Violence: There are two provisions relating to domestic violence. The first

allows victims of domestic violence at the time an agreement is signed to avoid

enforcement of the agreement. While it may seem obvious that victims of domestic

violence could claim duress as a basis as a basis of non-enforcement, that contractual

defense has its own intricacies, and the Act reflects the view that a clear rule here is best.

Secondly, the Act allows victims of domestic violence during the marriage the

right to modify or remove provisions that make additional rights conditional on staying in

the marriage. It is against public policy to allow perpetrators of violence any

state-sanctioned basis to pressure their victims to stay in an abusive marriage.

The Act might also include a provision requiring attorneys negotiating premarital

agreements to certify that to the best of their knowledge there was no domestic violence

between the parties to the agreement.

Here is what the Uniform Collaborative Law Act has regarding domestic violence:

SECTION 15. COERCIVE OR VIOLENT RELATIONSHIP:

(a) Before a prospective party signs a collaborative law participation agreement, a prospective collaborative lawyer shall make reasonable inquiry whether the prospective party has a history of a coercive or violent relationship with another prospective party.

(b) A collaborative lawyer shall throughout the collaborative law process continue to reasonably assess whether the party the collaborative lawyer represents has a history of a coercive or violent relationship with another party.

(c) If the collaborative lawyer reasonably believes that the party the lawyer represents or the prospective party who consults the lawyer has a history of a coercive or violent relationship with another party or prospective party, the lawyer may not begin or continue a collaborative law process unless:

(1) the party or the prospective party requests beginning or continuing a collaborative law process; and

(2) the collaborative lawyer reasonably believes that the safety of the party or prospective party can be protected adequately during a collaborative law process.

Enforcement -- Extreme Unfairness: This doctrine reflects the view of the majority

of the states, that allows modification or non-enforcement of premarital agreements

based on perceived unfairness at the time of enforcement.

(1) ALI Principles:

- for formation, creates a “rebuttable presumption” that a premarital agreement was

voluntary, if (a) the agreement was executed 30 days before the marriage;

(b) both parties were advised to obtain independent legal counsel and had

reasonable opportunity to do so; and

being waived or altered is clearly explained, as is the fact that the interests

of the spouse may be adverse (ALI 7.04)

- at enforcement, creates a two-step process:

(i) if a (designated) significant amount of time has passed, a child was born

to or adopted by the couple, or a significant event unexpected at the time the

agreement was signed has occurred;

(ii) the party opposing enforcement has the chance to defeat enforcement

on the basis of “substantial injustice”: for that determination, the court

must consider the magnitude of the difference between the outcome under

the agreement and that under state law; for shorter marriages, the difference

between the outcome under the agreement and the likely circumstances

had the marriage not occurred; whether the agreement had the purpose and

effect of protecting third parties; and the impact of enforcement on the

couples’ children. (ALI 7.05)

(2) UPAA famously allows enforcement except in cases of lack of voluntariness, or the

combination of unconscionability and a failure of disclosure.

[This last combination – allowing enforcement even for agreements concluded

to be unconscionable – has been the subject of very wide criticism.]

(3) The Committee might consider alternatives that modify who has the burden of proof

(or even a shifting burden on proof, triggered by certain events)

(4) Maine earlier had a provision under which premarital agreements became

void 18 months after the birth or adoption of a child, unless expressly

affirmed in writing (the law was altered so it does not apply to agreements

entered after October 1993, but it remains an option for us to consider).

Other Topics: The Act could include an express authorization of provisions

awarding attorney’s fees for prevailing parties, or requiring arbitration of

disputes arising from the agreement.

ARTICLE 3

MARITAL AGREEMENTS

SECTION 301. FORMATION REQUIREMENTS.

(a) A marital agreement must be in writing, and signed by both parties. It is enforceable without consideration.

(b) Both parties must have had access to independent counsel prior to executing a marital agreement.

SECTION 302. CONTENT.

