On the issue of valuation, the appellate court noted that, while there was evidence of the market value of the entire Martha’s Vineyard property, there was no evidence as to the husband’s 25% interest – simply valuing it at 25% of market value was without basis.

Further, since the Court acknowledged that the husband’s interest was unlikely to be sold and unlikely to generate income for him, ordering the husband to make a present payment to his wife for $360,000 is “plainly wrong and excessive.”  While the law strongly favors present payments to “if, as, and when” payments, the law also recognizes that where a present division would cause an undue hardship to a party, it is inappropriate.  Elliott v. Elliott, 2011 Mass.App.Unpub. LEXIS 992 (September 6, 2011)

Some couples are inclined to do it; these couples should absolutely consider divorce mediation. Divorce mediation in Massachusetts, for example, is making extraordinary progress, because it’s beneficial for spouses who can agree what they want from the divorce. Mediated divorce is a voluntary process run by an impartial third party, called a Neutral. Both parties have a divorce attorney, but the divorce is handled out of court.

Litigation, on the other hand, is beneficial for couples who don’t know what they want from their divorce, who are dealing with complex issues that they can’t agree on, or who are extremely angry with each other. There are exceptions and divorcing couples who fall between the two (very simplified) categories.

No matter whether you choose traditional divorce litigation or divorce mediation, it is important that your children aren’t considered “business assets” that can be divided. Handling your family’s complex problems logically is an excellent idea, but not all business models are sound.

In re Anderson, Colo. Ct. App. No. 09CA2592 (December 23, 2010)

Simkin v. Blank, N.Y. App.Div. No 3016101501/09 (January 4, 2011)

Ross v. Ross, 2011 Mass. Unpub. LEXIS 434 (April 6, 2011)

One of the common factors between many of the older couples getting divorced is that one of the spouses needs long term care and nursing home stays.  Medicare, the government insurance program for people over 65, does not cover such long term care options.  Medicaid, the Government program for low-income individuals does cover such programs; however, it can’t be used until a person exhausts all his resources.  When one of the spouses gets sick, many married couples have to decrease most of their assets to qualify for Medicaid, leaving little money for the healthy spouse.  If the couple divorces, the healthy spouse may be able to preserve many of her assets.  Elder Law attorneys suspect that this proposition is the main reason why the amount of older couples divorcing has sharply risen.

In addition to money leading to elder divorce, Barbara Waxman, an executive and life coach in San Francisco, states that “many people, especially women, emerge from busy child bearing years with time to re-evaluate their lives and their partners, and decide that they want a relationship that works.”  Mediated divorces are usually the perfect choice for these older couples because there is usually no hostility in the split, and often the split is actually commenced to help the other spouse preserve their assets.

The desire to preserve assets for the healthy spouse is still the greatest cause of divorce in aging couples.  There is another way to preserve assets, however, and that’s to carry out proper estate planning.  An experienced estate planning attorney can help couples properly plan for the costs and decisions involved in a long term care situation and can reduce the need for divorce as the only means to preserve assets.  Estate planning is essential in order to properly plan for illness and aging so that the best option is not divorce or reducing the couples assets so they can qualify for Medicaid.

http://www.bostondivorceandmediationlawyers.com/2011/02/how-will-dont-ask-dont-tell-repeal-deal-with-massachusetts-same-sex-marriage/;

http://www.estateplanninginmassachusetts.com/2011/02/same-sex-couple%E2%80%99s-guide-to-estate-planning/

One night in 2006, while Mr. Wolcott was ill and in a “weakened state,” Mrs. Wolcott plied her usually-abstinent husband with alcohol, causing him to fall off a boat. Mr. Wolcott had to swim a mile to shore and walk for several hours before he got help.  The fall caused him severe injuries – a broken nose, upper jaw and wrist, four broken teeth, and a “blown-out knee.” Then, when he returned home, Mrs. Wolcott forced her injured husband to sleep on the couch because his “breathing” bothered her.  Shortly afterwards, while he was still recovering, Mrs. Wolcott asked him to move out of the house.

Mrs. Wolcott’s next action suggests that, even though her husband was now out of the house, she was still bothered by his breathing.  In fact, she proceeded to solicit his murder, telling a cousin she wanted Mr. Wolcott to “disappear” and asking him if he knew anyone in the Mafia.  Luckily for Mr. Wolcott, the cousin demurred.  The husband was spared the bullet.

