A Primer on What a Connecticut Prenup Is
A prenuptial agreement is a written contract entered into prior to marriage that delineates the rights and expectations of the parties in the event of divorce or death. In its most basic form, it is either a one or two page sheet of paper that addresses the division of property and alimony if the parties were to ever divorce. More sophisticated and particle agreements may address the issue of disposition of assets after death (i.e. will substitutes) or the waiver of spousal rights with regard to probate estate assets. Or, it may address such topics as ownership and payment of debt incurred during the marriage. It may also address the proper handling of children (custody, child support, visitation). As all approached to forming a prenuptial agreement are case specific, the document can be a very simple text or contain pages upon pages of text and detail. Prenuptial agreements are governed by both statute and the common law (case law). Connecticut law recognizes prenuptial agreements as enforceable contracts when properly drafted . Section 46b-36f of the Connecticut General Statutes sets forth the general requirements for a prenuptial agreement to be enforceable: a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that (1) that party did not execute the agreement voluntarily or (2) the agreement was unconscionable when the agreement was executed and that party was not given a fair and reasonable disclosure of the property or financial obligations of the other party, did not voluntarily and expressly waive in writing any right to disclosure of the property or financial obligations of the other party beyond the disclosure that was provided, and did not have adequate knowledge of the property or financial obligations of the other party.
Connecticut Judge Thomas Moukawsher of the Superior Court has held that in order to be enforceable, prenuptial agreements must "(1) be fair and reasonable both when made and when enforcement is sought, (2) be entered into knowingly and voluntarily, (3) be freely made without undue influence, coercion, fraud or mistake and (4) be entered into after full, fair and reasonable disclosure of the relevant assets of each party." He further held that failure of a prenuptial agreement to address issues such as the waiver of alimony rights, the ownership and payment of debt, and the disposition of property if there is no children may evidence that there was no meeting of the minds with regard these issues and that the agreement should be set aside as a mutual mistake.
What Connecticut Requires for the Creation of a Prenup
A prenuptial agreement in Connecticut must be executed by both parties in writing before a notary public. The written agreement must be signed by both parties before marriage and comes into existence upon marriage. While you do not filed the prenuptial agreement with the court or have a judge approve it, once a divorce is filed, the agreement will be included in the court file and may be used as evidence in the court proceeding.
As a matter of law, each party must be provided complete financial disclosure before entering into a prenuptial agreement. The disclosure is often done with the completion of the required financial affidavits which is a sworn statement identifying each parties assets, liabilities and income. The financial affidavit is often signed upon by both parties during the initial stages of marriage when the agreement is created, and then updated as required by the court during the pendency of the divorce.
Reasons to Carefully Consider the Contents of a Prenup
When it comes to marriages, foreknowledge can be good to have on your side. Money can be the cause of the some of the biggest titanic disputes of any relationship, and prenuptial agreements are designed to alleviate the impact of those issues. In Connecticut, prenuptial agreements are legally binding contracts that sorbate both spouses to terms that are established before marriage. These agreements can contain provisions for asset protection and management of assets in the event of divorce or death of one of the parties.
The major benefits of a prenuptial agreement include:
Laying Your Assets on the Table
Essentially, this form of disclosure is required by Connecticut law. So both spouses are aware of their right and they should both be fair and make disclosures that are equitable. Not all states require such full financial disclosures so a prenuptial agreement will protect the individual who does disclose.
Avoiding Misunderstandings and Deceit
Because of the level of financial disclosure required by the Connecticut law, pre-nup agreements avoid answers that could distort the truth – even after marriage has been entered into. A spouse will not be able to hide assets and provisions for those assets will be already agreed to. Being able to settle things outside the courts even in the event of a trust is also an advantage. Breaking down any potential for resentment is also an advantage.
Protecting Gifts
Gifts are not automatically protected during a marriage so prenuptial agreements make it easy to determine the ownership of the gift. Gift provisions prevent future third parties from claiming what is by law given.
