Prenup Struck Down by “Second Look” Test

Prenuptial Agreements are a very special type of contract between two people.  Unlike other contracts which are valid if there is a “meeting of the minds” at the time of the execution of the contract, prenups afford the parties a “second look” or a second bite at the apple to determine validity.  What does that mean in practice?  It means that a prenup has to be fair and reasonable at the time that the parties enter into it AND it also has to be somewhat fair and reasonable at the time that the parties need to use it (when they divorce).  If at the time of divorce, enforcement of the prenup would be so unfair and unconscionable, then the court can invalidate the agreement even if the parties had entered into it with full knowledge and with lawyers on both sides.

A recent case from the Appeals Court illustrates this principle.  In Kelcourse v. Kelcourse, the Appeals Court invalidated a prenup when it found that the prenup to be unconscionable if applied.  The husband and wife entered into this prenup with a full financial disclosure and with the assistance of 2 separate attorneys.  The prenup stated that all property before marriage is considered “separate property” and the marital home of the parties would belong to the wife as her “separate property.”  The parties were married for approximately 5 years and wife filed for divorce.  The marital home they were living in was at the time very dilapidated and the cost to repair the home far outweighed the mortgage amount.  The house was worthless, in other words.  At the time of divorce, husband’s assets was about $1.7 Million while the wife only made $300/week.  The Probate and Family Court trial judge determined that the prenup was valid at the time of execution but due to the “second look” test, she finds it invalid at the time of divorce.  The trial judge awarded the wife $400,000 as replacement value for the dilapidated home.

Even though this case was appealed to the Appeals Court, it is not new law.  This principle of the “second look” test is well established law in Massachusetts.  However, it is a useful reminder to attorneys who draft prenuptial agreements and also to parties to remember that no Agreement is bulletproof.  There is always a possibility that even the best drafted prenuptial agreement might be held invalid when applied at the time of divorce.

 

Alimony and Prenuptial Agreements

One of the most typical reasons that couples want to get a prenup done before marriage has to do with everyone’s fear of Alimony.  Alimony is money that one spouse pays to another spouse during or after a divorce to maintain the lower earning spouse’s standard of living. Many people who come to me with…

Why do we both need attorneys when drafting a prenuptial agreement? (Part III)

Previously, I had discussed why both person must have his or her own attorney when signing a prenuptial agreement, as well as what the job of a drafting attorney is.  Now, I will discuss what exactly the reviewing attorney does.  This discussion may be the most important of all three, since the information is often…

Why do we both need attorneys when drafting a prenuptial agreement? (Part II)

As discussed in my last post, in Massachusetts, a prenuptial agreement is only valid if each person has his or her own attorney.  While I explained the why, I didn’t explain the how: namely, the job of each attorney.  It would be a waste of time, money, and energy for both attorneys to do the…

Why do we both need attorneys when drafting a prenuptial agreement? (Part I)

Many people are surprised to learn that if you want to sign a valid prenuptial agreement in Massachusetts, each person needs to have his or her own attorney.  The need for two attorneys seems counter intuitive, because you and your future spouse think of drafting your prenuptial agreement as a cooperative process rather than an adversarial…

Protecting Your Pets in a Prenuptial Agreement

  According to the American Veterinary Medical Association, as of 2007, roughly 37% of American households include at least one dog, and about 32% include at least one cat.  Those of us who own pets often think of them as members of the family.  We lavish them with affection, and invest time and money in…

How to Hire a Prenup Attorney

Most prenup attorneys are also divorce attorneys.  That’s because divorce lawyers know very well the divorce laws of the state and are probably in the best position to advise clients about prenups (to hedge against divorce).  However, their strengths can also be their weakness.  Although divorce lawyers know the law very well, they also tend…

Using a Prenup to Deter Divorce

The main purpose of a prenuptial agreement is to agree, ahead of time, to the terms of a divorce, if it should ever happen.  We all hope divorce never happens, just like how we hope when buying health or life insurance, to never have to use it. A fellow (non-legal) blogger Audrey Pollnow has another…

Does a prenup ever expire?

There is no law that dictates that after a certain number of years, a prenuptial agreement automatically expire.  However, you can have a prenup that included language in it so that it will expire and have no more effect after a certain number of years.  This is called a sunset clause.  Absent the sunset clause…