Prenuptial Agreements Overview
A premarital agreement may also be called an antenuptial
agreement. The terms are synonymous. Prenuptial or antenuptial agreements refer
to a contract between two persons planning to marry which governs the rights and
liabilities of the parties if they should happen to get divorced or in the event
one spouse dies. In short, aprenuptial agreement determines the rights of
parties to property responsibility for debt and may even determine whether
spousal maintenance (alimony) is paid.
Why Prenuptial Agreements are Prudent
A premarital agreement acts as a safeguard for both you
and your spouse-to-be. It protects your assets and may prevent expensive and
acrimonious litigation if a divorce should occur by defining the rights and
responsibilities of the parties in advance. With today's divorce rate hovering
around 50%,a prenuptial agreement may be one of the most prudent decisions in
your life. This is particularly true for business owners who may wish to
preserve what they have worked so hard to build.
Minnesota Law
Prenuptial agreements governing property settlements upon
dissolution are valid in Minnesota. Englundv. Englund, 286 Minn.
227, 230, 175 N.W.2d 461, 463 (1970); Hillv. Hill, 356 N.W.2d 49,
53 (Minn.Ct.App.1984), pet. for rev.denied, (Feb. 19, 1985). The current
requirements for a valid antenuptial agreement are contained in Minn.Stat. §
519.11 (1984). Antenuptial agreements are enforceable if they are procedurally
and substantively fair. McKee-Johnsonv. Johnson, 444 N.W.2d 259, 265
(Minn.1989). An antenuptial agreement is procedurally fair if :
- there is a full and fair disclosure of the earnings
and property of each party, and
- the parties have had an opportunity to consult with
legal counsel of their own choice. Minn.Stat.§ 519.11, subd. 1 (1998).
The agreement must also be:
- in writing;
- executed in the presence of two
witnesses; and
- acknowledged by the parties before a person
authorized to administer an oath. Minn.Stat.§ 519.11, subd. 2 (1998).
In most cases prenuptial agreements are upheld. It is only
in cases where there was not full disclosure or the agreement becomes
substantively unfair at the time of the divorce that Court's strike down the
validity of such agreements. An agreement may deemed substantively unfair if the
circumstances on which the agreement was based have changed so drastically that
enforcement would not comport with the reasonable expectations of the parties at
inception.
Prenuptial Agreements & Spousal Maintenance
Courts most often find antenuptial agreements
substantively unfair with regard to provisions seeking to limit or eliminate
spousal maintenance (alimony)payments. Minnesota Courts have ruled that there is
sound public policy rationale for not strictly enforcing such a provisions
which, even though entered into in good faith and reasonable at the time of
execution, may have become unreasonable or unconscionable as to its application
to the spouse upon divorce. The Courts are essentially attempting to prevent ex
spouses from becoming wards of the state. If one spouse's health and
employability have greatly deteriorated during a marriage, Courts may be
reluctant to enforce the maintenance provisions of an antenuptial agreement.
Some cases that have been decided:
Invalidated an antenuptial agreement which sought to
preclude spousal maintenance where the lesser earning spouse contracted a
venereal disease from he husband resulting in medical expenses;
Invalidating an antenuptial agreement which sought to
preclude spousal maintenance where the marriage was long term (more than 20
years) and the wife had been out of the work force for some time and
suffered from an emotional disability. The trial court concluded that
unforeseen circumstances invalidated the antenuptial agreement by rendering
it unconscionable.