Mrs. Wolcott’s lesser offenses – an adulterous “sexual affair,” a “foolhardy landscaping plan,” and $24,000 worth of unnecessary plastic surgery.

Not surprisingly, the judge wasn’t enamored with the sociopathic Mrs. Wolcott and awarded her only 10% of the marital estate.  She appealed and the Appeals Court affirmed the decision.  Wolcott v. Wolcott, 2011 Mass.App LEXIS 16 (January 6, 2011).

According to the New York Times article Religious Divorce Dispute Leads to Secular Protest, Aharon Friedman, a 34-year-old tax counsel for the Republicans on the House Ways and Means Committee refuses to give a get to his ex-wife Tamar Epstein.  The two were civilly divorced by a Maryland court in April and the husband has been upset with the court-ordered parenting schedule. Ms. Epstein claims that he is withholding consent in order to renegotiate the schedule.

Mr. Friedman’s obstinacy has sparked angry protests outside his home that have been spearheaded by the Organization for the Resolution of Agunot (ORA) — an agunah advocacy group. He’s also been condemned by the local Jewish press. A recent editorial in a D.C.-area Jewish paper, headlined “Unchain this Woman,” implored Friedman to be a “mensch” and give his ex-wife the divorce.

Ms. Epstein’s problem may have been preventable, however.  An observant Jewish couple should sign a prenuptial agreement requiring the husband to provide a get in the event of a civil divorce.  An observant married couple might consider a postnuptial agreement, now explicitly permitted in Massachusetts provided certain requirements are met.  In either event, each spouse or prospective spouse needs to retain separate lawyers before signing any such agreement.  This is not a do-it-yourself project.

Although canned agreements are available online, most would not be enforceable in Massachusetts.

I. Early History

At common law, post-marital contracts between prospective spouses were legally impossible because, under the “doctrine of marital unity,” the husband and wife would become one upon marriage – and “the one [was] the husband.”[1] In the mid nineteenth century, American legislatures began enacting Married Women’s Property Acts.  In 1845, Massachusetts, as part of that trend, enacted the statute that would eventually be codified at MGL c.209 §25.

II.  MGL c.209 §25. Antenuptial settlements; force and effect:

At any time before marriage, the parties may make a written contract providing that, after the marriage is solemnized, the whole or any designated part of the real or personal property or any right of action, of which either party may be seized or possessed at the time of the marriage, shall remain or become the property of the husband or wife, according to the terms of the contract. Such contract may limit to the husband or wife an estate in fee or for life in the whole or any part of the property, and may designate any other lawful limitations. All such limitations shall take effect at the time of the marriage in like manner as if they had been contained in a deed conveying the property limited.

III. “Death Prenuptials:” Prenuptial Agreements Affecting Rights of Parties Upon Death:

The statute, MGL c.209 §25, was construed to authorize, among other premarital contracts, those that fixed the obligations of married persons in the event that a marriage terminated by the death of a party.  In fact, such agreements dated to sixteenth century England and were enough ingrained in the popular culture to have been referenced in the plays of William Shakespeare.[2]

In Massachusetts, two nineteenth century cases exemplify the judicial acceptance of what I will call “death prenuptials.”  Jenkins v. Holt, 109 Mass. 261 (1872); Freeland v. Freeland, 128 Mass. 509 (1880). The statute, MGL c.209 §25, was not construed to authorize premarital contracts that purported to fix a party’s obligations in the event that a marriage terminated by divorce – what I will call “divorce prenuptials.”  These, in contrast with “death prenuptials,” were generally per se unenforceable at common law.   “Divorce prenuptials” were said to be in derogation of the public policy in favor of marital stability as well as the legal duty of the husband to support his wife and were unenforceable in Massachusetts until 1981 when the Supreme Judicial Court sanctified them in Osborne v. Osborne, discussed infra.

Before we reach Osborne, however, it is useful to analyze how some of the earlier cases viewed the enforcement of prenuptial agreements and, following Osborne, it is useful to review the principal cases chronologically to the present.  Since the cases build on each other, and the tests for enforcement evolve, this analysis is intended to serve not only the historically curious but also the practitioner who must confront these issues on a regular basis.

