Many people associate the word “prenup” with celebrities or the rich and famous, and it’s possible that the only time a person has heard anything about prenuptial agreements is in music or the movies. The truth is that anyone planning to get married can – and maybe should – have a prenuptial agreement. That said, most people are not familiar with what a prenuptial agreement is, why they might need or want one, or whether they are a good candidate for one. Alternatively, a person might be newly engaged and presented with the concept that their spouse, or their spouse’s family, expects that they will sign a prenuptial agreement prior to the wedding.
In Massachusetts, the law provides that two people may make a written contract, a prenuptial or antenuptial agreement, prior to marriage that designates all or part of their property to remain or become their individual property. Massachusetts General Laws, Chapter 209, Section 25.
What is a Prenuptial Agreement?
Although many have heard the term, this discussion often starts with – what exactly is a prenup? A prenuptial agreement is a contract between two people planning to be married. The contract must be signed prior to your wedding.[1] Prenuptial agreements typically include terms surrounding property division, spousal support or alimony, and the allocation of debt. Prenuptial agreements characterize property and ownership rights as separate or marital and designate what each party’s rights are to a particular property in the event of a divorce. For support or alimony, the parties are free, within the parameters of the law as discussed below, to come to an agreement about whether and how alimony will be paid, including waivers or reservations of alimony rights.
It is crucial to understand that under Massachusetts law, a spouse is entitled to particular property rights in the event of divorce and that a prenuptial agreement often provides for different terms to apply in lieu of the rights provided by law. Massachusetts General Laws Chapters 207, 208, 209, and 209A, Chapter 215, Section 6 or Chapter 208, Section 34, and Sections 48-55. Said another way, it is important to recognize that prenuptial agreements generally require that the parties waive their rights to receive property as provided by law, instead agreeing to the terms as written in the prenuptial agreement. In a divorce matter, the Courts are permitted to divide all property of the parties, whenever and however acquired. Rice v. Rice, 372 Mass. 398, 400 (1977). When issuing orders and/or judgments relative to property division and support, the Court assesses myriad factors, providing for great judicial discretion. A prenuptial agreement allows the parties to take control of these issues and outcomes.
Although prenuptial agreements allow parties to delineate rights to property outside of what they may otherwise be entitled to by statute, prenuptial agreements should not include terms relating to child custody or support, which issues remain within the jurisdiction of the Courts.
In the Event of a Divorce, How is a Prenuptial Agreement Enforced?
Although the statute permits prenuptial agreements, in order for those agreements to be valid and therefore enforceable at the time of divorce, certain requirements must be met to comply with the case law established in Massachusetts.
In order for a prenuptial agreement to be valid, it must be in writing, it must have been entered into freely and voluntarily, and must be fair and reasonable – both at the time it was executed and at the time a party is seeking to enforce it. Osborne v. Osborne, 384 Mass. 591, 599 (1981), DeMatteo v. DeMatteo, 436 Mass. 18, 34-35 (2002). To make this determination at the time a party is seeking to enforce the agreement (i.e. at the time of divorce), the Courts are required to utilize the agreement under a “two-look” or “second look” test. Id.
In giving the agreement a “first look” to determine whether the agreement was fair and reasonable at the time it was signed, the Courts examine factors relating to the negotiation and execution of the agreement. Osborne at 599-600. These factors include whether a full and fair financial disclosure was made by both parties as to their assets, incomes, and liabilities, as well as circumstances such as whether the parties had the advice of counsel and entered into the agreement knowingly, or whether the agreement was signed under duress. Id. See also DeMatteo at 26, Rosenberg v. Lipnick, 377 Mass. 666, 672 (1979).
The Courts then give the agreement a “second look.” For this analysis, the Courts look to whether the agreement is “conscionable” at the time two parties are getting divorced. DeMatteo at 35-36, 38. The Courts will evaluate whether enforcement of the agreement would leave one spouse unable to support himself or herself. Id at 37. See also Austin v. Austin, 445 Mass 601, 604-606 (2004). Specifically, the Courts will consider the parties’ present circumstances and explore what property rights each party would retain upon divorce and/or what their rights are regarding support/alimony. Massachusetts General Laws Chapters 207, 208, 209, and 209A, Chapter 215, Section 6 or Chapter 208, Section 34, and Sections 48-55. If the Court determines that the agreement strips a spouse of substantially all marital rights and interests, it would be contrary to public policy and therefore unenforceable. DeMatteo at 37.
Should I Need or Want to Have a Prenuptial Agreement?
Ultimately, that is the choice of you and your spouse-to-be. That said, there are considerations that may lend to a party wanting a prenuptial agreement in place prior to entering a marriage. For example,
- If one or both parties have a multitude of premarital assets, such as real estate, banking or investment accounts, or business interests;
- If one or both parties have or expect to have disparate incomes and earning capacities;
- If one or both parties have family wealth, or expect significant inheritances and/or gifts;
- If one or both parties want to protect their individual income and assets and establish terms ahead in the event of divorce litigation in the future; and/or
- If one or both parties have considerable debts or liabilities.
Moreover, prenuptial agreements may be beneficial in general because they provide an opportunity and avenue for open disclosure and discussion of assets and financial circumstances between a couple planning to intertwine their lives into the future. Transparency in this regard is part of what makes a strong marital foundation, and oftentimes many couples do not think, or do not feel comfortable, having these conversations at all prior to the wedding and only to learn or be informed about such circumstances after the marriage has already taken place.
If you are considering a prenuptial agreement, or if you have been asked to execute a prenuptial agreement, the first step is to consult an attorney to help guide you through the decisions and process.
[1] Postnuptial agreements (i.e. contracts entered into after a couple has been married), while also a possibility of an enforceable agreement between spouses, are a distinct topic not discussed here. See: Ansin v. Craven-Ansin, 457 Mass. 283 (2010).
Alyssa M. Kelly is a family law attorney at the Boston-based law firm Conn Kavanaugh Rosenthal Peisch & Ford, LLP. She can be reached at akelly@connkavanaugh.com
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