D R A F T
FOR
DISCUSSION ONLY
PREMARITAL
AND MARITAL AGREEMENTS ACT
NATIONAL
CONFERENCE OF COMMISSIONERS
ON UNIFORM
STATE LAWS
MEETING
IN ITS ONE-HUNDRED-AND-TWENTIETH YEAR
VAIL, COLORADO
JULY 7 - JULY 13, 2011
PREMARITAL
AND MARITAL AGREEMENTS ACT
WITH PREFATORY NOTE AND COMMENTS
Copyright 82011
By
NATIONAL
CONFERENCE OF COMMISSIONERS
ON UNIFORM
STATE LAWS
The ideas and conclusions set forth
in this draft, including the proposed statutory language and any comments or
reporter=s notes, have not been passed upon by the National
Conference of Commissioners on Uniform State Laws or the Drafting
Committee. They do not necessarily
reflect the views of the Conference and its Commissioners and the Drafting
Committee and its Members and Reporter.
Proposed statutory language may not be used to ascertain the intent or
meaning of any promulgated final statutory proposal.
May 24, 2011
DRAFTING COMMITTEE ON
PREMARITAL AND MARITAL AGREEMENTS ACT
The Committee appointed by and
representing the National Conference of Commissioners on Uniform State Laws in
drafting this Act consists of the following individuals:
BARBARA A. ATWOOD, University of Arizona,
James E. Rogers College of Law, 1201 E. Speedway, P.O. Box 210176,
Tucson, AZ 85721-0176, Chair
TURNEY P. BERRY, 500 W. Jefferson
St., Suite 2800, Louisville, KY 40202
STANLEY C. KENT, 90 S. Cascade
Ave., Suite 1210, Colorado Springs, CO 80903
KAY P. KINDRED, University of
Nevada, Las Vegas, William S. Boyd School of Law, 4505 S. Maryland Pkwy., Box 451003, Las
Vegas, NV 89154-1003
SHELDON F. KURTZ, The University
of Iowa College of Law, 446 BLB, Iowa City, IA, 52242
ROBERT H. SITKOFF, Harvard Law
School, 1575 Massachusetts Ave., Cambridge, MA 02138
HARRY L. TINDALL, 1300 Post Oak
Blvd., Suite 1550, Houston, TX 77056-3081
SUZANNE B. WALSH, P.O. Box
271820, West Hartford, CT 06127
STEPHANIE J. WILLBANKS, Vermont
Law School, 164 Chelsea St., P.O. Box 96, South Royalton, VT 05068
BRIAN H. BIX, University of
Minnesota Law School, Walter F. Mondale Hall, 229 19th Ave. S., Minneapolis, MN 55455-0400, Reporter
EX
OFFICIO
ROBERT A. STEIN, University of
Minnesota Law School, 229 19th Ave. S., Minneapolis, MN 55455, President
GAIL HAGERTY, South Central Judicial
District, P.O. Box 1013, 514 E. Thayer Ave., Bismark, ND 58502-1013, Division Chair
AMERICAN
BAR ASSOCIATION ADVISOR
CARLYN
S. MCCAFFREY, 340 Madison Ave., New York, NY 10173-1922, ABA Advisor
LINDA
J. RAVDIN, 7735 Old Georgetown Rd., Suite 1100, Bethesda, MD 20814-6183, ABA Advisor
EXECUTIVE
DIRECTOR
JOHN A. SEBERT, 111 N. Wabash Ave., Suite 1010,
Chicago, IL 60602, Executive Director
Copies of this Act may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
111 N. Wabash Ave., Suite 1010
Chicago, Illinois
60602
312/450-6600
www.uniformlaws.org
PREMARITAL AND MARITAL AGREEMENTS ACT
TABLE OF CONTENTS
Prefatory
Note. 1
SECTION 1. SHORT
TITLE.. 3
SECTION 2.
DEFINITIONS. 3
SECTION 3.
APPLICABILITY OF CONTRACT LAW. 5
SECTION 4.
GOVERNING LAW. 5
SECTION 5.
FORMATION REQUIREMENTS. 6
SECTION 6.