IV. The Requirement of Fraud and the Prenuptial as a Business Contract: Wellington v. Rugg [3]

In this case, the future Mr. Charles and Mary Wellington, entered into a prenuptial agreement in which Mary waived all rights to claim against the estate of Charles in the event that their marriage was terminated by death.    Charles did not disclose his assets in the “death prenuptial” agreement.  Upon Charles’s death, Mary sued to invalidate the agreement.  The Court held that his failure to disclose assets was insufficient to invalidate the agreement. Mere silence on the part of the defendant is all that is charged. But failure to disclose known facts does not amount to fraud, and is not the basis of an action for deceit, unless the parties stand in such relation to one another that one is under legal or equitable obligation to communicate the facts to the other.

Wellington held that Charles had no affirmative obligation to disclose his assets.  The burden, instead, was on Mary to make such inquiry.  There the law stood in until 1979 when Massachusetts became the last state in the country to abandon the principles underlying the Wellington case.[4]

V. Alimony Waivers and the Duty of Support: French v. McAnarney [5]

In this case, the engaged couple entered into a prenuptial agreement in which the wife-to-be released all rights she would have “by reason of  the marriage.”  Id. at 545.  The husband, a lawyer, was subsequently adjudicated “an insane person” and placed under a guardianship.

The wife, still married to him, sought an order of support from her by suit against his legal guardian who interposed the prenuptial agreement as a defense.  At issue in the case was whether the agreement relieved the husband of his statutory duty of support to his wife.

The SJC found that the husband was not so relieved. According to the French court, “[t]he status of the parties as husband and wife was fixed when the marriage was solemnized . . . The moment the marriage relation comes into existence, certain rights and duties necessarily incident to that relation spring into being” – the duty of support being one of them.  Such obligations cannot be avoided or “relaxed by previous agreement of the parties.”  Id. at 546.

VI. Confidential Relationships and  the Rule of Fair Disclosure: Rosenberg  v. Lipnick [6]

Perry Rosenberg and the future Charlotte Rosenberg had been courting for eighteen months, when Perry asked Charlotte to marry him.  Perry told her that he wanted her to sign a prenuptial agreement in which she waived her rights to a statutory share in his estate in exchange for the sum of $5,000 to be paid from his estate upon his death.

This “death prenuptial” contained no recitation of Perry’s assets and, although Charlotte’s lawyer encouraged her to press for this information, she did not do so.  Indeed, at the time of the execution of the agreement, Charlotte had no knowledge of Perry’s resources.

The Probate Court upheld the agreement on the basis that Perry Rosenberg’s simple failure to disclose assets was not actionable fraud and, therefore, under Wellington v. Rugg, it was insufficient to invalidate the prenuptial agreement.

The Supreme Judicial Court agreed with Charlotte’s argument that the principles of Wellington should be abandoned and set forth new rules “that shall apply to antenuptial agreements executed after the publication date of this opinion.”  Id. at 668.  Declining to apply these rules retroactively, the Supreme Judicial Court upheld the prenuptial agreement against Charlotte Rosenberg and affirmed the trial court’s judgment pursuant to Wellington v. Rugg.

As Charlotte Rosenberg lost her case, it was probably no small comfort to her that she helped to alter significantly the legal landscape of prenuptial agreements in Massachusetts. While we have, in fairness, followed the Wellington case in the instant matter, we think that to the extent that Wellington negates any duty of disclosure, we should abandon that precedent in favor of the more enlightened rules of other jurisdictions. Thus, in future cases involving agreements drawn after the publication date of this opinion, we shall feel free to hold that the parties by definition occupy a confidential relationship and that the burden of disclosure rests on both of them.[7]

Importantly, the Rosenberg disclosure rules rest on the notion that the parties to a prenuptial agreement do not stand at arm’s length from one another in the same way, for example, as two parties to a business contract do.  Rather, prospective spouses stand in a “confidential relationship” with one another.  This, Rosenberg explains, is “a relationship of mutual trust and confidence” that requires the exercise of “the highest degree of good faith, candor, and sincerity in all matters bearing on the proposed agreement.”  Id. at 670-71. In addition to the burden of disclosure, the Court stated:

In judging the validity of such an antenuptial agreement, other relevant factors which we may consider are whether (1) it contains a fair and reasonable provision as measured at the time of its execution for the party contesting the agreement; (2) the contesting party was fully informed of the other party’s worth prior to the agreement’s execution, or had, or should have had, independent knowledge of the other party’s worth; and (3) a waiver by the contesting party is set forth. It is clear that the reasonableness of any monetary provision in an antenuptial contract cannot ultimately be judged in isolation.  Rather, reference may appropriately be made to such factors as the parties’ respective worth, the parties’ respective ages, the parties’ respective intelligence, literacy, and business acumen, and prior family ties or commitments. [8]

