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Joanna L. Grossman

The Enforceability of Postnuptial Agreements: Massachusetts Weighs In, Part Two in a Two-Part Series of Columns on Postnuptial Agreements


Tuesday, August 3, 2010

In a recent case, Ansin v. Craven-Ansin, the Supreme Judicial Court (SJC) of Massachusetts -- the state's highest court -- upheld a postnuptial agreement. Its decision established for the first time (in that state) the validity of such agreements and the criteria under which they must be evaluated. In Part One of this two-part series of columns, I explained the ruling in Ansin. In this part, Part Two, I will consider the general landscape -- both historical and contemporary -- of spousal agreements.

As I will explain, when compared with the historical approach to spousal agreements, the decision in Ansin seems quite revolutionary. But when compared, instead, with contemporary rulings and statutes in other states, Ansin marks Massachusetts as a relative latecomer to the game of postnuptial agreements.

The Common-Law Rules on Spousal Agreements

In early American law, contracts between husband and wife were generally unenforceable. Depending on the particular period in history, different legal obstacles produced this same result.

To begin, until the middle of the Nineteenth Century, a married woman was deprived of the ability to enter into any legally binding contract -- whether with her husband or any third party -- under the principles of coverture, which deemed that a wife's legal identity was "covered up" (or suspended) by her husband's legal identity, during their marriage.

States gradually restored to married women their legal identity through the Married Women's Property Acts, which were passed in a series of waves, over the course of almost a century. These acts meant that married women could own property and generally make binding contracts, among other rights. But even after coverture had become a distant memory, many states still insisted that husbands and wives could not enter into enforceable contracts with one another.

One theory to support this limitation was the fiction of "marital unity" -- the idea that the husband and wife were essentially one person. They could not, therefore, contract with one another. Another theory behind the rule was simply a vague public-policy objection to spousal contracts, rooted in the concern that suits over breach or enforcement of the contracts would sow marital discord. Regardless of the theory they invoked, however, the bottom line was that courts routinely held that agreements between spouses could not be enforced.

In a well-known family-law case, Graham v. Graham, decided in 1940, a court in Michigan refused to enforce an agreement under which a wife had promised to pay her husband $300 per month to quit work and follow her in "her travels." Although Michigan had by then granted married women the equal rights of contract, the court held that this particular contract was invalid because the parties were married to each other. The enforcement of such an agreement, the Michigan court reasoned, might invite courts into the private realm of a marriage, destroy the flexibility needed to make a marriage work, and invite controversy between husband and wife.

More modern cases have sometimes taken the same view of spousal agreements. Even an appellate ruling in California issued as recently as 1998, Borelli v. Brusseau, refused to enforce a contract under which an extremely ill husband had promised his wife a sum of money if she agreed to care for him at home, personally, rather than place him in a nursing home. One of the reasons for the court's refusing to enforce the agreement was that the court saw "such negotiations" as "antithetical to the institution of marriage".

Modern Marriage: The Different Types of Spousal Agreements

Over time, courts and legislatures have gradually warmed to the idea of contracts between husbands and wives -- or soon-to-be-husbands and wives. Depending on the timing of such agreements, however, the rules that apply sometimes vary.

Premarital agreements -- those that are executed in anticipation of marriage -- were traditionally unenforceable. Although coverture and marital unity did not afflict these agreements, since the parties were not yet married, courts were still reluctant to enforce such agreements, because they purported to alter the incidents of marriage that the state had fixed. Courts reasoned that it was up to the state -- not the couple -- to decide when alimony should be awarded, and whether or not property should be shared upon divorce. They also seemed to plan for divorce, which, before no-fault, was not something they were entitled to count on. Finally, courts also worried that two people on the brink of marriage—and presumably in love—could not negotiate fairly with one another.

Yet, as I have written in a previous column, the tide shifted in the 1980s. Prenuptial agreements are now generally enforceable, as long as they are not (1) involuntary or (2) unconscionable and made without adequate financial disclosure. This shift is consistent with a more individualized view of marriage—and thus, of divorce and its consequences.

Separation agreements -- those executed in anticipation of divorce -- were also traditionally frowned upon. In addition to the problems of coverture and marital unity, separation agreements were also thought to encourage or hasten divorce. If a rich spouse could reduce the financial consequences of divorce, he might be more inclined to pursue one (or allow one to happen). And, like premarital agreements, separation agreements were thought to usurp the state's power to determine the rights and obligations of spouses upon divorce.

