Source: http://masscases.com/cases/sjc/457/457mass283.html
Timestamp: 2019-04-20 20:58:19+00:00

Document:
"that which faces a spouse attempting to save a long existing family relationship to which she has committed her best years"); Pacelli v. Pacelli, 319 N.J. Super. 185, 190 (App. Div. 1999) (wife faced more difficult choice "than the bride who is presented with a demand for a pre-nuptial agreement" because cost "would have been the destruction of a family and the stigma of a failed marriage"). See also American Law Institute, Principles of Family Dissolution: Analysis and Recommendations § 7.01 comment e (2002) (ALI Principles of Family Dissolution) ("opportunities for hard dealing may be greater" with marital contracts than with premarital contracts).
A separation agreement, in turn, is negotiated when a marriage has failed and the spouses "intend a permanent separation or marital dissolution." Id. at § 7.01(1)(c). See Knox v. Remick, supra at 436 (separation agreement is "a permanent resolution of [a married couple's] mutual rights and obligations, including support obligations between them"). The family unit will no longer be kept intact, and the parties may look to their own future economic interests. See Kindregan & Inker, supra (separation agreements, unlike marital agreements, are not executed "when the parties are still hopeful of saving a troubled marriage"). The circumstances surrounding marital agreements in contrast are "pregnant with the opportunity for one party to use the threat of dissolution 'to bargain themselves into positions of advantage.' " Pacelli v. Pacelli, supra at 195, quoting Mathie v. Mathie, 12 Utah 2d 116, 121 (1961).
Before a marital agreement is sanctioned by a court, careful scrutiny by the judge should determine at a minimum whether (1) each party has had an opportunity to obtain separate legal counsel of each party's own choosing; [Note 9] (2) there was fraud or coercion in obtaining the agreement; (3) all assets were fully disclosed by both parties before the agreement was executed; (4) each spouse knowingly and explicitly agreed in writing to waive the right to a judicial equitable division of assets and all marital rights in the event of a divorce; and (5) the terms of the agreement are fair and reasonable at the time of execution and at the time of divorce. [Note 10] Where one spouse challenges the enforceability of the agreement, the spouse seeking to enforce the agreement shall bear the burden of satisfying these criteria. See ALI Principles of Family Dissolution, supra at § 7.04(2) ("A party seeking to enforce an agreement must show that the other party's consent to it was informed and not obtained under duress").
agreements are not enforceable if tainted by fraud or coercion. Fogg v. Fogg, 409 Mass. 531 , 535 (1991). We agree with those States that have held that the spouse seeking to enforce a marital agreement, in contrast to the enforcement of contracts generally, must establish that the other spouse's consent was not obtained through coercion or fraud. See, e.g., Matter of Estate of Harber, supra at 88 (where marital agreement challenged on grounds of fraud or coercion, it is other party's "burden to prove by clear and convincing evidence that the agreement was not fraudulent or coerced"). [Note 11] See also ALI Principles of Family Dissolution, supra at § 7.04 comment b (burden shifting reflects appropriate "heightened scrutiny" of bargaining process leading to marital agreements as compared with bargaining process leading to commercial contracts). Cf. Matter of Estate of Gab, supra at 926, quoting Keith v. Keith, 37 S.D. 132, 133 (1916) ("less evidence is required in such cases to establish the fraud, oppression, or deception than if the parties had been dealing at arm's length as strangers").
marital agreements because each spouse owes a duty of absolute fidelity to the other. See Krapf v. Krapf, 439 Mass. 97 , 103 (2003) (spouses "stand as fiduciaries to each other, and will be held to the highest standards of good faith and fair dealing in the performance of their contractual obligations"). Because a marital agreement is consummated without the safeguards attendant to divorce proceedings, such as court-ordered disclosures, see Rule 401 (a) of the Supplemental Rules of the Probate Court, Mass. Ann. Laws Court Rules, at 1133 (LexisNexis 2008-2009), and discovery, enforcement of a marital agreement can occur only when a judge finds that there was a full disclosure of all assets of both spouses, whether jointly or separately held. The requirement of full disclosure may be satisfied if "prior to signing the agreement the party seeking to enforce it provided the other party with a written statement accurately listing (i) his or her significant assets, and their total approximate market value; (ii) his or her approximate annual income . . . and (iii) any significant future acquisitions, or changes in income, to which the party has a current legal entitlement, or which the party reasonably expects to realize" in the near future. ALI Principles of Family Dissolution, supra at § 7.04(5). [Note 15] The disclosure need not be exact, but must approximate the value of the assets.
