Family Law Flashcards
(4 cards)
In determining the enforceability of a premarital agreement, states apply either the law of the state in which the contract was executed (here State A) or the state with the most significant relationship to the parties and the transaction. Under either test the court will likely apply the law of State A.
Some states apply the law of the state in which a premarital contract was executed in determining its enforceability. See, e.g., Hill v. Hill, 262 A.2d 661 (Del. Ch. 1970). Under this approach, the court should apply the law of State A. Others, probably more numerous, apply the law of the state with the most significant relationship to the matter at hand. See Restatement (second) of confLict of LaWs § 188. Hal and Wendy entered into a premarital agreement in State A, married there, had a child there, and lived there for all but a few months of their six-year marriage. Wendy and Child are in State A and Wendy plans to remain there. Wendy has a strong argument that State A’s law should govern because of State A’s interest in assuring that contracts executed and marriages consummated within its borders comply with its policies. On the other hand, Hal is in State B, State B was the marital home when Hal and Wendy separated, and some marital assets may be located there. Thus, State B may also have an interest in applying its law.
On these facts, it is likely, but not certain, that State A’s interests are stronger, and State A’s law will likely apply under either test.
In determining whether a premarital agreement governing property distribution at divorce is enforceable, courts consider whether the agreement was voluntarily made, whether it is substantively fair, and whether full disclosure of assets and obligations was made. The weight assigned to these factors varies from state to state, but under the UPAA, an agreement entered voluntarily and with reasonable disclosure of assets and obligations is enforceable
Although courts were once hostile to premarital agreements, today all states permit spouses to contract premaritally with respect to rights and obligations in property. In all states, the enforce-ability of a premarital agreement turns on three factors: voluntariness, fairness, and disclosure. How courts apply these factors varies significantly from one state to the next.
In many states, an agreement is unenforceable if the party against whom enforcement is sought succeeds in showing any one of involuntariness, unfairness, or lack of adequate disclosure. However, under the UPAA, which has been adopted in 25 states and State A, the party against whom enforcement is sought must prove (1) involuntariness or (2) that “the agreement was unconscionable when it was executed” and that he or she did not receive or waive “fair and rea-sonable” disclosure and “did not have, or reasonably could not have had, an adequate knowledge” of the other’s assets and obligations. UPAA § 6(a). Thus, under the UPAA, a court may not refuse to enforce a premarital agreement based on substantive unfairness unless it also finds inadequate disclosure or lack of knowledge.
Wendy is highly unlikely to succeed in establishing inadequate disclosure or lack of knowledge. Lawyer gave Wendy copies of Hal’s tax returns for the past three years and an accurate list of his assets. Under the UPAA, Wendy would thus be required to show that her execution of the agreement was involuntary in order to avoid its enforcement. In considering whether a premarital agreement was voluntarily executed, courts look to whether there was fraud, duress, or coercion. They agree that one party’s insistence on signing the agreement as a condition of the marriage does not, by itself, render the agreement involuntary, but there is no consensus on what additional facts are sufficient to establish involuntariness.
In all states, a premarital agreement regarding child support or custody is unenforceable if it is not in the best interest of the child.
The traditional rule is that a premarital agreement cannot bind a court deciding child support or custody. Although the UPAA does not explicitly bar an agreement respecting child custody, “[l]ong tradition . . . would seem to ensure . . . that courts would not consider themselves bound by custody provisions they believe injurious to the child’s interest. The law of separation agreements in every state is explicit on that point, and there is no reason why premarital agreements would be treated differently.
Profits from a song written after separation but before a final divorce decree is entered are likely to be classified as marital property subject to division at divorce.
In the majority of states, marital property continues to accrue until a final divorce decree is entered. In some states, however, marital property ceases to accrue after the date of permanent separation or the date of filing for a divorce. Wendy’s songs were written after the five-year property-distribution waiver period provided for in the premarital agreement. Thus, because no divorce petition has been filed, Wendy’s songs are probably marital property.
The fact that Wendy has not yet received profits from the songs does not change this result. Today, even contingent expectancies such as nonvested pension rights are subject to division at divorce if they were acquired through spousal effort during the marriage. Thus, profits from Wendy’s songs, even if payment has not yet been made, would be divisible at divorce if the songs were created during the marriage. Of course, a court might find that the songs were worthless or that their value was too speculative for distribution.