Rosenberg further noted that the reasonableness of any monetary provision in the agreement cannot be “judged in isolation.”  Accordingly, the Court elaborated, “reference may appropriately be made to such factors as the parties respective worth, the parties’ respective ages, the parties’ respective intelligence, literacy, and business acumen, and prior family ties or commitments.”[9]

Finally, practitioners must bear in mind the obvious fact that the prenuptial agreement is, after all, a contract; accordingly, such agreement must “comport with the rules governing the formation of all contracts, for example, the necessity of consideration and the absence of fraud, misrepresentation and duress.”  Id. at 673.  See also DeMatteo v. DeMatteo, 436 Mass. 18, 26 (foot. 16) (2002).

VII. Birth of the Divorce Prenuptial and The Second Look: Osborne v. Osborne[10]

David Osborne and Barbara Mallinckrodt married in 1967.   Prior to the marriage, they executed a prenuptial agreement in which each party waived rights to alimony or to any portion of the estate of the other in the event of divorce and death.

Barbara was an exceedingly wealthy heiress to an enormous family fortune.  David, on the other hand, had virtually no assets, although he was a medical student and presumed to have significant earning capacity.  Barbara attached a detailed and accurate schedule of assets to the agreement.  Barbara had an attorney and David did not.  David, in fact, saw the agreement for the first time a few hours before the wedding but the parties had some discussions concerning the general subject matter of the prenuptial agreement prior to the wedding.

At issue, in this case of first impression, was whether a “divorce prenuptial” was enforceable.  Following the judicial trend in the United States at the time that favored the enforcement of “divorce prenuptials,” Osborne upheld the agreement, finding them not to be “per se against public policy.”  Id. at 598. The freedom of parties to enter into prenuptial agreements is not, however, “appropriately left unrestricted,” the Osborne court points out. At the outset, the validity of such agreements should be judged by the same “fair disclosure” rules set forth by this court in Rosenberg v. Lipnick, 377 Mass. 666 (1979). Consistent with our holding in Rosenberg, those rules should be applied prospectively from the date of our decision in that case.  In addition, antenuptial agreements that settle the alimony and property rights of the parties in the event of a divorce should be binding on the courts to the same extent as postnuptial separation agreements. Osborne then added a “second look” requirement onto the Rosenberg analysis to apply in the cases of future “divorce prenuptials.”[11] The agreement, according to Osborne:

must be fair and reasonable at the time of entry of the judgment nisi, and it may be modified by the courts in certain situations, for example, where it is determined that one spouse is or will become a public charge, or where a provision affecting the right of custody of a minor child is not in the best interests of the child.  See generally Knox v. Remick, 371 Mass. 433 (1976). See also Restatement (Second) of Contracts § 191 (1981).[12]

Notably, Osborne articulated that its decision expressed “no opinion on the validity of antenuptial contracts that purport to limit the duty of each spouse to support the other during the marriage.” Id.  This left open the question as to whether temporary alimony or counsel fee awards (considered to be in the nature of support) could be properly waived in a prenuptial agreement. David also sought to set aside the agreement on the theory that he entered into it under duress.

The Supreme Judicial Court was not persuaded to disturb the master’s finding to the contrary on the grounds that such report was not “clearly erroneous.”  Id. at 601.   Although David did not have an attorney and, in fact, saw the agreement for the first time a few hours before the wedding when Barbara’s attorney presented it to him, the Court was impressed that the parties had some discussions concerning the general subject matter of the prenuptial agreement prior to the wedding.[13]

It is useful to note that, although the Court was not persuaded by David’s claim in this case, contract claims are always available to contest a prenuptial agreement.  See discussion regarding Rosenberg, supra.

VIII. Cohabitation Agreements, Unmarried Cohabitants and the Rule of Contract Law: Wilcox v. Trautz[14]

Although this article concerns prenuptial agreements, it is worthwhile to make a brief comment about cohabitation agreements, that is, agreements between unmarried partners “concerning property, financial and other matters relevant to their relationship.”   Id. at 332.

The practitioner should be mindful that while agreements between unmarried cohabitants are generally enforceable, they are subject to the rules of contract law “and a court is no more entitled to inquire into its fairness and reasonableness than it is in respect to contracts generally.”  Id. at 334.

