Family Law

LEG 400

Premarital Agreements

Chapter 2 - LEG400003016*200802

Week 2: October 8-14, 2007

1

Objectives
• When you complete this lesson, you will be able to:
– Explain the key requirements, considerations, and general content of premarital agreements – Describe the nature and acceptance of premarital agreements

2

Premarital Agreements
• A premarital agreement is a contract between two parties who are preparing to marry

3

Acceptance of Premarital Agreements
• Premarital agreements became more popular as the rights of women began to change

4

Threshold Considerations
• There must be an offer and an acceptance of the offer • The contract must be supported by consideration • Both parties must have the capacity to enter into a contract • The subject matter of the contract must be legal
5

The Fairness Requirement
• Disputes • Court reviews the document for evidence of unfairness
– Negotiation process
• Procedural fairness • Substantive fairness

6

Doctrine of Unconscionability
• Permits courts to question situations that are unusually harsh and unfair • Situations must involve gross overreaching by one party

7

Procedural Fairness
• Full and fair disclosure of assets and income • General rule is that both parties have fully disclosed all required information

8

Schedule of Assets
• Schedule of assets of both parties • The schedule normally includes
– – – – – – – – real estate personal property household items collections jewelry automobiles bank accounts stocks and bonds
9

Substantive Fairness
• Courts also consider the terms of the actual premarital agreement when determining if the agreement is fair • Fairness can be measured, as it existed at the time the agreement was signed by both parties

10

Interdependence of Procedural and Substantive Fairness
• When the substantive terms of an agreement are fair, court will overlook any deficiency in the procedural aspect of the agreement

11

Sections of the Premarital Agreement
• • • • • Recitals Provisions Spousal Support General Provisions and Arbitration Signatures and Verification

12

The Purpose of Premarital Agreements
• To keep finances separate in the event of a divorce or death of a spouse • Ensure that property and assets divided by the court in the event the marriage should end • Premarital agreements also serve to limit the liability of each party to avoid creditors seizing the property of one party • Premarital agreements also provide for children from a previous relationship or marriage
13

Posner v. Posner
• Premarital agreements • Structure the rights of parties in a divorce were not void as a matter of public policy

14

Simeone v. Simeone
• Court moved away from the original view that premarital agreements should be reviewed under a stricter standard than business contracts • The court treated premarital agreements as ordinary contracts

15

Universal Rule
• Enforce Premarital Agreements
– Parties must have entered into the agreements freely – Full knowledge of the other spouse’s financial circumstances

16

Uniform Premarital Agreements Act (UPAA
• • • • • • • • • Definitions Formalities Content Effect of Marriage Amendment Enforcement Enforcement Void Marriage Limitations of Actions Application and Construction

17

Content of the UPAA
• • • • The rights and obligations of each of the parties The right to buy, sell, use, transfer, etc. The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event The modification or elimination of spousal support The making of a will, trust, etc. The ownership rights in and disposition of the death benefit from a life insurance policy The choice of law governing construction
18

• • •
• •

Summary
• Premarital agreements • Acceptance of Premarital Agreements • Threshold Considerations • The Fairness requirement • Doctrine of Unconscionability • Procedural Fairness • Schedule of assets • Substantive Fairness • • Interdependence of Procedural and Substantive Fairness. • Content of Premarital agreements • Purpose of Premarital Agreements • Posner vs. Posner • Simeone vs. Simeone • Universal Rule • Uniform Premartial Act
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