EFFECTIVE DATE OF AGREEMENT. 7
SECTION 7. VOID
MARRIAGE.. 7
SECTION 8. SCOPE
OF AGREEMENT. 7
SECTION 9.
ENFORCEMENT. 11
SECTION 10.
REVOCATION OF AGREEMENT. 12
SECTION 11. LIMITATION
OF ACTIONS. 13
SECTION 12.
UNIFORMITY OF APPLICATION AND CONSTRUCTION.. 13
SECTION 13.
RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. 13
SECTION 14.
SAVINGS CLAUSE.. 13
[SECTION 15.
REPEALS] 13
SECTION 16.
EFFECTIVE DATE.. 14
PREMARITAL AND MARITAL AGREEMENTS ACT
SECTION 1. SHORT TITLE. This [act]
may be cited as the “Premarital and Marital Agreements Act.”
SECTION 2. DEFINITIONS. In this
[act]:
(1) “Amendment” means a modification of the terms of a
premarital or marital agreement which does not result in the revocation of the agreement.
(2) “Child custody” means the physical or legal custody of
a child, visitation, access, parenting time, or other form of custodial
responsibility or decision-making for a child.
(3) “Marital agreement” means an agreement between spouses
the primary purpose of which is to alter or waive legal rights and obligations that
would otherwise arise between the spouses under applicable law during the
marriage, at separation, at marital dissolution, or at the death of one of the
spouses, and which has no other significant legal or economic purpose. The term includes an agreement to alter a
premarital agreement or prior marital agreement. The term does not include a separation
agreement, marriage settlement agreement, or other agreement incident to
marital dissolution or separation.
(4) “Marital dissolution” means the ending of a marriage by
court decree. The term includes divorce,
dissolution, and annulment.
(5) “Premarital
agreement” means an agreement between individuals contemplating marriage the primary
purpose of which is to alter or waive the legal rights and obligations that
would otherwise arise between them during the marriage, at separation, at marital
dissolution, or at the death of one of them, and which has no other significant
legal or economic purpose.
(6) “Property” means all property, whether real, personal,
or mixed, or tangible or intangible, or any right or interest
therein.
(7) “Record” means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(8) “Separation” means
a court-decreed separation of spouses which does not terminate the marriage.
(9) “Sign” means with
present intent to authenticate or adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic symbol, sound,
or process.
(10) “State” means a
state of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, or any territory or insular possession subject to the jurisdiction
of the United States.
Legislative
Note: The extent to which this act applies to officially recognized
non-marital relationships, such as civil unions and domestic partnerships, is a
matter for state law other than this [act].
Comment
With premarital agreements, the
nature and timing of the agreement (between parties who are about to marry)
reduces the danger that the act’s language will accidentally include types of
transactions that are not thought of as premarital agreements and should not be
treated as premarital agreements. There
is a greater concern with marital agreements, since (a) spouses enter many
otherwise enforceable financial transactions, most of which are not problematic
and should not be made subject to special procedural or substantive
constraints; and (b) there are significant questions about how to deal with
agreements whose primary intention may not be to waive one spouse’s rights at
dissolution of the marriage or the other spouse’s death, but where the
agreement nonetheless has that effect.
In terms of another uniform act, the purpose is to exclude from coverage
“acts and events that have significance apart from their effect” upon rights at
dissolution of the marriage or at the death of one of the spouses. See Uniform
Probate Code, Section 2-512 (“Events of Independent Significance”). Such transactions might include (but are by
no means limited to) the creation of joint and several liability through real
estate mortgages, motor vehicle financing agreements, joint lines of credit,
overdraft protection, loan guaranties, joint income tax returns, creation of
joint property ownership with a right of survivorship, joint property with
payment on death provisions or transfer on death provisions, durable power of
attorney or medical power of attorney, buy-sell agreements, agreements regarding
the valuation of property, the placing of marital property into an irrevocable
trust for a child, the drawing up of joint wills, etc.