Such agreements will not be enforced “to the extent that sexual services constitute the only, or dominant, consideration for the agreement, or that enforcement should be denied on some other public policy ground” such as, for example, whether enforcement of the agreement would cause one of the parties to become a public charge or whether the agreement contravenes the best interest of a child.  Id. at 332.

While the Wilcox Court does not use the term, it is clear that unmarried cohabitants do not have the “confidential relationship” that married partners do and, therefore, are not endowed with the same protections. Cohabitation contracts between same sex couples stand on the same footing as such contracts between heterosexual couples.[15]

IX. “Conscionability” and the “Essentially Stripped” Contesting Spouse: DeMatteo v. DeMatteo[16]

Before Joseph DeMatteo and Susan DeMatteo, married in March 1990, Joseph insisted that Susan sign a prenuptial agreement.  Joseph’s net worth was between $108,000,000 and $133,000,000.  Susan had less than $5,000 in the bank and a car.  Joseph and Susan were represented by counsel in negotiations over the prenuptial agreement.

During the course of the negotiations, the parties, through counsel, exchanged offers and counteroffers.  Additionally, the parties themselves had discussed the terms of a prenuptial agreement for about six months prior to the marriage.  Susan did not discuss with her counsel what she might anticipate in terms of an appropriate financial settlement in the absence of a prenuptial agreement in the event of a divorce.  Susan was aware of the criteria considered by Court under c.208 §34 but “there was no real explanation of its application to her case.”

The agreement provided that Susan would receive the marital home free of encumbrance, $35,000 a year in alimony with a COLA (measured from date of marriage to initiation of divorce), automobile and medical insurance.  Jointly acquired property would be divided equally.

The Probate Court judge found the provisions in the agreement to be “less than modest, given Husband’s financial holdings.”   Id. at 38. The Probate Court judge rejected the agreement, relying on the “fair and reasonable” test set forth in Dominick v. Dominick, [17] a “decision concerning the enforceability of a separation agreement.”  Id. at 24. The judge believed that Dominick permitted her to consider the factors under c.208 §34 and, pointing to “the length of the marriage, station, amount and source of income, employability, estate, and the needs of each party and the opportunity of each for future acquisition of assets and income,” held the agreement to be unenforceable.[18]

On direct appellate review, the Supreme Judicial Court agreed with the Probate Court Judge’s characterization of the agreement as “less than modest,” but also pointed out that the “wife was fully apprised of the husband’s holdings before she agreed to these ‘less than modest’ arrangements.”

The SJC reversed – and upheld the agreement. The SJC set forth that a judge must determine, under Rosenberg , that the “fair disclosure” rules are satisfied.  That is, a judge must determine whether an agreement:

(1)… contains a fair and reasonable provision as measured at the time of its execution for the party contesting the agreement;

(2) the contesting party was fully informed of the other party’s worth prior to the agreement’s execution, or had, or should have had, independent knowledge of the other party’s worth; and

(3)  a waiver by the contesting party is set forth.

The second two prongs of Rosenberg, (2) and (3) above, were easily satisfied for the SJC.  The court had no problem, of course, finding that a waiver, number (3) above, was set forth. As to the second prong, number (2) above, it credited the lower court finding that there was “complete financial disclosure” by both parties.

Importantly, the DeMatteo court also elaborated on the disclosure requirement, stating that disclosure must be such that it enables a party to make a reasonable decision as to whether the agreement should go forward.  This informed consent, DeMatteo instructs, does not require fair disclosure to be “synonymous with detailed disclosure,” but “contemplates that each spouse should be given information, of a general and approximate nature, concerning the net worth of the other.”  Id. at 27 [citation omitted]. In gauging the informed consent of the contesting party, and testing whether the waivers were meaningful, DeMatteo also informs that courts should consider such other factors as:

. . . whether each party was represented by independent counsel, the adequacy of the time to review the agreement, the parties’ understanding of the terms of the agreement and their effect, and a party’s understanding of his or her rights in the absence of an agreement.[19]

The Court noted, in this regard, that Susan’s counsel sent a letter to her which stated that “when you sign a premarital contract, you give up the opportunity of having the Court make an independent assignment of marital property, and accept the terms of the contract instead.”  Id. at 29 (foot. 21).

