Postnuptial agreements can provide future financial security
Suppose that a young married couple, both of whom have good jobs, decide to start a family. They reach a decision that one of them will leave a well-paid job in order to be a stay-at-home parent following the arrival of the newborn. At this point in their lives, neither spouse anticipates becoming divorced. However, as pointed out by NBC News, studies suggest that only about one-half of first marriages last 20 years. If a marriage ends in divorce, the economic consequences for the spouse who decided to become a stay-at-home parent could be enormous.
An article in Forbes Magazine suggests that a person who is contemplating becoming a stay-at-home parent might wish to discuss with his or her spouse the possibility of entering into a postnuptial agreement. Giving consideration to a postnuptial agreement will, by necessity, compel the couple to discuss-probably for the first time-the financial implications if a divorce were to occur. It may be possible for the couple to reach a binding agreement on their financial futures without leaving matters such as property division, alimony and child support up to the courts.
The author of the Forbes article stated that postnuptial agreements are an “excellent way to supersede your state’s marriage and divorce laws.” Massachusetts is an equitable division state meaning that the division of property is to be undertaken on an equitable basis. This is not the same thing as saying that marital property is to be divided equally. There are certainly well-accepted principles to help the courts determine how property should be divided. However, in the final analysis, a court will ultimately end up making financial decisions for the divorcing parties if they cannot reach an agreement themselves. Not everyone who has undergone a divorce has necessarily felt that a court reached the “right” decision as to a division of marital property. One of the benefits of postnuptial agreements is that they allow the parties to take firm control over their own destinies.
Postnups in Massachusetts
In its 2010 decision in Ansin v. Craven, the Supreme Judicial Court of Massachusetts finally made it clear that postnuptial agreements are enforceable in this Commonwealth. However, the court warned that there should be careful scrutiny of such agreements by the courts. The court enumerated the key factors for determining whether a postnuptial agreement is enforceable:
- There cannot have been any fraud or coercion leading to the agreement.
- All assets must be fully disclosed by the parties prior to signing.
- Each spouse needs to knowingly and expressly waive, in writing, the right to a judicial equitable division of assets.
- The terms of the agreement must be fair and reasonable at the time entered into.
The court did not require that each spouse be represented by separate counsel. Importantly, however, the court stated that “reliance on the advice of experienced, independent legal counsel, however, will go a long way toward ensuring the enforceability of an agreement.”
Preparing a postnup agreement
Depending upon your situation, a postnuptial agreement might be a good idea in order to bring certainty to your future financial situation should a divorce occur. If the marriage has produced children, a postnuptial agreement could obviously benefit the children financially as well. An attorney skilled in handling family law matters can sit down and walk you through the steps of achieving a fair postnuptial agreement. Furthermore, the attorney can draft the agreement for you in a manner incorporating the financial plans to which you and your spouse have agreed.