The definition of “premarital
agreement” is a slightly-modified version of the definition used in the
American Law Institute’s Principles of
the Law of Family Dissolution. The
shorter definition of “premarital agreement” used by the Uniform Premarital
Agreement Act (“an agreement between prospective spouses made in contemplation
of marriage and to be effective upon marriage”) had the disadvantage of
encompassing agreements that were entered by couples about to marry but which
were not intended to affect the parties’ rights and obligations upon divorce or
death, e.g. Islamic marriage contracts, with their deferred mahr payment provisions. See Nathan B. Oman, “Bargaining in the Shadow
of God’s Law: Islamic Mahr Contracts and the Perils of Legal
Specialization,” 45 Wake Forest Law
Review 579 (2010); Brian H. Bix, “Mahr
Agreements: Contracting in the Shadow of
Family Law (and Religious Law) – A Comment on Oman,” 1 Wake Forest Law Review Online 61 (2011), available at http://lawreview.law.wfu.edu/articles/.
SECTION 3. APPLICABILITY
OF CONTRACT LAW. The common law of contracts
and principles of equity supplement this [act], except to the extent modified
by this [act] or another statute of this state.
Comment
Although this section is similar to
Section 106 of the Uniform Trust Code and
Section 1-103(b) of the Uniform Commercial
Code, the need to include such a provision in this act is still under
discussion. Because this act contains
broad, amorphous defenses to enforcement like “voluntariness” and
“unconscionability” (section 9), there is a significant risk that parties, and
even some courts, might assume that other conventional doctrinal contract law
defenses are not available because preempted.
This section is intended to make clear that common law contract doctrine
and principles of equity continue to apply where the act does not expressly
displace them. 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, abandonment, waiver, etc.
For example, a premarital agreement presented to one of the parties for
the first time hours before a marriage (where financial commitments have been
made and guests have arrived from far away) clearly raises issues of duress,
and might be voidable on that ground. Rules
of construction, including rules of severability of provisions, are also to be
taken from state rules and principles. Additionally,
state rules and principles will govern the ability of parties to include
elevated formalities for the revocation or amendment of their agreements.
SECTION 4. GOVERNING
LAW. The validity,
enforceability, and construction of the terms of a premarital or marital
agreement are determined by:
(1) the law of the
jurisdiction designated in the terms, [if that jurisdiction has a significant relation to the agreement or
either of the parties, and] unless the designation of that jurisdiction’s law
is contrary to a strong public policy of the jurisdiction having the most
significant relationship to the matter at issue; or
(2) in
the absence of a controlling designation in the terms of the agreement, the law
of the jurisdiction having the most significant relationship to the matter at
issue.
Comment
This section is taken from the Uniform Trusts Act, Section 107 [with
the bracketed section adding language taken from the Revised Article 1 of the Uniform Commercial Code, Section 1-301].
It is consistent with Uniform Premarital Agreement Act,
Section 3(a)(7), but goes into greater detail. The section reflects traditional Conflict of
Laws and choice of law principles relating to the enforcement of
contracts. See Restatement (Second) of
Conflict of Laws, Sections 186-188 (1971). These conflict of laws
principles include the authority of courts to refuse to enforce the rule(s) of
another jurisdiction, even if that jurisdiction has the most significant
relationship to the agreement, if that other jurisdiction’s rules are contrary
to the strongly held public policy of the enforcing state. “Significant relation” and “strong public
policy” are to be understood under existing state principles relating to
conflict of laws.
The bracketed terms are present for
those states that prefer that parties be able to choose law to govern their
agreement only from those jurisdictions that have some significant connection
to the agreement (a restriction present, e.g.,
in the Uniform Commercial Code).
SECTION 5. FORMATION REQUIREMENTS. A premarital or marital
agreement must be in a record and signed by both parties and is enforceable
without consideration.
Comment
This section is adapted from Uniform Premarital Agreement Act,
Section 2. Almost all jurisdictions
currently require premarital agreements to be in writing. A small number of jurisdictions have allowed
oral premarital agreements to be enforced based on partial performance. E.g., In re Marriage of
Benson, 7 Cal. Rptr. 3d 905 (App. 2003). This act does not authorize enforcement of
oral premarital agreements on that basis.
It is the consensus view of
jurisdictions and commentators that premarital agreements are or should be
enforceable without (additional) consideration.