Susan’s counsel also sent her a letter in which she enclosed a copy of M.G.L. c.208 §34, instructing her to read it carefully in order to “evaluate properly the terms of the Pre-Marital Agreement that we are negotiating.”  Id. at 29 (foot. 23), although, as the Probate Court found, “there was no real explanation of its application to her case.” As to the first prong of Rosenberg, the “first look,” number (1) above, an agreement must contain a “fair and reasonable provision” for the contesting party measured at the time of execution.

To meet this, a prenuptial agreement does not have to approximate what a court would order under c.208 §34 or because it is one-sided – otherwise, DeMatteo points out, the right of a party to enter into a prenuptial agreement would be “meaningless.”  Id. at 31. DeMatteo continued to elaborate on Rosenberg’s “fair and reasonable” requirement:

It is only where the contesting party is essentially stripped of substantially all marital interests that a judge may determine that an antenuptial agreement is not ‘fair and reasonable’ and therefore not valid . . . Where there is no evidence that either party engaged in fraud, failed to disclose assets fully and fairly, or in some other way took unfair advantage of the confidential and emotional relationship of the other when the agreement was executed, an agreement will be valid unless its terms essentially vitiate the very status of marriage.[20]

The SJC is at pains to clarify that this test is not a standard of “unconscionability” but, in fact, an elaboration of Rosenberg’s “fair and reasonable” requirement. The Court found the agreement in DeMatteo to be “fair and reasonable” upon its execution.  The wife, according to DeMatteo, was not “essentially stripped of all marital assets” because she received the marital home free of encumbrance, $35,000 a year in alimony with a COLA (measured from date of marriage to initiation of divorce), automobile and medical insurance.

In fact, the Court noted, Mrs. DeMatteo was more financially secure now than she was before she entered the marriage.  Id. at 34. Since the agreement in this case survived the “first look,” the Court must undertake a “second look” analysis.  If an agreement does not survive a “first look,” the inquiry ends.

Under the “second look” analysis, the Court must consider whether there is “any reason not to enforce” the agreement.   Id. at 34.  An agreement will be enforceable unless, due to circumstances occurring during the course of the marriage, enforcement would leave the contesting spouse “without sufficient property, maintenance, or appropriate employment to support herself.”  Id. at 37.

Put another way, a Court must perform a “second look” analysis in order to ensure that the agreement has “the same vitality at the time of divorce that the parties intended at time of execution.”  Id. at 38. The Court also points out the need for a change in the nomenclature regarding Osborne’s “second look” test.   The problem is that the “second look” moniker can imply a de novo like standard of review when in fact the standard of review is considerably narrower.

The DeMatteo court informs us that the more accurate term to describe the standard of review of a prenuptial agreement at the time of enforceability is “conscionability.”   Id. In the instant case, the Court was impressed that there was no evidence of any significant change of circumstances during the marriage on Susan’s part, such as, for example, a debilitating illness or the erosion of the value of  promised support by inflation.

The Probate Judge improperly considered “three post-marriage factors” such as the parties lifestyle during the marriage, the “vast disparity between the parties’ ability to acquire future assets and income,” and “the fact that this is a ten year marriage which produced two children.”  Id. None of these factors, emphasized the DeMatteo court, was “sufficient to render the agreement unenforceable.”

“Maintenance and support,” under DeMatteo, appear to stand on a different footing than property division although there was precious little elaboration from the court on this score. [W]e will not enforce an antenuptial agreement that prevents a spouse from retaining her marital rights, of which maintenance and support, however disproportionately small, are the most critical. A

lthough DeMatteo did not elaborate, this principle does help to explain why the SJC upheld the right of the Probate Judge to make an award of counsel fees to the wife despite the clear prohibition in the prenuptial agreement.  Counsel fees awards are in the nature of support obligations.[21] Finally, DeMatteo, consistent with Rosenberg, confirms that an agreement must also comport with rules of contract formation such as absence of fraud, misrepresentation and duress.  Id. at 26 (foot. 16).

X.  Alimony Waivers: Austin v. Austin[22]

At time of their marriage in 1989, the future Donna Austin, a high school graduate, worked as a secretary earning a $25,000 salary while Craig Austin was a wealthy businessman.  Craig had insisted that Donna sign a prenuptial agreement as a condition of marriage.  Craig had $1,000,000 in assets and Donna had $35,000 in assets.  Both parties had legal counsel but Donna’s counsel prepared the draft that was executed.  Two days prior to marriage, the parties executed a prenuptial agreement.

The agreement provided for mutual waivers of alimony.  It also provided that each would keep his/her own separate property and any appreciation thereto.  All other property was deemed marital property and “subject to division” under the laws of a court of competent jurisdiction.

