With a waiver of alimony, a promise to exclude inheritance proceeds, or a pledge to leave the marital home – an intended postnuptial agreement could be as flexible and varied as the complex circumstances of the marriage itself. However, unlike their premarital cousins (agreements executed before marriage are governed both Connecticut General Statutes Section 46b-36b et seq. and controlling precedent), postnuptial agreements had not been officially recognized by the Connecticut Supreme Court and the prospects of their enforceability at trial was nebulous at best.
A Relevant Court Case
In the decision of Bedrick v. Bedrick (SC 18568, 200 Conn. 691, decided April 26, 2011), the Connecticut Supreme Court has for the first time set forth parameters to test the enforceability of postnuptial agreements, noting that “we must now consider what standards govern their enforcement. Neither the legislature nor this court has addressed this question.” Bedrick, at 699.
Addressing first the question of whether postnuptial agreements are contrary to public policy, the Supreme Court concluded in the negative. While historically, the Court had determined that prenuptial agreements (as an example) were generally held to violate public policy if they promoted, facilitated, or provided an incentive for separation or divorce” (citing McHugh v. McHugh, 181 Conn. 482, 488-89 (1980)), it has been more recently decided that “private settlement of the financial affairs of estranged marital partners is a goal that courts should support rather than undermine” (see Billington v. Billington, 220 Conn. 212, 221 (1991)).
The Bedrick court now opined that “postnuptial agreements may also encourage the private resolution of family issues. In particular, they may allow couples to eliminate a source of emotional turmoil – usually, financial uncertainty – and focus instead on resolving other aspects of the marriage that may be problematic.” Bedrick, at 698.
Marriage Contracts
In this case of first impression, the Supreme Court expressly acknowledged the heightened scrutiny that must be applied to a trial judge’s review of a contract between already married persons, noting that “spouses do not contract under the same conditions as either prospective spouses or spouses who have determined to dissolve their marriage.” In its analysis, the Court points out that already married spouses are “less cautious” in a contractual relationship with one another than they would be as prospective spouses, and similarly, are “certainly less cautious” with one another than they would be with an ordinary contracting party. “With lessened caution comes greater potential for one spouse to take advantage of the other.” Id, at 703.
As such, the law now requires trial courts to enforce a postnuptial agreement only if it complies with applicable contract principles (including the element of consideration, or in layman’s terms, the “give and take” in any contractual arrangement), and if the terms of the agreement are both fair and equitable at the time of execution and if those terms are not unconscionable at the time of dissolution of the marriage.
Fair and Equitable Agreement
To determine whether terms are “fair and equitable” at the time of execution, a court will look to whether the agreement was made voluntarily, without any undue influence, fraud, coercion, or duress. In addition, as with prenuptial agreements, there must be a factual finding that each spouse was given full, fair, and reasonable disclosure of all property, assets, financial obligations, and income of the other spouse when entering into the contract.
Importantly also, the Court further held that “unfairness or inequity alone does not render a postnuptial agreement unconscionable; spouses may agree on an unequal distribution of assets at dissolution.” Id, at 706. Trial courts are charged with applying a “totality of the circumstances” approach to determining the fairness and equity of enforcing a postnuptial agreement.
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