In any event, those states that have looked for consideration for the
waiver promises in premarital agreements have concluded that the other party’s
agreement to marry or the act of marrying constitute valid legal
consideration. However, most modern
approaches to premarital agreements have by-passed the consideration requirement
entirely: e.g., Uniform Premarital Agreement Act, Section 2; American Law Institute,
Principles of the Law of Family
Dissolution, Section 7.01, comment c (2002);
Restatement (Third) of Property,
Section 9.4 (2003).
In some states, there is case-law raising issues
relating to a consideration requirement for marital agreements. The view of this act is that marital
agreements, otherwise valid, should not be made unenforceable on the basis of a
purported lack of consideration. As the
American Law Institute wrote on the distinction (not requiring additional consideration
for enforcing premarital agreements, but requiring it for marital
agreements): “This distinction is not
persuasive in the context of a legal regime of no-fault divorce in which either
spouse is legally entitled to end the marriage altogether.” Principles of the Law of Family Dissolution,
Section 7.01, comment c (2002). On the conclusion that consideration should
not be required for marital agreements, see also Restatement (Third) of Property, Section 9.4 (2003) and Model Marital Property Act, Section 10
(1983).
SECTION 6. EFFECTIVE DATE OF AGREEMENT. A
premarital agreement is effective on marriage.
A marital agreement is effective on execution unless the agreement
provides otherwise.
Comment
This section is adapted from Uniform Premarital Agreement Act,
Section 4. The Committee took notice of
the practice that parties sometimes enter agreements that are part cohabitation
agreement and part premarital agreement.
This act deals only with the provisions triggered by marriage, without
undermining the enforceability of the cohabitation agreement during the period
of cohabitation.
SECTION 7.
VOID MARRIAGE. If a marriage is determined to be void, a
premarital or marital agreement that would otherwise be enforceable under this [act]
is enforceable to the extent necessary to avoid an inequitable result.
Comment
This section is adapted from Uniform Premarital Agreement Act,
Section 7. For example, if John and Joan
went through a marriage ceremony, preceded by a premarital agreement, but,
unknown to Joan, John was still legally married to Martha, the marriage between
John and Joan would be void, and whether their premarital agreement should be
enforced would be left to the discretion of the court, taking into account
whether enforcement in whole or in part would be required to avoid an
inequitable result.
SECTION 8. SCOPE OF AGREEMENT.
(a) Subject to subsection (b), a premarital or marital agreement
may include terms relating to:
(1)
the rights and obligations of each of the parties in
any of the property of either
or both of them, whenever acquired and wherever located;
(2) the
characterization of property or debt during the marriage as [community][marital]
or separate;
(3)
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;
(4) the disposition of property or
debt on separation, marital dissolution, death, or the occurrence or
nonoccurrence of any other event;
(5)
the modification or elimination of spousal support;
(6)
the rights of either or both spouses to interests in
trusts, inheritances, bequests, gifts, and expectancies created by third
parties;
(7)
the making of a will, trust, beneficiary designation, or
other governing instrument to carry out the provisions of the agreement;
(8)
the rights in property arising at or after the death of either party, including
inheritance, dower, curtesy, elective share, homestead allowance, exempt
property, and family allowance;
(9)
appointment of a fiduciary, guardian, personal
representative, or agent for person or property;
(10) tax
matters;
(11)
methods for resolution of disputes arising under the
agreement, including arbitration, mediation, and collaborative law provisions;
(12) choice
of law governing the validity, enforceability, and construction of the
agreement;
(13) amendment
of a prior premarital or marital agreement between the parties;
(14) formalities
required to amend or revoke the agreement in addition to those required by this
[act]; and
(15) any other matter not in
violation of public policy or a statute imposing criminal penalties.
(b) A term in a premarital or marital
agreement is not enforceable to the extent that it:
(1) adversely affects a child’s right to support;
(2) limits or expands the grounds for marital dissolution or
separation otherwise available under law of this state other than this [act];
(3) requires or forbids a court to evaluate marital
conduct in determining the economic consequences of separation, marital
dissolution, or death, except as the term is consistent with applicable law of
this state other than this [act];
(4) penalizes a party for
initiating the legal action leading to a decree of marital dissolution or
separation; or
(5) limits or restricts remedies
available to a victim of domestic violence under law of this state other than
this [act].