Further, “any appreciation on the last marital home at the time of separation would be deemed a marital asset, subject to division.”  The agreement also provided that, if the Husband owned such marital home solely, Wife would have to vacate it but “the husband was required to assist the wife in relocating and to give the wife support” based upon certain principles cognizable under domestic relations law such as:

the length of the marriage, their present employment, whether any children were born to the marriage and such other factors as are cognizable under domestic relations laws….

The parties had one child in 1991, and the wife stayed home as a full time mother, although she occasionally helped out working at the family restaurant.  At the time of the divorce, the couples jointly owned the marital home.

The Probate Court judge, in a bifurcated trial, first heard evidence as to the enforceability of the prenuptial agreement. The judge found that the parties made informed, voluntary decisions to sign the agreement, that they represented their net worth to the best of their abilities, and that the wife was ‘under neither duress nor coercion when she signed the agreement.’

He also found that the wife was fully advised of her rights when she executed the agreement and that the wife, having been divorced previously, was fully aware of her rights to alimony, support, property division, and child support. The judge found that, as it related to the division of property, the agreement was fair and reasonable at the time of execution. However, although he further found that the wife’s ‘waiver of alimony at that time was a knowing, voluntary and intelligent waiver,’ the judge concluded that the waiver of alimony was unfair and unreasonable at the time the agreement was executed.[23]

The Probate Court, after a trial on the merits of the divorce, enforcing the prenuptial agreement with respect to the property division, awarded the wife the marital home worth $1,275,000 (subject to a $154,000 mortgage), $525,000 in cash, her Lexus automobile, plus jewelry worth $74,000 and most of the furnishings in the marital home.   Craig was assigned his separate property. The court awarded child support of $500 week and alimony of $1,000 per week.  Husband appealed from the alimony award and the Appeals Court affirmed the Probate Court judgment. The Appeals Court, echoed DeMatteo’s language about the special significance of alimony[24] and referenced French, supra. before it ultimately found that the alimony waiver was not a “fair and reasonable” waiver when it was executed in light of the known circumstances of the parties at the time as well as those circumstances that were “reasonably foreseeable.”[25]

Unlike the husband in Osborne, who, as a medical student, could anticipate being able to support himself in the event of a divorce, the Appeals Court found no evidence to suggest that “Donna would be in a position to reasonably support herself in the event of a divorce occurring well into the future.”   Id. at 728. On further appellate review, the Supreme Judicial Court, by a 7-2 decision, upheld the alimony waiver.  The court, in its “first look” analysis, found it critical that the agreement provided that in the event there was no jointly owned marital home at the time of divorce, the husband was required to assist wife in relocating and give her support based upon certain principles cognizable under domestic relations law such as:

the length of the marriage, their present employment, whether any children were born to the marriage and such other factors as are cognizable under domestic relations laws….

Disagreeing with the Appeals Court, the SJC found that Donna could reasonably anticipate that “ a home owned by the husband would exist in the event of a divorce,” and that, therefore, she would be entitled to support under the agreement.  Thus, the Court concluded, under the DeMatteo standard, the agreement, measured at its execution, did not strip the wife of “substantially all marital interests.”  It was found to be valid at its execution and survived the “first look.” Next, the Court was required to determine under the “second look” or “conscionability” stage, whether there was any reason not to enforce it.

The Court could find no such reason and vacated the Probate Court judgment to the extent that it awarded alimony payments to the Wife. Here, there has been no physical or mental deterioration of the wife.  She was self-supporting during a period of separation prior to their marriage. The wife has the marital home worth $1,275,000 and was awarded $525,000 in cash.  She was allowed to keep many of the contents of the marital home, including jewelry acquired since the marriage worth $74,000.  Given the assets she has been awarded, we cannot say that the agreement leaves the wife without sufficient property or maintenance.

XI. Duress and the Prenuptial Pregnancy: Biliouris v. Biliouris[26]

Timothy Biliouris and the future Mary Biliouris began dating in 1991. About a year later, Mary learned she was pregnant.  When Timothy learned of this, he told Mary he would not marry her unless she signed a prenuptial agreement.  Thereafter, Timothy’s attorney prepared an agreement that Timothy presented to Mary.  Mary consulted with an attorney who, after reviewing the agreement, advised her not to sign.  Mary met with Timothy and his attorney to discuss the agreement.  At the meeting, she was crying and although she stated initially she did not wish to sign it, Mary signed the agreement.   There were no negotiations concerning its terms.

