D R A F T
FOR DISCUSSION ONLY
PREMARITAL AND MARITAL
AGREEMENTS ACT
_____________________________________________________
NATIONAL CONFERENCE
OF COMMISSIONERS
ON UNIFORM STATE
LAWS
_____________________________________________________
For February 10-11,
2012 Committee Meeting
With Prefatory Note
and with Comments
Copyright © 2012
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.
January 9, 2012
DRAFTING COMMITTEE ON PREMARITAL AND MARITAL
AGREEMENTS
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, 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
MICHAEL HOUGHTON, P.O. Box 1347, 1201 N. Market
St., 18th Floor, Wilmington, DE 19899,
President
GAIL HAGERTY, South
Central Judicial District, P.O. Box 1013, 514 E. Thayer Ave., Bismarck, 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
SECTION
4. CONTRACT LAW AND EQUITABLE
PRINCIPLES.
SECTION
6. FORMATION REQUIREMENTS.
SECTION
7. EFFECTIVE DATE OF AGREEMENT.
SECTION
10. LIMITATION OF ACTIONS.
SECTION
11. UNIFORMITY OF APPLICATION AND
CONSTRUCTION.
SECTION
12. RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
PREMARITAL AND MARITAL AGREEMENTS ACT
Prefatory Note
The purpose of this act is to bring clarity and
consistency across a range of agreements between spouses and those who are
about to become spouses. The focus is on agreements that purport to modify or
waive rights that would otherwise arise at the time of the dissolution of the
marriage or the death of one of the spouses.
Forty
years ago, state courts generally refused to enforce premarital agreements, on
the basis that they were attempts to alter the terms of a state status,
marriage, or because they had the effect of encouraging divorce (at least for
the party who would have to pay less in alimony or give up less in the division
of property). Over the course of the
1970s and 1980s, nearly every state changed its law to allow at least some
premarital agreements to be enforced, though the standards for regulating those
agreements varied greatly from state to state.
The Uniform Premarital Agreement Act was
promulgated in 1983. Since then it has been adopted by twenty-six
jurisdictions, with roughly half of those jurisdictions making significant
amendments to the Uniform Premarital Agreement Act, either at the time of
enactment or at a later date. See Amberlynn Curry,
Comment, “The Uniform Premarital Agreement Act and Its Variations throughout
the States,” 23 Journal of the American Academy of Matrimonial Lawyers 355
(2010). Over the years, commentators have offered a variety of
criticisms of that Act, mostly arguing that it was weighted too strongly in
favor of enforcement, and was insufficiently protective of vulnerable parties. E.g., Barbara Ann Atwood, “Ten Years
Later: Lingering Concerns About the Uniform Premarital Agreement Act,” 19 Journal
of Legislation 127 (1993); Gail Frommer Brod, “Premarital Agreements and
Gender Justice,” 9 Yale Journal of Law & Feminism 229 (1994); J.
Thomas Oldham, “With All My Worldly Goods I Thee Endow, or Maybe Not: A
Reevaluation of the Uniform Premarital Agreement Act After Three Decades,” Duke
Journal of Gender and the Law (forthcoming, 2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1753785.
Whatever its faults, the Uniform
Premarital Agreement Act has brought some consistency to the legal treatment of
premarital agreements, especially as concerns rights at dissolution of
marriage.
However, the situation regarding agreements
waiving rights at the death of the other spouse and the legal treatment of
marital agreements have been far less settled and consistent. On rights at the
death of the other spouse, the Uniform Probate Code, Section 2-213; Restatement
(Third) of Property, Section 9.4 (2003); Model Marital Property Act, Section
10 (1983); and Internal Revenue Code, Sections 401 and 417 (stating when
a surviving spouse’s waiver of rights to a qualified plan would be valid) all
seem to impose somewhat different standards and requirements. Regarding marital
agreements, some states have neither case-law nor legislation, while the
remaining states have created a wide range of approaches.