(c) A term in a
premarital or marital agreement that defines the rights and responsibilities of
the parties regarding child custody is not binding on a court, but a court may
consider the term in determining child custody.
Legislative Note: A state should select the appropriate term for
subsection (a)(2):
either “marital” or “community.”
Comment
This
section is adapted from Uniform
Premarital Agreement Act, Section 3(a).
Subsection (b)(2), (3) & (4) are adapted
from the American Law Institute, Principles
of the Law of Family Dissolution, Section 7.08.
Relating
to subsection (a)(7), the Committee is aware that some
states have provisions that forbid or discourage agreements to make wills. This subsection is not intended to override
such state laws or principles.
Amendment
and revocation of premarital and marital agreements is governed by a number of
provisions in this section and other sections of this act. Under section 3, the state’s general contract
law rules and principles determine whether and how the parties can vary the
formalities or other requirements for amendment or revocation. Section 8(a)(14)
reaffirms that a provision establishing heightened formalities and other
requirements for amendment or revocation is a legitimate provision for a
premarital and marital agreements.
Actual modification of a premarital agreement or prior marital agreement
is a marital agreement (see section 8(a)(13)) falling
under the constraints of section 8(b) and (c) and section 9. However, a revocation of an agreement
requires only a signed, written agreement (as long as the parties have not
earlier agreed to further requirements for a revocation). See section 10.
The
Committee has taken notice of the general consensus in the case-law that courts
will not enforce premarital agreement provisions relating to topics beyond the
parties’ financial obligations inter se. In particular, courts have concluded that the
parties cannot waive their children’s right to child support payments (though
some courts have held enforceable agreements that would increase such payments beyond the amount set by state law). And while courts generally refuse to enforce provisions
in premarital and marital agreements that regulate (or attach financial penalties
to) conduct during the marriage, e.g.,
Diosdado v. Diosdado, 118 Cal.
Rptr.2d 494 (App. 2002) (refusing to enforce provision in agreement imposing financial
penalty for infidelity); Marriage of
Dargan, 13 Cal. Rptr. 522 (App. 2004) (refusing to enforce provision that
penalized husband’s drug use by transfer of property), the act does not
expressly deal with such provisions (beyond subsection (a)(15), leaving issues
of public policy to each state’s courts), in part because a few courts have
chosen to enforce premarital agreements relating to parties’ cooperating in
obtaining religious divorces or agreeing to appear before a religious
arbitration board. E.g., Avitzur v. Avitzur, 446 N.E.2d 136 (N.Y. 1983) (holding
enforceable religious premarital agreement term requiring parties to appear
before religious tribunal and accept its decision regarding a religious
divorce).
While there appear to be scattered
cases in the distinctly different context of separation agreements where a
court has enforced the parties’ agreement to avoid fault grounds for divorce
e.g., Masser v. Masser, 652 A.2d 219
(N.J. App. Div. 1994) (and we are aware of no case law enforcing an agreement
to avoid no-fault grounds), taking
into account the different context in which premarital and marital agreements
are entered, the Committee preferred the position of the American Law
Institute, that agreements affecting divorce grounds in any way should not be
enforceable.
The Committee took notice of the
common practice of escalator clauses in premarital and marital agreements,
making parties’ property rights vary with the length of the marriage. Subsection (b)(4), which makes provisions unenforceable
that penalize one party’s initiating an action that leads to the dissolution of
a marriage, does not cover such escalator clauses.
Nothing
in this provision is intended to affect the rights of parties who enter valid
covenant marriages in states that make that alternative form of marriage
available.
SECTION 9. ENFORCEMENT.
(a) In this section:
(1) “Fair and reasonable financial disclosure”
means a reasonably accurate description of the nature and value of a party’s income,
property, and liabilities.