But here, too, the tide shifted, even earlier. By the 1950s and 1960s, courts had relaxed prohibitions on separation agreements, and had agreed to enforce them as long as they were substantively fair. In later decades, many courts moved even further away from the traditional rule, by enforcing separation agreements as long as they were not unconscionable -- a much harder thing to prove. As many as fifty percent of divorcing couples today enter into a separation agreement that predetermines at least the economic consequences of divorce, if not also other matters like child custody and support.

What about postnuptial, or marital, agreements -- those that anticipate a continuation of marriage, but also fix the incidents (such as the financial consequences) of any future divorce? Although the conventional wisdom is that these agreements are generally not enforceable, many states have quietly begun to recognize and enforce them -- as the highest court in Massachusetts just did in Ansin.

The Enforceability of Postnuptial Agreements: A New Era

As the court in Ansin noted, most recent court rulings on the enforceability of postnuptial agreements have been favorable (that is, pro-enforcement). Moreover, several states have enacted statutes specifically granting spouses the right to enter into postnuptial agreements. These court rulings and statutes vary in terms of the formality required of postnuptial agreements and their permissible scope, as well as with respect to other restrictions. By and large, however, states have begun to recognize, as the Ansin court observed, that "a marital relationship need not vitiate contractual rights between the parties." But many of these rulings also recognize that marital agreements might necessitate a special type of scrutiny -- certainly, more scrutiny than an ordinary commercial contract would merit, but maybe even more scrutiny than premarital or separation agreements would merit.

The American Law Institute (ALI)'s Principles of the Law of Family Dissolution also support the enforcement of postnuptial agreements on essentially the same terms as prenuptial agreements. Ansin disagreed with this approach, and concluded that postnuptial agreements deserve more probing scrutiny than premarital ones, because the potential cost of not signing -- the loss of an ongoing marriage -- is so much greater. Still, for both types of contract, the ALI suggests rules that are slightly less pro-enforcement than those that are followed in many states today. Like the court in Ansin, the ALI imposes the burden of proof on the party seeking enforcement, rather than the party trying to avoid the agreement. Also as in Ansin, the ALI requires that both parties have the opportunity to seek the advice of independent counsel, whether or not they actually take advantage of that opportunity.

Even in the modern era, contractual rights between spouses are not unlimited. The Supreme Court of Iowa, for example, ruled in a 2009 case, In re Marriage of Cooper, that a "reconciliation agreement" that purported to set the terms of the couple's marriage was invalid. The parties had entered into an agreement after the wife discovered that her husband was having an affair. He wanted the marriage to continue, and was thus willing to make promises (in writing) about his future behavior.

If the Iowa case had involved "a reconciliation agreement where the parties let go of the acrimonious past, agreed to continue their marriage, and chose to structure their financial relationship in the event of a future divorce with full disclosure and the assistance of independent counsel," then the agreement would have been enforceable -- or, at least, the Iowa court suggested as much. But, instead, the Iowa couple's contract purported to impose a condition precedent regarding the "sexual conduct of the parties within the marital relationship." Citing an 1889 case that refused to enforce a similar agreement, the Iowa court saw "no reason to depart" from old precedents now. The court thus refused to allow the relationship between spouses to be "regulated by contracts that are plead and proved in the courts as if the matter involved the timely delivery of a crate of oranges."

But despite cases like Cooper, most courts agree that an agreement made during a marriage to fix the financial consequences of any future divorce can be enforceable provided they survive whatever special scrutiny the caselaw or statute calls for.

The Trend Is Now Toward Permitting More Individualized Marital Unions

There is no question that the law on spousal agreements -- before, during, and at the end of marriage -- has evolved dramatically. Across the board, states have let go of their traditional hostilities to such agreements and many of the doctrines that supported that tradition.

Ansin strikes a modern compromise by allowing spouses to enter into mid-marriage contracts, but also applying to such contracts the careful scrutiny they deserve in light of the potentially fraught and coercive context in which they are made. As has happened with respect to so many other doctrines, states have loosened their grip on marriage and made way for more individualized unions.

Joanna Grossman, a FindLaw columnist, is a professor of law and John DeWitt Gregory Research Scholar at Hofstra University. She is the coeditor of Gender Equality: Dimensions of Women's Equal Citizenship (Cambridge University Press 2009), an interdisciplinary collection that explores the gaps between formal commitments to gender equality and the reality of women's lives. Her columns on family law, trusts and estates, and discrimination, including sex discrimination and sexual harassment, may be found in the archive of her columns on this site.

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