(a) Spouses entering into a marital agreement may contract with respect to:

(1) the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;

(2) the disposition of property upon separation, marital dissolution, or death;

(3) the characterization of property as community/marital or separate;

(4) the right to buy, sell, use, transfer, exchange, lease, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;

(5) the modification or elimination of spousal support, subject to Section 303;

(6) the making of a will, trust, or other arrangement to become effective at death;

(7) the rights against the other spouse’s estate including but not limited to inheritance, dower, curtesy, elective share, homestead allowance, exempt property, and family allowance.

(c) A marital agreement may not prescribe fault grounds for divorce, regulate behavior during marriage, define the parties’ rights of child custody, parenting time, access, visitation, or relocation, or adversely affect a child’s right to support.

SECTION 303. ENFORCEMENT.

(a) Spouses in an intact marriage are in a fiduciary relationship. For that reason, a marital agreement is not enforceable unless the party seeking to enforce the agreement proves that he or she gave full financial disclosure to the other party and that the terms of the agreement were substantively fair at the time the agreement was entered. “Full financial disclosure” means a generally accurate description of the nature and value of available assets and liabilities. Disclosure will quality as “full” even if a value is approximate or difficult to determine, and even if there are minor inaccuracies. A party’s independent knowledge of the nature and value of assets and liabilities, if sufficiently detailed, can substitute for disclosure. However, the duty of disclosure cannot be waived.

(b) A marital agreement is not enforceable unless the party seeking to enforce the agreement proves that he or she informed the other party in writing and in clear language, of the rights being waived or modified by the agreement.

(c) A court may modify, or refuse to enforce a marital agreement, even one that meets the procedural requirements of this Act, if its enforcement would result in “extreme unfairness.” The conclusion of “extreme unfairness” is an all-things-considered judgment, which can take into account procedural unfairness at the time the agreement was signed, but should focus primarily on the circumstances at the time of enforcement:

(1) How long the marriage lasted.

(2) How different the outcome is under the agreement compared to the outcome under state statutory and case-law.

(3) Whether the party against whom enforcement is sought has lost significant income-earning ability due to work at home, child-care, disease, or disability.

(4) Whether the agreement was motivated by the intention to protect the interests of third parties (e.g., children of a prior marriage), and whether enforcement of the agreement would still have the effect of protecting those interests. If the court is asked to declare an agreement unenforceable due to extreme unfairness, its conclusion, either for or against enforcement, must be supported by detailed written findings.

(d) A marital agreement is not enforceable to the extent that enforcement will cause a party to be eligible for support under a program of public assistance at the time of enforcement. A court may refuse enforcement or exercise its equitable powers to modify the agreement’s terms.

(e) Unless the agreement expressly states otherwise, terms should be treated as divisible, such that the modification or non-enforcement of one provision will not necessarily require the modification or non-enforcement of other provisions or the agreement as a whole.

(f) If there had been domestic violence at the time the marital agreement was signed, and the perpetrator is seeking to enforce the agreement, the victim can elect to void the agreement.

(g) If the agreement contains provisions that increase one party’s property or alimony rights the longer the marriage lasts, and that party is a victim of domestic violence within the marriage, the court shall modify the agreement such that the victim can dissolve the marriage and still receive the increased property or alimony rights, even though the time period established by the agreement has not yet been reached.

(h) If the agreement contains a choice of law provision, the agreement should be enforced under the terms of the chosen state’s law. If there is no choice of law provision, the court should apply the law of the state which has the strongest connection with the parties and their agreement at the time the agreement was signed. In either case, the court may refuse to enforce another state’s laws which are contrary to the state’s own strong public policy.

Commentary and Alternatives

Proposed Official Comments

[Many items and topics are the same as for premarital agreements.]

On Marital Agreements Generally: While some states treat marital agreements under the

same standard as premarital agreements, this Act follows the approach of many

states that marital agreements need to meet more stringent requirements to be

enforced. While the strong presumption of enforceability for premarital agreements

follows from the view that parties should be able to choose the terms on which

they marry, the less deferential standard for marital agreements reflects both the

significant risk of improper pressure and undue influence in negotiations between

spouses, and the concern that too often the effort to modify the financial terms

of an ongoing marriage is motivated by bad faith reasons.