Protecting Third Parties
A husband may be married to a wife who owns a business. He hasn’t worked in his wife’s business, yet attempts to take a share of it when the marriage goes south. A pre-nup protects the wife and her business. On another side of the coin, a third party e.g. children or relatives of either spouse can become protected from future join creditors.
Where People Go Wrong with Connecticut Premarital Agreements
Common myths surround Connecticut prenuptial agreements that leave individuals thinking they need only sign one to protect their wealth or property. Maybe the spouse to be is somewhat persuasive that it would be unromantic to ask for a prenuptial agreement, or take the line ‘what do you think – we’re not going to get divorced!’ The following are common myths, followed by the legal realities:
MYTH: Prenuptial agreements aren’t valid in Connecticut.
FACT: As a result of the Hussey decision in 1987, prenuptial agreements are enforceable in Connecticut. Connecticut will enforce these agreements if both parties enter into them voluntarily and the terms are conscionable.
MYTH: Signing away marital rights is against the law.
FACT: It is not against the law to waive marital rights, otherwise alimony awards would be considered illegal.
MYTH: A prenuptial agreement offsets the legal duty to support a spouse during illness and incapacity.
FACT: Connecticut courts will set aside provisions of a prenuptial agreement when a spouse needs treatment and the other spouse has the means to provide such treatment.
MYTH: Certain agreements in a prenuptial contract will always be enforced.
FACT: Provisions for child support and custody are not enforceable in prenuptial agreements and will be set aside.
Tips for Writing Through the Challenges of Premarital Agreements
One of the most common reasons prenuptial agreements get tossed out in Connecticut is because the agreement was not "fair" when signed. What does this mean in practice? A simple set of rules should apply in drafting a fair prenuptial agreement. First, the parties should have adequate legal representation on both sides. Each party should also fully disclose all material financial information as well. Once that is done, the party doing the drafting should determine if his or her partner would sign the agreement in its current form. If the answer is "no", then it is time to revisit the agreement as fairness dictates that each party have as close to an equal bargaining power at the time of signing the agreement. The idea is to have the agreement be relatively equal so as not to disadvantage one party based on economic and non-economic circumstances at the time of signing. If you go into the marriage with significant income or assets, you may be entitled to greater rights, even if the agreement states otherwise. In other words , while the parties can contractually agree to a division of property in the event of divorce or the enforcement of spousal support in the event of divorce, the agreement must be fair at the time of signing. With the above in mind, there are some practical considerations to the preparation of a fair and enforceable prenuptial agreement. Don’t hide the ball. While the more money you have, the more disclosures you’ll need to make, don’t try to hide what you have. It’s fine to be prudent and not divulge every asset you have but never be deliberately secretive. Telling someone else you’ll "tell them later" would be a big mistake. Timing is also important. Once you are planning a wedding, you’ll have little leverage with your partner. (Well, you’ll have his/her business partner on their side!!) Ideally, you want to come to the discussion with your agreement well before the wedding is around the corner. This all sounds like it could be a bit painful. But it doesn’t have to be. So long as you enter the marriage on equal footing, the agreement should work.
Understanding the Enforceability of All Prenups
Enforcement of a prenuptial agreement in Connecticut turns on a number of factors. In general, these contracts are enforced so long as the parties have complied with the requirements of the statute Conn. Gen. Stat. § 46b-36f. If a party was represented by an attorney at the time the agreement was executed, then that is almost always sufficient to meet the tests under the statute. Additionally, if the party seeking the benefit of the agreement had adequate financial disclosure and the contract was not procured fraudulently, then most prenuptial agreements are honored by the Court.
Because the enforcement of prenuptial contracts in Connecticut tends to favor enforcement, the primary battle over enforcement is less a question of whether the contract will be enforced at all, but rather what defenses will be pursued in order to challenge it.