The general approach of this act is that parties
should be free, within broad limits, to choose the financial terms of their
marriage. The limits are those of due process in formation, on the one hand,
and certain minimal standards of support at the point of enforcement, on the
other. Because a significant minority of states authorize some form of fairness
review based on the parties’ circumstances at the time the agreement is to be
enforced, a bracketed provision in section 9 offers the option of refusing
enforcement based on a finding of unconscionability at the time of enforcement.
This act chooses to treat premarital agreements
and marital agreements under the same set of principles and requirements. A
number of states currently treat premarital agreements and marital agreements
under different legal standards, with higher burdens on those who wish to
enforce marital agreements. See, e.g., Sean Hannon Williams,
“Postnuptial Agreements,” 2007 Wisconsin Law Review 827, 838-845; Brian
H. Bix, “The ALI Principles and Agreements: Seeking a Balance Between Status
and Contract,” in Reconceiving the Family: Critical Reflections on the
American Law Institute=s Principles of the Law of Family Dissolution (Robin
Fretwell Wilson, ed., Cambridge: Cambridge University Press, 2006), pp.
372-391, at 382-387; Barbara A. Atwood, "Marital Contracts and the Meaning
of Marriage," 54 Arizona Law Review 1 (2012). However, this act
follows the American Law Institute, in its Principles of the Law of Family
Dissolution (2002), in treating the two types of agreements under the same
set of standards. While this act, like the American Law Institute’s Principles
before it, recognizes that different sorts of risks may predominate in the
different transaction types – risks of unfairness based on bounded rationality
and changed circumstances for premarital agreements and risks of duress and
undue influence for marital agreements (Principles of the Law of Family
Dissolution, Section 7.01, comment e), this act shares the American
Law Institute’s view that the resources available through the act and common
law principles would be sufficient to deal with the likely problems with either
type of transaction.
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 an express modification or revocation of the terms of a premarital or
marital agreement.
(2) "Custodial
responsibility" means physical or legal custody, access, visitation, or
other custodial right or duty with respect to a child.
(3) “Marital agreement” means an
agreement between spouses intending to remain married that affirms, modifies or
waives legal rights and obligations otherwise arising between them by virtue of
their marital status under applicable law during the marriage, at separation,
at marital dissolution, or at the death of one of the spouses. The term
includes an amendment of a premarital agreement or prior marital agreement. The
term does not include a separation agreement.
(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 that affirms, modifies
or waives legal rights and obligations that would otherwise arise between them by virtue of their marital status under applicable law
during the marriage, at separation, at marital dissolution, or at the death of
one of the spouses. The term includes an
amendment of a prior premarital agreement executed before the parties'
marriage.
(6) “Property” means
anything that may be the subject of ownership, whether real or personal, legal
or equitable, or any 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) “Separation
agreement” means an agreement between spouses that resolves their legal rights
and obligations for purposes of an imminent or pending marital dissolution or
separation action. The term includes a
marital settlement or divorce settlement agreement.
(10) “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.
(11) "State"
means a state of the United States, the District of Columbia, Puerto Rico, the
United States Virgin Islands, or any territory or insular possession subject to
the jurisdiction of the United States. [The term
includes a federally recognized Indian tribe or nation.]
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]. A state may vary the terminology of
"custodial responsibility" to reflect the terminology used in 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 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/.
This Act covers
marital agreements but not separation agreements, for which all states already
have fairly well established (and relatively uniform) case-law. The two types
of agreements are usually distinguished factually based on whether the couple
at the time of the agreement intend for their marriage to continue or whether
legal separation or dissolution of the marriage are planned or imminent. To
avoid deception of the other party or the court regarding intentions, some jurisdictions
will refuse to enforce a marital agreement if it is quickly followed by an
action for legal separation or dissolution of the marriage. See, e.g., Minnesota
Statutes § 519.11, subd. 1a(d)(marital agreement presumed to be
unenforceable if separation of dissolution sought within two years; in such a
case spouse seeking enforcement must prove that the agreement was fair and
equitable).
The definition of
"custodial responsibility" is adapted from the Uniform Collaborative
Law Act. The definition of "property"
comes from the Uniform Trust Code, Section 103(12).
