Validity of Premarital Agreements in USA

by | Jul 28, 2014

Validity of Premarital and Marital Agreements in the USA

All fifty states in the United States recognize the validity of premarital agreements and over half of the states have adopted the Uniform Premarital Agreement Act (“UPAA”) adopted in 1983 by the National Conference of Commissioners on Uniform State Laws (“NCCUSL”). The UPAA has been adopted by 30 states.[Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, West Virginia, and Wisconsin] The states of Alabama, Georgia, Kentucky, Louisiana, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Vermont, Washington, and Wyoming all have other unique legal requirements.

The UPAA encourages the enforceability of premarital agreements and requires that the agreement and any amendment be in writing and signed by both parties. The agreement is effective on the parties’ marriage. In 2012, NCCUSL adopted an updated version entitled the Uniform Premarital and Marital Agreements Act (“UPMAA”) which seeks to address both types of agreements that have led to conflicting laws, judgments, and uncertainty about enforcement as couples move from state to state. The UPMAA has been adopted by Colorado and North Dakota and has been introduced in Nevada and the District of Columbia.

The UPAA provides that parties to a premarital agreement may contract with respect to:

  • The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located.
  • The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest, mortgage, encumber, dispose of or otherwise manage and control property.
  • The disposition of property on separation, marital dissolution, death or the occurrence or non-occurrence of any other event.
  • The modification or elimination of spouse support.
  • The making of a will, trust or other arrangement to carry out the provisions of the agreement.
  • The ownership rights in and disposition of the death benefit from a life insurance policy.
  • The choice of law governing the construction of the agreement.
  • Finally, any other matter, including the parties’ personal rights and obligations not in violation of public policy or statute imposing a criminal penalty.
  • Premarital agreements may not seek to affect a child’s right to support.

Some jurisdiction provide that post-martial agreements are invalid as against public policy unless incident to a separation or divorce. The UPAA is expressly limited to premarital agreements only. However, premarital agreements may be amended or revoked after marriage provided it is in writing. No consideration is required for such amendment or revocation.[UPAA Sections 2 and 5 (1983)] The UPMMA covers both pre-marital and marital agreements.

The general approach of the UPMAA is that parties should be free within broad limits to choose the financial terms of their marriage, however a significant minority of states authorizes some form of fairness review based on the parties’ circumstances at the time the agreement is to be enforced. A few states put the burden of proof on the party seeking enforcement of marital and, more rarely, pre-marital agreements.

The UPMAA chooses to treat premarital agreements and marital agreements under the same set of principles and requirements. A number of states currently treat pre-marital agreements and marital agreements under different legal standards with higher burdens on those who wish to enforce marital agreements. The UPMAA takes a position that the UPMAA and common law principles are sufficient to deal with the likely problems related to both pre- and post-marital agreements.

Under the UPMAA, a premarital agreement or marital agreement may include terms not in violation of public policy including terms relating to: (1) rights of either or both spouses to an interest in a trust, inheritance, devise, gift and expectancy created by a third party; (2) appointment of fiduciary, guardian, conservator, personal representative or agent for person or property; (3) a tax matter; (4) the method for resolving a dispute arising under the agreement; (5) choice of law governing validity, enforceability, interpretation and construction of the agreements; or (6) formalities required to amend the agreement.

The UPMAA is meant to exclude separation agreements and marital settlement agreements from the scope of the UPMAA as those tend to have their own established standards for enforcement.

A premarital agreement is effective on marriage. A marital agreement is effective on signing by both parties. In neither event is consideration required. Marriage itself is considered consideration.

Leigh-Alexandra Basha

Leigh-Alexandra Basha

McDermott Will & Emery

Maud Udry-Alhanko

McDermott Will & Emery