First, a prenuptial agreement may not be enforced if the terms of the contract would result in extreme hardship to one party (Conn. Gen. Stat. § 46b-36f(c)).
Second, contracts entered into prior to October 1, 2014, may not be enforceable if it would be unconscionable to do so. This is a particularly difficult standard to meet, but in some circumstances, the enforceability of an otherwise valid contract can be challenged on these grounds. See Conn. Gen. Stat. § 46b-36j.
Third, a contract might be unenforceable if based on fraud. Conn. Gen. Stat. § 46b-36f(c).
Fourth, contracts entered into prior to October 1, 2014, are not enforceable if they were unfair or unreasonable. Conn. Gen. Stat. § 46b-36f(c).
Finally, there could be other defenses to the contract raised based upon a "legal standard for the formation of contracts." Conn. Gen. Stat. § 46b-36f(c).
The Primary Role of a Legal Advisor
Like many contracts, a Connecticut prenuptial agreement is stronger and more enforceable when both parties have the benefit of consulting with legal counsel. For the agreement to be fully enforceable, said legal counsel should be independent from the attorney drafting the agreement for the party who is proposing the agreement. The Illinois court in In re Marriage of Reed, 63 Ill. App.3d 17 (1988) reached the conclusion that without independent legal counsel at the time of the agreement, "a rule would be created whereby the strongest party to a divorce would have an unfair advantage." In the context of a prenuptial agreement, the spouse who did not receive independent counsel would have no protection from the possibility that he or she was under undue influence when agreeing to the terms of a prenuptial agreement leveraged by the stronger party to the marriage.
In the absence of independent legal counsel, the burden of proving the prenuptial agreement’s enforceability would fall on the proposing party. In Buick v. Prairie Materials, 114 F.3d 705 (7th Cir. 1997), a wife unrepresented by counsel was unable to carry the evidentiary burden of proving the enforceability of her prenuptial agreement since it did not meet the eight statutory requirements of the Illinois Uniform Premarital Agreement Act. Under Connecticut law, a showing that the spouse who did not receive representation must present in order to meet a higher evidentiary burden of showing that the prenuptial agreement is both conscionable and entered into voluntarily appears to be similar to the high evidentiary burden in Buick.
The failure to consult with independent legal counsel when entering into a prenuptial agreement does not mean that the agreement will be invalidated. Many courts will uphold the agreement with a legal finding that the party who did not receive independent counsel has the burden of proving that the agreement is unconscionable and was not entered into voluntarily (as opposed to requiring the proposing party to meet the "undue influence" standard if the party were represented by separate legal counsel). To avoid this fact-specific inquiry and potentially debilitating evidentiary burden, however, it is advisable to seek independent counsel at the time of the agreement.
Possibilities Beyond Traditional Prenup Agreements
Sometimes, there is a better alternative than a prenuptial agreement. If you have been married before, you may already have a postnuptial agreement in place with your former spouse. If you are in that situation, it is very important that the terms of your postnuptial agreement with your current fiancée are consistent with its terms. You may still have some rights under your former postnuptial agreement that will affect your decision about whether to sign a new one.
If you are currently married and would like protection for custodial and non-custodial parental rights for children born subsequent to your current marriage, you can enter into a postnuptial agreement that defines those rights. It may also be a good idea to incorporate some of the provisions in your current postnuptial agreement into your new one . Likewise, if you are engaged but have previously cohabitated with your new partner, you can put a provision in your postnuptial agreement that protects property accumulated by either party during the term of the cohabitation from being considered part of the marital estate.
Although it is not common, Connecticut courts have the ability to craft and enforce cohabitation agreements for common law spouses. Referring back to a prior chapter in this book, Connecticut courts can recognize a body of case law developed over the years that recognizes the rights of cohabitating parties. If you are not married yet and wish to form a domestic relationship with your partner that will govern over all aspects of it, up to and including a breakup of that relationship, you can have a cohabitation agreement in place.