Timothy and Mary married a few days later in January 1993. At the time of the execution of the agreement, Timothy earned about $330,000 per year and Mary earned about $87,000 per year.  Timothy’s premarital assets were worth $986,000.  Mary’s premarital assets were worth $100,000.  The agreement provided that the individual property of a party, and any appreciation thereon, would remain that party’s sole and exclusive property in the event of a divorce.  The agreement appears to have been silent about jointly held property.  The agreement included a waiver of alimony.

In 2001, the Husband filed for divorce.  The trial court, in 2003, upheld the agreement, permitting the Husband to keep his assets worth about $1,960,000 (the bulk of which could be traced to his premarital assets) and the Wife kept her assets of $105,000 plus a share of the jointly held property worth about $800,000.  In addition, she received $750 per week in child support, and the Husband was required to provide medical and life insurance.

The Wife appealed. The Wife’s first argument that she was under duress at the time of the execution of the agreement failed to persuade the Appeals Court in the same way it failed to persuade the trial court.  The Biliouris court instructs that to avoid a contract on the grounds of duress, a person needs to prove that he/she was “under the influence of such fear as precludes him from exercising free will and judgment,” or, put another way, was “divested of her free will and judgment.”

In this case, the Appeals Court acknowledged that Mary was presented with a “difficult choice” but the facts do not warrant a finding of duress.  Id. at 156-57. The Appeals Court appeared to be impressed with the fact that the wife had an attorney review the document, and, moreover, that she ignored the advice of counsel.  Equally notable to the court was the fact that the Husband told her that even if she did not sign the agreement, he would “act as a father to the child and support the child financially.”   Id. at 158.

Of course, the Court noted, the husband would have had a legal obligation, under M.G.L. c.209C §9, to support his out of wedlock regardless of marriage.  His statement to her, which was also a legal obligation, thus mitigated some of the economic pressures that may have flowed from a failure to get married.

Practitioners may wish to note that the Court cites with approval a few cases from other jurisdictions in which a duress claim involving a pregnant signatory was sufficient to avoid a prenuptial agreement.   In one case, the wife was able to avoid an agreement on the basis that, at the time of execution, she was a pregnant Ukrainian national whose visa was about to expire, could not understand the agreement and had no money to consult with an attorney or a translator.  Holler v. Holler, 364 S.C. 256, 266-268 (Ct. App. 2005)

In addition to the duress claim, Mary further argued that the waiver of alimony in the agreement should have been invalidated because it was not “fair and reasonable” when it was executed – in other words, that it failed the “first look.”

The Appeals Court dismissed the argument, relying on DeMatteo, on the basis that it could not be said that Mary was “stripped of substantially all marital interests.” Here, the Court noted that Mary was an “educated professional” with a “demonstrated earning capacity” at the time she executed the agreement.

Further, it noted that even though “the parties agreed that the wife would leave her job in order to be a stay at home mother,” there was no evidence to suggest that, measured at the time of execution, she “would be incapable of working and earning income to support herself in the event of a divorce.”  Id. at 159-60.

Moreover, the agreement permitted her to keep her separate property valued, at the time of execution, at $100,000, plus any appreciation thereon.  Also notable to the Court was that Mary had a history of being able to work full time while having three children under the age of eleven.

Further, she was receiving social security income of about $52,000 for the benefit of her children from the first marriage.  Id. at 160. Finally, echoing the SJC opinion in Austin, supra. the Court pointed out that, measured at the time of execution:

it was reasonably foreseeable that the parties would acquire a home in which to raise the combined families and that at least some portion of this asset would be available for the wife’s support in the event of a divorce.[27]

XII. Conclusion

From the evolution of the case law in this area, its consistencies as well as its anomalies, the practitioner who drafts a prenuptial agreement confronts the daunting task not only to analyze past decisions but, in no small part, to anticipate future ones.

That said, both parties, with the aid of counsel, may wish to contemplate “worst case scenarios” in terms of future case law.

Thus: (1) at the drafting stage, the proponent of an agreement may be wise to restrain himself/herself from seeking the most aggressive terms possible – in anticipation that future case law may not be as favorable and  (2) at the drafting stage, the opponent (or, at least, the non-proponent) may be wise to agree to terms with the assumption that they will be enforceable to the letter regardless of changed circumstances.