by marriage are not potential benefits for a divorcing spouse but an integral aspect of the marriage itself. The Legislature has required that the relinquishment of marital rights be assessed in light of the factors set forth in G. L. c. 208, § 34. In DeMatteo v. DeMatteo, supra at 33, we noted that "it is entirely appropriate" that the judge consider the factors set forth in G. L. c. 208, § 34, in evaluating a separation agreement; the "separation agreement is, after all, a substitute for the independent application by a judge" of the equitable division of parties' property as mandated by the Legislature. Similar considerations inform our view of the enforceability of marital agreements, with this additional observation: parties to a marital agreement do not bargain as freely as separating spouses may do. See part 3, supra. Because a marital agreement is executed when the parties do not contemplate divorce and when they owe absolute fidelity to each other, the heightened scrutiny to which we made reference earlier applies in this context as well.
In evaluating whether a marital agreement is fair and reasonable at the time of execution, a judge should accordingly consider the entire context in which the agreement was reached, allowing greater latitude for agreements reached where each party is represented by separate counsel of their own choosing. See note 9, supra. A judge may consider "the magnitude of the disparity between the outcome under the agreement and the outcome under otherwise prevailing legal principles," whether "the purpose of the agreement was to benefit or protect the interests of third parties (such as the children from a prior relationship)," and "the impact of the agreement's enforcement upon the children of the parties." ALI Principles of Family Dissolution, supra at § 7.05(3)(a), (c), (d). Other factors may include the length of the marriage, the motives of the contracting spouses, their respective bargaining positions, the circumstances giving rise to the marital agreement, the degree of the pressure, if any, experienced by the contesting spouse, and other circumstances the judge finds relevant.
of separation agreements, the § 34 factors are not determinative; the judge is not required to "divine" what judgment she would likely enter had the case been litigated in the absence of an agreement. Id. [Note 21] Rather, she considers only whether the agreement is "fair and reasonable" when considered in light of the factors we have identified and any other relevant circumstances. Id.
The gravamen of the wife's complaint is that she will be left with a disproportionately small percentage of the couple's marital assets. A marital agreement need not provide for an equal distribution of assets, as long as a judge has concluded that the agreement is fair and reasonable. In her careful and detailed findings, the judge considered the factors set forth in G. L. c. 208, § 34, as well as many of the other factors we have just detailed. The wife points to no material change between the time she, on the advice of counsel, executed the marital agreement and the husband's petition for divorce in 2006. We again see no reason to conclude that the judge was erroneous in her conclusion.
[Note 1] A "postnuptial" or "marital" agreement is an "agreement between spouses who plan to continue their marriage that alters or confirms the legal rights and obligations that would otherwise arise under . . . [the] law governing marital dissolution." American Law Institute, Principles of the Law of Family Dissolution: Analysis and Recommendations § 7.01(1)(b) (2002) (ALI Principles of Family Dissolution). See Fogg v. Fogg, 409 Mass. 531 , 531-532 (1991) (same). Consistent with the ALI, we adopt the term "premarital" agreement for what is often termed a prenuptial or antenuptial agreement, and the term "marital" agreement for what is often termed a postnuptial agreement. See ALI Principles of Family Dissolution, supra at § 7.01(1)(a), (b).
[Note 7] Several States have enacted statutes that permit the enforcement of marital agreements. See, e.g., Tibbs v. Anderson, 580 So. 2d 1337, 1339 (Ala. 1991); Boudreaux v. Boudreaux, 745 So. 2d 61, 63 (La. Ct. App. 1999); Button v. Button, 131 Wis. 2d 84, 87-88 (1986). But see Ohio Rev. Code Ann. § 3103.06 (West 2005) ("A husband and wife cannot, by any contract with each other, alter their legal relations, except that they may agree to an immediate separation and make provisions for the support of either of them and their children during the separation"). Many States have not addressed the issue. We are aware of no jurisdiction that has declined to enforce such agreements unless required to do so by statute.