The restriction of
“separation” to court-decreed separation was intended to avoid line-drawing
issues if mere de facto physical separations were included. This does raise
complications in jurisdictions which do not have judicially decreed legal
separations, and those jurisdictions may wish to alter this definition
according to their own practices and case-law.
(a) Except for a separation agreement valid under the law of this state other than this [act], an agreement that affirms, modifies, or waives any of the following legal rights and obligations arising between spouses because of their marital status is valid only if it is a premarital or marital agreement consistent with this [act]:
(1) spousal support;
(2) rights to property during marriage, including characterization, management, and ownership;
(3) responsibility for liabilities during marriage;
(4) rights to property and responsibility for liabilities at separation or marital dissolution;
(5) rights of a surviving spouse arising at death of a spouse; or
(6) allocation and award of attorney's fees and costs.
(b) A premarital or marital agreement may include other terms not in violation of public policy of this state, including terms relating to:
(1) rights of either or both spouses to interests in trusts, inheritance, devises, gifts, and expectancies created by third parties;
(2) appointment of fiduciary, guardian, conservator, personal representative, or agent for person or property;
(3) tax matters;
(4) methods for resolution of disputes arising under the agreement;
(5) choice of law governing validity, enforceability, interpretation, and construction of the agreement; or
(6) formalities required to amend the agreement in addition to those required by this [act].
(c) 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 restricts remedies available to a victim of domestic violence under the law of this state other than this [act];
(3) modifies the grounds for separation or marital dissolution available under the law of this state other than this [act]; or
(4) penalizes a party for initiating a legal proceeding leading to a decree of separation or marital dissolution.
(d) A term in a premarital or marital agreement that defines the rights and responsibilities of the parties regarding custodial responsibility is not binding on a tribunal.
Comment
This section is adapted from Uniform
Premarital Agreement Act, Section 3(a). Subsection (c) is adapted from the American
Law Institute, Principles of the Law of Family Dissolution, Section
7.08.
Subsection (c)(1)
applies also to step-children, to whatever extent the state imposes
child-support obligation on step-parents.
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 4, 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(b)(6) 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 2(3)) falling under the constraints of section 3(c) and (d) and section
9.
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); cf. Eason v.
Eason, 682 S.E.2d 804 (S.C. 2009) (agreement not to use adultery as defense
to alimony claim enforceable), 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 (c)(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. Additionally, 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 4. CONTRACT LAW AND EQUITABLE
PRINCIPLES. The law of contracts and principles of equity supplement this
[act], except to the extent displaced by this [act] or other
statute of this state.
Comment
This section is
similar to Section 106 of the Uniform Trust Code and Section 1-103(b) of
the Uniform Commercial Code. 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 doctrines 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. Cf. In re Marriage of Balcof,
141 Cal.App.4th 1509, 47 Cal.Rptr.3d 183 (2006) (marital agreement held
unenforceable on the basis of undue influence and duress); Bakos v. Bakos,
950 So.2d 1257 (Fla. App. 2007) (affirming trial court conclusion that
premarital agreement was voidable for undue influence).
The Committee
recognizes that the application of doctrines like duress varies greatly from
jurisdiction to jurisdiction: e.g.,
on whether duress can be shown even in the absence of an illegal act, e.g. Hall
v. Hall, No. 288241, 2010 WL 334721 (Mich. App. 2010) (refusal to set aside
settlement agreement on the basis of duress, as duress requires illegal
conduct, and none was alleged), and whether the standard of duress should be
applied differently in the context of a domestic agreement compared to a
commercial agreement. This act is not
intended to change state law and principles in these matters.
Rules of
construction, including rules of severability of provisions, are also to be
taken from state rules and principles. Cf. Rivera v. Rivera, 243 P.3d
1148 (N.M. App. 2010) (premarital agreement that improperly waived the right to
alimony and that contained no severability clause deemed invalid in its
entirety). Additionally, state rules and principles will govern the ability of
parties to include elevated formalities for the revocation or amendment of
their agreements.
