POSTNUPTIAL AGREEMENTS - UW Law School

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WILLIAMS - FINAL 11/29/2007 4:07 PM 834 WISCONSIN LAW REVIEW their children from the first marriage and not to their new spouse. 20 Courts have uniformly enforced such agreements. 21 Another set of marital contracts does not contemplate either divorce or death; they merely transfer assets from one spouse to another. 22 These agreements are especially useful in community property states to transmute assets from community to separate property, or vice versa. Other marital contracts specifically contemplate divorce and its accompanying division of assets. Courts and commentators have generally divided these into three separate categories: separation agreements, reconciliation agreements, and postnuptial agreements. 23 Separation agreements are divorce settlements. Like all settlements, courts favor them and often adopt their terms into a divorce decree without further scrutiny. 24 Spouses enter into reconciliation agreements to put some period of strife behind them and begin their marriage anew. 25 All states have long recognized the validity of reconciliation agreements, at least after the spouses have separated or one of the spouses has filed a divorce complaint. 26 This Article focuses on postnuptial agreements, which occur during the marriage and before the spouses separate or file for divorce. 20. Katharine B. Silbaugh, Marriage Contracts and the Family Economy, 93 Nw. U. L. Rev. 65, 72 (1998). 21. Id. 22. Dawbarn v. Dawbarn, 625 S.E.2d 186, 188 (N.C. Ct. App. 2006) (husband transferred the deeds to three houses to his wife as a signal of his commitment to make the marriage work after his extramarital affair). 23. CARL E. SCHNEIDER & MARGARET F. BRINIG, AN INVITATION TO FAMILY LAW 404 (3d ed. 2006); see also BLACK’S LAW DICTIONARY 1206 (8th ed. 2004) (defining postnuptial agreement as an agreement made “at a time when separation or divorce is not imminent”). 24. Courts impose very few limits on these agreements. Sally Burnett Sharp, Fairness Standards and Separation Agreements: A Word of Caution on Contractual Freedom, 132 U. PA. L. REV. 1399, 1444 (1984). 25. See, e.g., Dettloff v. Dettloff, No. 03-082567-DM, 2006 WL 3755272, at *1 (Mich. Ct. App. Dec. 21, 2006) (wife filed for divorce but then agreed to waive her claim to the family home in exchange for an attempted reconciliation); Tremont v. Tremont, 35 A.D.3d 1046, 1047 (N.Y. App. Div. 2006) (wife agreed to dismiss divorce action and cosign loan in exchange for husband’s promise to sign postnuptial agreement). 26. 11 A.L.R. 283 (1921) (“A contract between husband and wife, made when the spouses are separated for legal cause, and providing for the payment of a consideration for their reunion, is, by the weight of authority, enforceable by either spouse.”); 17 C.J.S. Contracts § 236 (1963); see also In re Marriage of Barnes, 755 N.E.2d 522, 525 (Ill. App. Ct. 2001) (noting that postnuptial agreements were generally held invalid as promoting divorce unless “the parties had already separated or were on the point of separating”); Flansburg v. Flansburg, 581 N.E.2d 430, 434 (Ind. Ct. App. 1991) (noting that most courts enforce reconciliation agreements like prenuptial agreements).
WILLIAMS - FINAL 11/29/2007 4:07 PM 2007:827 Postnuptial Agreements 835 Postnuptial agreements often look a lot like prenuptial agreements. In both contexts, couples are trying to assure that their financial situation is certain and predictable. These agreements can benefit both the richer and the poorer spouse in this regard. For example, in In re Marriage of Friedman, a couple married soon after the husband was diagnosed with cancer. 27 The husband’s attorney suggested a postnuptial agreement because both spouses wanted to protect the wife from the husband’s future medical debt. 28 They amicably signed this agreement, and the court enforced it when they divorced nine years later. 29 Similarly, in Pacelli v. Pacelli, a wealthy husband sought to protect his more volatile investments from the disruption and uncertain ownership rights that would accompany divorce. 30 He requested a postnuptial agreement that would provide his wife with a substantial amount of cash but no ownership interests in his real-estate-development business. 31 This could have been a salutary contract that benefited both spouses. However, Mr. Pacelli only offered his wife a small fraction of what she would have received under New Jersey’s equitable distribution rules. 32 The court refused to enforce the agreement and imposed an ongoing requirement that all postnuptial agreements result in equitable distributions. 33 Postnuptial agreements do not always favor the wealthier spouse. In Bratton v. Bratton, a young wife requested that her husband sign a postnuptial agreement while he was in medical school. 34 She feared that he would lean on her for support during medical school and then divorce her once he had a degree and a stable practice. 35 They signed an agreement giving her fifty percent of his future salary in the event that he left her. 36 Nonetheless, the court found that the agreement lacked consideration and refused to enforce it. 37 Alternatively, many postnuptial agreements attempt to use financial rewards and penalties to create incentives during a marriage that constrain the behavior of both spouses. For example, many couples have attempted to write pre- and postnuptial agreements that contain 27. In re Marriage of Friedman, 122 Cal. Rptr. 2d 412, 414 (Cal. Ct. App. 2002). 28. Id. at 414–15. 29. Id. at 415, 418. 30. Pacelli v. Pacelli, 725 A.2d 56, 58, 60 (N.J. Super. Ct. App. Div. 1999). 31. Id. at 57–58. 32. Id. at 58. 33. Id. at 63. 34. Bratton v. Bratton, 136 S.W.3d 595, 598 (Tenn. 2004). 35. Id. 36. Id. 37. Id. at 601.
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