Many people enter marriage wanting to protect certain assets in the event the marriage were later to fail. When parties enter a marriage and one or both of the members of the couple own businesses or large assets, it is common for one or both of them to want to keep the assets or businesses separate from marital property and protected from being divided in a divorce. To accomplish this, parties will often enter into prenuptial and postnuptial agreements in Utah.
A prenuptial agreement is a is a contract entered into prior to marriage, civil union or any other agreement prior to the main agreement by the people intending to marry or contract with each other. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery; further conditions of guardianship may be included as well.
A postnuptial agreement is a written contract executed after a couple gets married, or have entered a civil union, to settle the couple’s affairs and assets in the event of a separation or divorce. Like the contents of a prenuptial agreement, provisions vary widely but commonly includes provisions for division of property and spousal support in the event of divorce, death of one of the spouses, or breakup of marriage. In rare cases, a “prenup” may be enforceable even without a marriage, such as with a domestic partnership or registered partnership.
The Utah Code governing prenuptial agreements can be found in the Uniform Premarital Agreement Act. In Utah, prenuptial and postnuptial agreements must stand up to ordinary contract principles. Estate of Beesley, 883 P.2d 1343, 1346 (Utah 1994). For a written agreement to be valid:
- Both parties must have capacity.
- There must be consideration: Each side must give something up in the exchange.
- There must be a meeting of the minds: Both parties must assent to the same thing in the same sense, so that their minds meet as to all terms.
Additionally, due to the unique relationship between a husband and wife, marital agreements may be deemed invalid where there is evidence of fraud, coercion or material nondisclosure. D’Aston v. D’Aston, 808 P.2d 111, 112-13 (Utah 1990). The Utah Appellate Court explained:
“Unlike a party negotiating at arm’s length, who generally will view any proposal with a degree of skepticism, a party to a premarital agreement is much less likely to critically examine representations made by the other party. The mutual trust between the parties raises an expectation that each party will act in the other’s best interest. The closeness of this relationship, however, also renders it particularly susceptible to abuse. Parties to premarital agreements therefore are held to the highest degree of good faith, honesty, and candor.”
Estate of Beesley, 883 P.2d 1343 at 1346.
It is easy to get a pre- or post-nuptial agreement done wrong. Even the smallest failure to comply with the statutes and the way Utah’s appellate courts construe them can result in an agreement being deemed invalid and unenforceable. As pre- and post-nuptial agreements are reviewed with heightened scrutiny by the courts, it’s wise to hire an attorney who has experience (and courage) in drafting prenuptial and postnuptial agreements.