SECTION
5. GOVERNING LAW. The validity,
enforceability, interpretation, and construction of a premarital or marital
agreement are determined by:
(1)
the law of the jurisdiction designated in the agreement if that jurisdiction
has a significant relationship to the agreement or either of the parties, and
the designated law is not contrary to a strong public policy of the forum
state; or
(2)
in the absence of a controlling designation in the
agreement, the law of the forum including the choice of law rules of the forum
state.
Comment
This section is
taken from the Uniform Trusts Act, Section 107. It is consistent with Uniform
Premarital Agreement Act, Section 3(a)(7), but is
broader in scope. 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, and they mean something
more than that the forum law differs from the law of the other jurisdiction. See, e.g., International Hotels Corporation v. Golden,
15 N.Y.2d 9, 14, 254 N.Y.S.2d 527, 530, 203 N.E.2d 210, 212-13 (1964); Russell
J. Weintraub, Commentary on the Conflict of Laws 118-125 (6th ed.,
Foundation Press, 2010).
The Committee is
aware that in with sales of goods, the Uniform Commercial Code has chosen to
restrict choice of law provisions to states with reasonable relation to the
transaction (this was Section 1-105 under the old UCC; and Section 1-301 in the
Revised UCC Article 1). The Committee
has concluded that the concerns that led the state legislatures and the UCC
Commissioners to prefer a narrower choice of law option for sales of goods
would not be present for premarital and marital agreements.
For examples of
choice of law and conflict of law principles operating in this area, see, e.g.,
Bradley v. Bradley, 164 P.3d 567 (Wyo. 2007) (premarital agreement had
choice of law provision selecting Minnesota law; amendment to agreement held
invalid because it did not comply with Minnesota law for modifying agreements);
Gamache v. Smurro, 904 A.2d 91 (Vt. 2006) (applying California law to
prenuptial agreement signed in California); Black v. Powers, 628 S.E.2d
546 (Va. App. 2006) (Virginia couple drafted agreement in Virginia, but signed
it during short stay in the Virgin Islands prior to their wedding there; agreement
will be covered by Virgin Islands law, unless there is a clear party intention
that Virginia law apply or if Virgin Island law is contrary to the this forum
state’s public policy); cf. Davis v. Miller, 7 P.3d 1223 (Kan. 2000)
(authorizing parties to use choice of law provision to choose the state version
of the Uniform Premarital Agreement Act to apply to a marital agreement, even
though that Act would otherwise not apply).
Attorneys choosing
choice of law provisions for their clients should do so cautiously and only
after detailed research. Attorneys who
select the law of another state to govern their clients' agreements, ignorant
of how that other state's law actually works against their clients interests,
risk malpractice liability.
SECTION 6. FORMATION REQUIREMENTS. A
premarital or marital agreement must be in a record and signed by both parties.
The agreement 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 7. 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 8. VOID MARRIAGE. If
a marriage is determined to be void, a premarital or marital agreement is
unenforceable except 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.
(a) In this section:
(1) “Access to
independent legal representation” means:
(A) reasonable time to decide
whether to retain an independent lawyer before signing a premarital or marital
agreement;
(B) if a party decides to retain a lawyer, reasonable
time to locate an independent lawyer, obtain legal advice, and consider the
advice provided; and
(C)
if the other party is represented by a lawyer, either
the financial ability to retain a lawyer or the receipt of an offer from the
other party to pay the reasonable costs of retaining and consulting the lawyer.
(2)
“Fair and reasonable financial disclosure” means a reasonably accurate
description
of the nature and value of a party’s property and liabilities and the amount
and sources of a party’s income at the time the agreement is signed.
(b) A premarital [or marital] agreement is unenforceable
against a party if that party proves that any of the requirements of subsection
(c) is not satisfied. [A marital agreement is unenforceable unless the party
seeking to enforce the agreement proves that all of the requirements of
subsection (c) are satisfied.]