[Note 8] The ALI takes the position that "the principles applicable to marital and premarital agreements are the same" and suggests, as some States have done, applying substantially the same standards for enforcing both types of agreements. ALI Principles of Family Dissolution, supra at § 7.01 Reporter's Notes to comment e, citing Reese v. Reese, 984 P.2d 987 (Utah 1999). While we draw on some aspects of the ALI's suggestions on how to evaluate marital agreements, we conclude that the principles applicable to premarital and marital agreements are not the same in all respects.
[Note 9] We do not require, as do some other States, that a marital agreement will be enforceable only if each spouse is represented by separate counsel. See, e.g., Minn. Stat. Ann. § 519.11(1a)(c) (West 2006) ("A postnuptial contract or settlement is valid and enforceable only if at the time of its execution each spouse is represented by separate legal counsel"). Reliance on the advice of experienced, independent legal counsel, however, will go a long way toward ensuring the enforceability of an agreement. Cf. ALI Principles of Family Dissolution, supra at § 7.04 (marital agreement "rebuttably presumed" to satisfy showing that contesting party's consent was "informed and not obtained under duress" if parties were "advised to obtain independent legal counsel, and had reasonable opportunity to do so before the agreement's execution"). Here it is undisputed that both parties to this agreement not only had the opportunity to, but did, obtain separate legal counsel.
[Note 10] The wife argues that she did not receive "sufficient" consideration because the financial components of the agreements were "far less" than she was "already entitled to receive" on divorce. In this case, and likely would be in any case, this is in essence an argument that the marital agreement was not fair and reasonable. See part 3.d, infra. Because the marital agreement was supported by consideration, we need not consider whether a marital agreement needs to be supported by consideration. See ALI Principles of Dissolution, supra at § 7.01(4) (consideration not required to create enforceable marital agreement).
[Note 11] We do not agree with the Arizona court, see Matter of Estate of Harber, 104 Ariz. 79, 88 (1969), that the burden must be satisfied by "clear and convincing" evidence. See ALI Principles of Family Dissolution, supra at § 7.04 comment b (shift burden of proof to spouse seeking to enforce agreement, but not suggesting proof by clear and convincing evidence).
[Note 14] The wife testified at trial that in or around August, 2004, several weeks after the agreement was signed, the parties had a discussion that led the wife to believe that their marriage was over, and the parties then sought the advice of their marriage counsellor, as well as their son's physician, to consider a separation that would be the least disruptive for him. The wife argues that the judge erred in not allowing her to testify concerning the contents of this conversation, which she claims would have shown that the husband did not intend to stay in the marriage when he asked her to sign the agreement. The judge excluded her testimony on the grounds of "spousal disqualification." That evidentiary rule provides that "a witness shall not testify as to private conversations with a spouse occurring during their marriage," see Mass. G. Evid. § 504(b) (2010), but recognizes an exception for proceedings "arising out of or involving a contract between spouses," id. at § 504(b)(2)(A). We question whether the evidence should have been excluded, given the exception to the spousal disqualification rule. Even if the ruling was erroneous, however, it was harmless. There was ample other evidence to support the judge's finding that the husband did not fraudulently induce the wife to sign the agreement.
[Note 15] The ALI Principles of Family Dissolution, supra at § 7.04(5), specifies that the spouse seeking to enforce the agreement must have disclosed his income for "each of the preceding three years" and any significant future acquisitions or changes in income that the party "reasonably expects to realize within three years of the agreement's execution." We need not determine whether a three-year period is appropriate in this case because the wife was aware of the couple's marital assets and income, and participated regularly in meetings with the couple's financial advisor throughout the marriage. See ALI Principles of Family Dissolution, supra at § 7.04(5) comment g (evidence that contesting spouse has knowledge of all other spouse's assets independent of any written disclosures will satisfy requirement of disclosure).
[Note 20] In relevant part, G. L. c. 208, § 34, provides that a judge "shall consider the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. . . . [T]he court shall also consider the present and future needs of the dependent children of the marriage. The court may also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit."

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