(2) “Access
to independent legal representation” means adequate time to retain and consult an
independent lawyer before signing a premarital or marital agreement and either the
financial ability to retain the lawyer or an offer from the other party to the
agreement to pay the costs of retaining and consulting the lawyer.
(b) A premarital or marital agreement is not enforceable
if a party to the agreement who claims that the agreement is not enforceable proves
that:
(1) the party did
not execute the agreement voluntarily;
(2)
the agreement was unconscionable when it was executed;
(3) before
execution of the agreement, the party:
(A)
was not provided a fair and reasonable financial disclosure
from the other party;
(B) did
not voluntarily and expressly waive, in a separate signed record, a right to
fair and reasonable financial disclosure beyond the disclosure provided; and
(C) did
not have, or reasonably could not have had, adequate knowledge of the income,
property, or liabilities of the other party;
(4) the
party did not have access to independent legal representation and the other
party was represented by a lawyer; or
(5)
the party was not represented by a lawyer and the
agreement did not state, in plain language understandable by an adult of
ordinary intelligence, the nature of any rights or claims otherwise arising at separation,
marital dissolution, or death which were altered or waived by the agreement,
and the nature of the alteration or waiver.
(c)
A premarital or marital agreement is not enforceable to the extent that it would limit the income or property
available to a party to an amount less than that allowed for a person eligible
for need-based medical assistance or other form of public assistance in the
state where enforcement is sought.
(d) The court shall
decide a question of unconscionability as a matter of law.
[(e) A court may modify or refuse to
enforce a premarital or marital agreement to the extent that enforcement would
result in undue hardship for a party such that enforcement would be
unconscionable.]
Legislative
Note: The
bracketed subsection is appropriate for a state opting to permit a substantive
fairness review of premarital or marital agreements at the time of enforcement.
Comment
This section is adapted from Uniform
Premarital Agreement Act, Section 6.
Subsection (b)(5) is adapted from the Restatement (Third) of Property, Section
9.4(3) (2003). Subsection (c) as adapted
from N.D. Cent. Code Section 30.1-05-07.
Disclosure will qualify as “fair and
reasonable” even if a value is approximate or difficult to determine, and even
if there are minor inaccuracies.
Waiver or modification of claims relating to a spouse’s pension are
subject to the constraints of applicable state and federal law, including but
not limited to ERISA (Employee Retirement Income Security Act of 1974, 19
U.S.C. 1001 et seq.).
SECTION 10.
REVOCATION OF AGREEMENT. Unless the terms of a
premarital or marital agreement impose additional formalities, the agreement may
be revoked after marriage only in a record signed by the parties. The revocation is enforceable without
consideration. Revocation does not
include the modification of only part of a premarital or marital agreement.
Comment
“Revocation” means the abnegation of the entire instrument. Any alteration short of an entire abnegation
will be a modification, and subject to the requirements of sections 8 and 9. As indicated in section 8(14) and the comment
to section 3, it is open to the parties, by express agreement, to increase the
formalities required to revoke an agreement.
SECTION 11.
LIMITATION OF ACTIONS. A statute of limitations applicable to an action
asserting a claim for relief under a premarital or marital agreement is tolled
during the marriage of the parties to the agreement, but equitable defenses
limiting the time for enforcement, including laches and estoppels, are
available to either party.
Comment
This
Section is adapted from Uniform
Premarital Agreement Act, Section 8.
SECTION 12. UNIFORMITY
OF APPLICATION AND CONSTRUCTION. In applying
and construing this uniform act, consideration must be given to the need to
promote uniformity of the law with respect to its subject matter among states
that enact it.
SECTION 13. RELATION TO ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, and supersedes
the Electronic Signatures in Global and National Commerce Act, 15 U.S.C.
Section 7001 et seq., but does not modify, limit, or supersede Section 101(c)
of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any
of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).
SECTION 14. SAVINGS CLAUSE.
This [act] does not affect any right, obligation, or liability arising
under a premarital or marital agreement entered into before the effective date
of this [act].
[SECTION 15.
REPEALS. The
following are repealed:
(1) ........................................
(2) ........................................
(3) ........................................]
SECTION
16. EFFECTIVE DATE. This [act] takes effect . . . .