(c)
A premarital or marital agreement is unenforceable against a party unless:
(1)
the party executed the agreement voluntarily and without
duress;
(2)
the party had access to independent legal
representation;
[(3)
the agreement stated in language understandable by an adult of ordinary
intelligence the general nature of any rights or obligations otherwise arising
at separation, marital dissolution, or death which were altered or waived by
the agreement, and the nature of the alteration or waiver, unless the party was
a lawyer or was represented by a lawyer at the time the agreement was
negotiated and signed;] and
(4)
before signing the agreement, the party:
(A)
was provided a fair and reasonable financial
disclosure from the other
party;
(B)
voluntarily and expressly waived, in a separate signed
record, a right to fair and reasonable financial disclosure beyond the
disclosure provided; or
(C)
had, or reasonably could have had, adequate knowledge
of the property, liabilities, and income of the other party.
(d) A premarital or marital agreement is unenforceable to
the extent that it would limit the income or property available to a party at
the time of enforcement 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.
(e)
A court may modify or refuse to enforce a premarital or marital agreement to
the extent that the agreement was unconscionable at the time of signing. The court shall decide a question of
unconscionability as a matter of law.
[(f)
A court may modify or refuse to enforce a premarital or marital agreement to
the extent that enforcement would result in [undue hardship] [substantial
injustice] for a party because of circumstances arising since the time of
signing.]
Legislative Note: A state opting to permit a substantive fairness review of
premarital or marital agreements at the time of enforcement should enact
subsection (f).
Comment
This section is
adapted from Uniform Premarital Agreement Act, Section 6.
Under subsection (a)(2)
and (c)(4), disclosure will qualify as “fair and reasonable” even if a value is
approximate or difficult to determine, and even if there are minor
inaccuracies.
Subsection (b)(4) is adapted from the Restatement (Third) of Property,
Section 9.4(3) (2003), and it is also similar in language and purpose to California
Family Code §1615(c)(3). In that section, reference to “plain language
understandable by an adult of ordinary intelligence” includes a requirement
that the explanation be written in a language in which the party in question
understands.
Subsection (d) as adapted from N.D. Cent. Code, Section 30.1-05-07. While a few
states have comparable rules, either by statute or case-law for premarital
agreements and for rights at divorce, e.g., Newman v. Newman, 653
P.2d 728, 736 (Colo. 1982), this act expands coverage of the restriction by
having it apply more generally, including marital agreements and rights at the
death of the other spouse.
The
requirement of "access to independent counsel" represents the Committee's
considered view that representation by independent counsel is crucial for a
party waiving important legal rights.
The act stops short of requiring representation, see California
Family Code § 1612(c) (restrictions on spousal support allowed only if the
party waiving rights consulted with independent counsel); California Probate Code § 143(a) (waiver of rights at death of
other spouse unenforceable unless the party waiving was represented by
independent counsel); cf. Ware v. Ware, 687 S.E.2d 382 (W. Va.
2009) (access to independent counsel required, and presumption of
validity for premarital agreement available only where party challenging
the agreement consulted with independent counsel).
The requirement
of reasonable disclosure pertains only to assets of which the party knows or
reasonably should know. There will be
occasions where the valuation of an asset can only be approximate, or may be
entirely unknown, and this can and should be noted as part of a reasonable
disclosure.
The use of the
phrase "voluntary and without duress" is not meant to change the
law. The Committee is aware of the
(quite divergent) law that arose under the "voluntariness" standard
of the Uniform Premarital Agreement Act – e.g., compare Marriage
of Bernard, 204 P.3d 90 (Wash. 2009) (finding agreement
"involuntary" when significantly revised version of premarital
agreement was presented three days before wedding) with Brown v.
Brown, No. 2050748 (Ala. App. 2007) (agreement presented agreement day
before wedding; court held assent to be "voluntary"), aff'd,
No. 1071057 (Ala. 2009); see generally Judith T. Younger, "Lovers' Contracts in the Courts: Forsaking the Minimal
Decencies," 13 William & Mary Journal of Women and the Law 349,
359-400 (2007) (summarizing the divergent interpretations of
"voluntary" and related concepts under the UPAA); Oldham, "With
All My Worldly Goods," supra (same). This [act] is not intended either to endorse
or override any of those decisions. The
Committee does emphasize that the presence of domestic violence will be of
obvious relevance to any conclusion about whether the standard of "voluntary
and without duress" has been met.
