In all states in the United States, and the District of Columbia, a prenuptial agreement is presumptively enforceable. That is not true all over the world. England and Wales come to mind as jurisdictions where the prenup is not presumptively enforceable. Japan and China recognize the prenup. Italy and Canada recognize premarital agreements but may not call them “prenups.” Each jurisdiction has its own laws and quirks. This post is limited to those jurisdictions where a couple is free to enter into a prenuptial, ante nuptial or post-nuptial agreement, and the jurisdiction in which they live will recognize this agreement, absent any irregularities that would render the agreement void.
The question is, which is better to have? A prenupt? Or a post-nup?
A prenuptial or ante nuptial agreement is a written contract between two people that is entered into prior to marriage. Usually, this refers to a man and a woman, although there is some indication that domestic partners can similarly enter into a prenup in some states, and that such an agreement is enforceable. The agreement can pertain to issues such as equitable distribution, choice of laws, alimony, community property, religion, name, and anything that is not void by law. The agreement cannot, however, make a divorce a condition for obtaining a lump sum payment or any other clause that would be deemed a restraint on marriage. The prenup generally cannot contain provisions about custody of children since that is usually the province of the court to say what is in the best interest of the child.
Even though one of the conditions of the prenup is full or fair disclosure, there is really no absolute requirement that there is “full” disclosure in a prenup. That can be waived. Meaning, the party against whom enforcement is sought can argue that the other party waived full disclosure and the agreement may stand. The burden is on the party seeking enforcement to show that full disclosure was not waived. Also, a prenup is not enforceable unless a marriage actually takes place. The marriage itself is the consideration for the prenup. A prenup is enforceable, as a general rule if:
- The agreement is in writing (oral prenups are always prohibited);
- The agreement is executed voluntarily;
- There is full and/or fair disclosure at the time of execution;
- The agreement cannot be unconscionable;
- The agreement is executed by both parties (not their attorneys) “in the manner required for a deed to be recorded”, known as an acknowledgment, before a notary public.
The great thing about the properly executed prenup is that it will be very difficult for one party to void it just because he or she changes his or her mind about the terms once a divorce ensues. This is especially true when there are witnesses-even if there hasn’t been full disclosure. That is because, prior to marriage, there is no fiduciary duty imposed on parties. Indeed, once married, there is a marital fiduciary duty similar to the one imposed on partners that absolutely requires full disclosure of all assets. The requirement of full disclosure after marriage cannot be waived the way it can be waived prior to marriage. This is where the prenup trumps the post nup. Because there is no fiduciary duty between people who are just engaged to be married, so parties can get away with more. Let’s contrast it with the post nup.
The Post Nup
Contrary to the prenup, a post nup happens after a legal marriage has occurred. A post-nup can happen involuntarily. For example, if the parties had a prenup whose terms are changed in any way after marriage, they effectively turn a prenup into a post nup. The thing with a post nup that is so dangerous is that once married, a fiduciary duty exists and is recognized in most jurisdictions – especially states like California. THERE MUST BE FULL DISCLOSURE of all assets in order for it to be a valid post-nup and the element of unconscionability is even more scrutinized. If there isn’t full disclosure, the validity of the post-nup is highly controvertible. Full disclosure post-matrimony cannot be waived as it can be pre-matrimony. Of course, the other requirements also hold through for the post-nup. It cannot be so one-sided as to be unconscionable. It must be properly witnessed and executed. It has to be in writing and there must be consideration.
The Uniform Premarital Agreement Act
There are currently 27 states in the U.S. that have adopted the Uniform Premarital Agreement Act. Those states are: Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Texas, Utah, Virginia, and Wisconsin). You will notice that New York is not a state that has adopted the act. What are the relevant provisions of the Act?
Interestingly, the UPMAA does not govern post-nups or domestic partnerships and the marriage is not sufficient consideration for the post-nup as it is with the prenup.
Section 2 also restates what appears to be the almost universal rule regarding the marriage as consideration for a premarital agreement (see, e.g., Ga. Code § 20-303; Barnhill v. Barnhill, 386 So. 2d 749 (Ala. Civ. App. 1980); Estate of Gillilan v. Estate of Gillilan, 406 N.E. 2d 981 (Ind. App. 1980); Friedlander v. Friedlander, 494 P.2d 208 (Wash. 1972); but cf. Wilson v. Wilson, 170 A. 2d 679, 685 (Me. 1961)). The primary importance of this rule has been to provide a degree of mutuality of benefits to support the enforceability of a premarital agreement. A marriage is a prerequisite for the effectiveness of a premarital agreement under this act (see Section 4). This requires that there be a ceremonial marriage. Even if this marriage is subsequently determined to have been void, Section 7 may provide limits of enforceability of an agreement entered into in contemplation of that marriage. Consideration as such is not required and the standards for enforceability are established by Sections 6 and 7. Nevertheless, this provision is retained here as a desirable, if not essential, restatement of the law. On the other hand, the fact that marriage is deemed to be consideration for the purpose of this act does not change the rules applicable in other areas of law (see, e.g., 26 U.S.C.A. § 2043 (release of certain marital rights not treated as consideration for federal estate tax), 2512; Merrill v. Fahs, 324 U.S. 308, rehearing denied 324 U.S. 888 (release of marital rights in premarital agreement not adequate and full consideration for purposes of federal gift tax). [Uniform Premarital Agreement Act]
So which is better? The prenup or the postnup? All things held equal, it depends. If you are the person seeking to enforce the agreement, then the prenup is better. It is presumptively enforceable. If you are the person seeking to set aside the agreement, then the post nup is a better bet. Chances are there is something you can argue as to why it is invalid: lack of consideration, duress, failure to fully disclose per the marital fiduciary duty, outright fraud, unconscionability.