Family Law July 2003 Flashcards
(5 cards)
Summary
The court will probably enforce the premarital agreement’s provisions regarding property division. Ann appears to have voluntarily entered the agreement despite the fact that she lacked legal counsel. Although the absence of legal counsel would be a factor a court would consider in assessing voluntariness, the other facts suggest that the agreement was voluntarily entered into. However, the court will not enforce the premarital agreement’s provision waiving child support because parents cannot waive a child’s right to support. If the premarital agreement is upheld, then consistent with the terms, Burt cannot reach Ann’s trust fund. If the premarital agreement is invalid, in most states Burt will not be able to obtain Ann’s trust fund because it is separate property. The entire amount is separate property because the base amount was acquired before marriage and the appreciation in the fund is not the result of spousal labor.
The court in State X will probably enforce the premarital agreement, except for the provision on child support (see Point One(b)), because the agreement was voluntarily entered into.
Today in all states premarital agreements are enforceable and not void as “contemplating divorce.” However, the premarital agreement will not be enforceable against Ann if she can prove that she involuntarily entered the agreement. American Law Institute, (both case law and statutes generally require that consent to a premarital agreement be voluntary); see also Uniform Premarital Agreement Act [hereinafter UPAA]. Here no facts support duress, oppression or unfair surprise.
Application
The fact that Ann did not have a lawyer will probably not affect the court’s determination of whether Ann entered into the agreement voluntarily. Neither any state nor the UPAA mandates the assistance of independent counsel. Courts generally have not required independent counsel as a precondition to enforcing an agreement against an objecting party. Moreover, the lack of independent counsel is probably not enough to invalidate the agreement here. Ann was advised to obtain a lawyer, she had plenty of time before the marriage to do so, and her trust fund and job gave her the resources to do so.
Factors suggesting that the agreement was entered into voluntarily include the length of time between the date the premarital agreement was presented and the wedding (three months), and the fact that Ann’s background permitted her to read and understand the agreement (she had a high school education); the factual history also indicates that Ann read the agreement, that she did not express any reservations about signing it, that Burt’s lawyer told her of the agreement’s exact effect, and that she had more assets than Burt when entering the marriage. The facts, on the whole, suggest that Ann voluntarily entered into the agreement.
A premarital agreement can address property division upon divorce but cannot bind a court on matters of child support.
In virtually all states, premarital agreements can include provisions about the disposition of property upon marital dissolution. Therefore, the provisions on property division are not objectionable because of their subject matter.
However, almost all states agree that a child’s right to support cannot be adversely affected by a premarital agreement. The traditional rule is that a contract between prospective spouses cannot bind a court in deciding child support.
The fact that the child support provision is probably invalid does not preclude enforcement of the rest of the agreement. Even if the court declares one or more provisions of the premarital agreement to be unenforceable, the remaining provisions may be valid and enforceable. Typically, if an agreement contains some unenforceable terms (such as an impermissible waiver of child support), the remaining terms may be enforced if the parties intended them to be enforceable even without the unenforceable terms. (“The standard rules of contract law apply to antenuptial agreements.”). See, e.g., Rogers v. Yourshaw, 448 S.E.2d 884, 887 (Va. Ct. App. 1994). Here there is no provision specifying whether the contract is entire or severable, and in all likelihood, the court would find it is severable and uphold the rest of the agreement.
If the premarital agreement is valid, then it would independently shield the trust fund from Burt’s claim. If the premarital agreement is valid, Burt will probably not be entitled to any of Ann’s trust fund because it was separate property.
If the premarital agreement is valid (see Point One(b)), Burt waived his rights in Ann’s separate property and would not be entitled to any part of the trust fund.
Even if the agreement were not enforced, property acquired before marriage is generally considered separate property. Therefore, Ann’s trust fund of $200,000 is her separate property. Typically, separate property is not subject to division in an equitable distribution or a community property regime.
Regarding the additional $600,000 that represents the appreciation in the value of the trust fund, the general rule is that appreciation of separate property remains separate property if the appreciation is not attributable to spousal labor. ALI PRINCIPLES, supra, § 4.04 cmt. a. Since the facts state that Ann’s father solely managed the trust, the property would be considered separate. About fourteen states, however, make all property subject to division upon divorce. See Uniform Marriage and Divorce Act (UMDA) § 307, Alternative A, 9 U.L.A. (Part I) 288 (1988). But even in these states, there is little to support Burt’s contribution to the appreciation of the asset or his claim of need, the two factors primarily considered by courts in distributing property.