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.). See, e.g., Robins v. Geisel, 666
F.Supp.2d 463 (D. N.J. 2009) (wife’s premarital agreement waiving her right to
any of her husband’s separate property did not qualify as a waiver of her
spousal rights as beneficiary under ERISA); Strong v. Dubin, 901
N.Y.S.2d 214 (App. Div. 2010) (waiver in premarital agreement conforms with
ERISA waiver requirement and is enforceable).
There is a
long-standing consensus that premarital agreements cannot bind a court on
matters relating to children – cannot determine custody or visitation, and
cannot limit the amount of child support (though a few courts have allowed
agreements to help justify an increase
of child support). E.g., In re Marriage of Best, 901 N.E.2d 967, 970-971 (Ill. App. 2009). The basic point is that parents and
prospective parents do not have the power to waive the rights of third parties
(their current or future children), and do not have the power to remove the
jurisdiction or duty of the courts to protect the best interests of minor
children.
Many jurisdictions
impose greater scrutiny or higher procedural safeguards for marital agreements
as compared to premarital agreements. See, e.g., Ansin
v. Craven-Ansin, 929 N.E.2d 955 (Mass. 2010); Bedrick v. Bedrick, 17
A.3d 17 (Conn. 2011). Those
jurisdictions view agreements in the midst of marriage as being especially at
risk of coercion (the analogue of “hold up” in a commercial arrangement) or
overreaching. Additionally, these
conclusions are sometimes based on the view that parties already married are in
a fiduciary relationship in a way that parties about to marry, and considering
a premarital agreement, are not. Many other
jurisdictions and The American Law Institute (in its Principles of the Law of Family Dissolution) treat marital
agreements under the same standards as premarital agreements. This is the approach adopted by this
act.
Some jurisdictions
require that parties seeking to enforce waivers of rights at the death of the
other spouse have the burden of proving that procedural and substantive
requirements were met. See, e.g., In re Estate of Cassidy, __ S.W.3d ___, No. SD 30025,
2011 WL 5566415 (Mo. App.). This
act does not follow that practice, but views that vulnerable parties will be
comparably protected by the terms of the act, even though the burden of proof
remains with the party opposing enforcement.
Bracketed subsection
(f) reflects the standard applied in a number of states, in which agreements
are enforceable only if they are shown to meet basic standards of fairness at
the time of enforcement. E.g., Connecticut
Code § 46b-36g(2) (premarital agreements); New
Jersey Statutes § 37:2-38(b) (premarital agreements); North Dakota Code
§ 14-03.1-07 (premarital agreements); Ansin
v. Craven-Ansin, 929 N.E.2d 955, 963-64 (Mass. 2010) (marital agreements); Bedrick v. Bedrick, 17 A.3d 17, 27 (Conn. 2011) (marital agreements).
SECTION 10. 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 estoppel, are available to either party.
Comment
This Section is adapted from Uniform Premarital Agreement Act, Section 8. As the Comment to that Section stated: "In order to avoid the potentially disruptive effect of compelling litigation between the spouses in order to escape the running of an applicable statute of limitations, Section 8 tolls any applicable statute during the marriage of the parties (contrast Dykema v. Dykema, 412 N.E. 2d 13 (Ill. App. 1980) (statute of limitations not tolled where fraud not adequately pleaded, hence premarital agreement enforced at death)). However, a party is not completely free to sit on his or her rights because the section does preserve certain equitable defenses."
SECTION 11. 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 12. 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 13. 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 14. REPEALS. The
following are repealed:
(1) [Uniform Premarital Agreement Act]
(2) [Uniform Probate Code § 2-213( )&
( ) (Waiver of Right to Elect and of Other Rights)]
(3)
.......................................
(4) ........................................
(5) ........................................]