Why Aren’t Pre-nups Always Enforced?

Posted on Tuesday, June 12th, 2018 by Tim Simonson and is filed under Divorce,  Minnesota,  Pre-nup.

Minnesota law allows couples, before marriage, to enter in to a contract promising to leave each other’s stuff alone in the event of a divorce. This contact, dubbed an ‘anternuptial agreement’ by lawmakers is more commonly known as a ‘pre-nup’. The idea behind a pre-nup or antenuptial agreement is to protect what was ours before marriage.

But can a court ignore a pre-nup and award property to a former spouse anyways? The answer is, yes.

Pre-nups; the Essentials

The best way to make sure a pre-nup is not ignored by a divorce court, is to make sure the agreement is property drafted. That’s not hard to do. Lawmakers have laid out only two simple requirements for that to happen:

full and fair disclosure of the earnings and property of each party, and

the parties have had an opportunity to consult with legal counsel of their own choice

See Minn. Stat. §519.11, subd. 1

Basically all that you have to do is make sure you both acknowledge that you had a chance to speak to a lawyer, and, you didn’t hide anything! But if it’s that easy to prepare a pre-nup, then why don’t divorce courts enforce them all the time? The reason is that sometimes pre-nups can get a little more complicated when parties go beyond the simple task of declaring that what they have before marriage is ‘off limits’.

When Pre-nups Fail

Take, for example, a recent case hear by the Minnesota Supreme Court, entitled ‘Kremer vs. Kremer’. The Supreme Court held that their pre-nup, which prevented the Wife from having rights to property acquired after the marriage, went too fair and could not be enforced.

Even though the Kremers’ pre-nup acknowledged that the parties fully disclosed their earnings and assets, and even though they both acknowledged having the right to consult with a lawyer, the court still rejected it.

Now, this doesn’t mean that a pre-nup can’t deal with property acquired after marriage. It just means that court have a harder time deciding whether such agreements are fair or not. And that those who enter into these agreements need to be very careful with how those agreements are prepared.

Because the legislature didn’t leave any detailed instructions on “how to make a contract that keeps your spouse from taking property acquired after marriage”, the court has to look at whether such an agreement can be enforced under the common law (judge made law) not the statute (legislature made law).

The common-law test for whether a pre-nup is valid, requires that the agreement have both procedural fairness (how the agreement was prepared) and substantive fairness (whether or not its terms are fair) is whether an agreement’s terms are unconscionable or oppressive. In re Estate of Kinney, 733 N.W.2d 118 (Minn. 2007).

So if the pre-nup tries to limit a spouse’s right to acquire rights to property acquired after marriage, the court’s going to need to see two things:

whether the agreement equitably and fairly made; and

whether the terms of the agreement are unconscionable and oppressive

Procedural Fairness

The court looked at the Kremer’s pre-nup and decided that the agreement was not created in a fair and equitable manner. In making its decision the court looked at the Kremer’s circumstances before marriage. In that case, one spouse entered the marriage with significantly fewer assets, and the pre-nup would have left that spouse financially disadvantaged in the event of a divorce. Also, the spouse who wanted the pre-nup, worked on it for months in secret, and then presented it 3 days before the weeding and threatened to ‘call the wedding off’ if the agreement was not signed.

The court looked at the circumstances surrounding the creation of the pre-nup, and decided that that it lacked procedural fairness, and therefore declared it unenforceable, even though it met the requirements provided in the statute (full disclosure of assets, and acknowledging the right to legal counsel).

In summary, while I still recommend watching Kremer vs. Kremer for its powerful portrayal of the heart-wrenching circumstances surrounding child custody disputes, this classic will offer no instructive value to those looking at entering into or enforcing a pre-nup. For that, I recommend consulting with an experienced family law attorney.

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If you are facing divorce and any of the divorce-related issues such as spousal maintenance, child support, child custody, property division, or domestic abuse matters, you need our experienced Minneapolis divorce attorneys to help you. Contact Beyer & Simonson in Edina, Minnesota today at (952) 303-6007.