Consideration: A number of court decisions have held particular marital agreements

unenforceable on consideration grounds. Unlike premarital agreements, where a party

that was not waiving rights could be said to have given consideration by the act of

marriage (or the promise to marry), a party to marital agreement who does not waive

or confer rights may not be giving consideration. The main use of consideration issues

in marital agreements (as in other areas of contract law, like the modification of

commercial agreements) was arguably as a proxy for other concerns, like duress

and exploitation. The preference expressed in this Act is that such concerns be

addressed directly, rather than indirectly, through the doctrine of consideration.

Fiduciary relationship: While courts frequently discuss whether parties to premarital

and marital agreements are in a fiduciary relationship, the upshot of this discussion is

usually (only) that there is a duty of financial disclosure. This act treats married

parties entering marital agreements (but not about-to-be-married parties entering

premarital agreements) as being fiduciaries, in the full sense courts elsewhere apply,

e.g., to lawyers entering commercial agreements with their clients.

Substantive fairness: The “substantive fairness” test is not meant to be a requirement

of an equal division, or even that the outcome under the agreement closely approximates

what the result would have been under the state’s statutes and case-law. It is rather

reaffirms the court’s equitable powers to refuse to enforce agreements that either

(a) lead to extremely one-sided results (especially if the marriage had been one of

many years); or (b) there are reasons to believe that the marital agreement was the

outcome of improper pressure, or that the party seeking the agreement did not have

good faith reasons for seeking it.

Circumventing agreements: There are agreements spouses enter that do not fit the Act’s

definition of a marital agreement, but which would have the purpose or effect of

indirectly changing spousal rights on divorce or death: e.g., where the parties agree

to an evaluation of an asset owned by one spouse, and that evaluation is significantly

higher or lower than the asset’s actual value. Courts should use their equitable powers

to prevent parties from circumventing the requirements of this Act (and the other

state rules relating to divorce and rights after a spouse’s death).

Commentary and Alternatives (for Committee)

[Many items and topics are the same as for premarital agreements.]

General validity: At least one state (Ohio) does not enforce any marital agreements, and

this rule has been applied also to attempts to amend to a premarital agreement during

the course of a marriage.

Independent Counsel: Some states (e.g., Minnesota) require that the parties be

represented by independent counsel (and not merely have opportunity to consult

independent counsel).

Reconciliation agreements: Some states appear to treat differently reconciliation agreements

(agreements entered when the marriage is in imminent danger of ending, and one

spouse gives up something in exchange for the other party’s agreement to stay in the

marriage) differently from other marital agreements. This Act creates no such sharp

distinction, but does take the circumstances of the marital agreement into account in

making determinations of enforceability.

Waiver of rights against the other spouse’s estate:

(1) Uniform Probate Code, § 2-313, basically tracks the language of the Uniform

Premarital Agreement Act, authorizing waivers of rights against the other spouse’s estate,

either before or during the marriage, subject to the claim that the agreement was entered

into involuntarily, or that there was a failure of disclosure combined with unconscionable

terms.

(2) At least one state (Florida) does not even require disclosure for death-focused

agreements.

(3) At least two states (Florida and Georgia) requires that these agreements be signed in

front of two witnesses

(4) Iowa does not allow spouses to waive their rights against their spouses’ estates in

marital agreements (though it does allow such waivers in premarital agreements).

Enforcement: As noted in the Commentary, one possibility is to treat reconciliation

agreements as enforceable and other marital agreements as not enforceable, or at least

to give reconciliation agreements a stronger presumption of enforceability than other

agreements.

Timing and Enforcement: Minnesota has the following provision for marital agreements:

“A postnuptial contract or settlement is presumed to be unenforceable if either

party commences an action for a legal separation or dissolution within two years of

the date of its execution, unless the spouse seeking to enforce the postnuptial

contract or settlement can establish that the postnuptial contract or settlement is

fair and equitable.”