In recent years, it has become more and more common for married couples to consider a postnuptial agreement in Massachusetts. A postnuptial agreement (also known as a Marital Agreement and commonly referred to as a "postnup") is meant to create a clear understanding of management and control of finances and assets to create a more harmonious marriage. However, the spouses cannot create an "postnup" as part of “divorce planning or in the anticipation of divorce. This is incredibly important to understand, as doing so could invalidate a postnuptial agreement and render it unenforceable.
A contract between spouses has always been a complex topic, and although previously unenforceable, postnuptial agreements are now enforceable in many states, including Massachusetts.
In the case Ansin v. Craven-Ansin, the Supreme Judicial Court of MA, ruled that an agreement made between husband and wife, whose purpose was to determine the financial consequences of any future divorce that was not contemplated at that time being, was indeed enforceable and did not violate any public policy.
Read more about Postnups in our Postnuptial Agreement Q&A session with Attorney Mavrides, here
The Validity of a Postnuptial Agreement in MA
Ultimately, the SJC of Massachusetts held that postnuptial agreements could be enforced, as long as certain requirements were met. The consensus is usually that in modern times, a married couple does not lose the right to enter into a contract with one another merely because they are married. In Ansin, the Court determined specific criteria for the enforcement of postnuptial agreements, and stated that they must be "carefully scrutinized."
So, what are those criteria?
Here are the 5 factors that a Massachusetts court will consider, per Ansin:
- Whether each party had the opportunity for independent counsel;
- Whether there was fraud or coercion in obtaining consent to the agreement;
- Whether all assets were fully disclosed prior to the execution of the agreement;
- Whether each spouse knowingly waived his or her rights to property-sharing (equitable division of assets) and to support in the event of a divorce; and
- Whether the terms of the agreement were fair and reasonable at the time of the execution and are fair and reasonable at the time of a request to enforce this agreement at the time of divorce.
As with contracts, postnuptial agreements are not enforceable if tainted by fraud or coercion, and it is the burden of the spouse trying to enforce the of the postnuptial agreement to prove there was no fraud or coercion.
Now, take a moment and consider the 5th factor, that states:
"Whether the terms of the agreement were fair and reasonable at the time of the execution and are fair and reasonable at the time of divorce."
What does that really mean? What constitutes fair and reasonable? In order to better understand how a judge may evaluate the enforceability of a postnuptial agreement, you must remember that the judge will try and determine whether the agreement was fair and reasonable at the time of execution and fair and reasonable at the time of divorce, using these factors as a guide:
The Agreement was Fair and Reasonable at the Time of Execution
This means that a judge may consider the magnitude of the disparity between the outcome under the agreement and the outcome under otherwise prevailing legal principles. The judge may consider:
- Whether the purpose of the agreement was to benefit or protect the interests of third parties, such as the children from a prior relationship. The judge may also consider the impact of the agreement’s enforcement upon the children of the parties;
- The length of marriage;
- The motives of each spouse, and their respective bargaining positions at the time the agreement was drafted;
- The circumstances giving rise to the marital agreement the degree of the pressure, if any, experienced by one spouse;
- Were the parties both represented by counsel throughout the negotiations; and
- Other circumstances the judge finds relevant
The Agreement was Fair and Reasonable at the Time of Divorce
A judge may consider, among other factors:
- The nature and substance of the objecting party’s complaint;
- The financial and property division provisions of the agreement as a whole;
- The context in which the negotiations took place;
- The complexity of the issues involved;
- The background and knowledge of the parties;
- The experience and ability of counsel; and
- The mandatory and, if the judge deems it appropriate, the discretionary factors set forth by the statute for alimony or division of assets.
In summary, a postnuptial agreement can be a useful tool for couples who would like to create a more clear understanding of management and control of their finances and assets. If you are considering a postnuptial agreement in Massachusetts, call Mavrides Law at 617.723.9900, or email us at info@MavridesLaw.com.
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