Throughout the 20th century, state laws constantly evolved relative to prenuptial agreements (prenups). Many states opened the doors in the early part of the century by allowing prenups that addressed death, but not divorce. By the latter part of the century, it was commonplace for states to allow prenups that addressed death and divorce, provided that they met certain requirements pertaining to: (1) their validity, for example, financial disclosure, at the time they were executed, and (2) their enforceability, that is, not offending the public policy of the state at the time that enforcement was sought.
To that end, there’s a plethora of cases nationwide addressing the requirements for a valid prenup. In general terms, the consensus for validity requires that the prenup is: (1) in a writing, signed by the parties; (2) entered into voluntarily; (3) the product of full and frank financial disclosures; and (4) not the product of fraud, duress or misrepresentation. Separately, several states developed somewhat overlapping standards for enforceability to test whether the prenup offended the public policy of the state at the time of enforcement. Generally, those cases look at whether: (1) the agreement was obtained through fraud, duress or mistake or misrepresentation or nondisclosure of material fact; (2) the agreement was unconscionable when executed; or (3) the facts and circumstances changed in an unforeseeable way since the agreement was executed, so as to make its enforcement unfair and unreasonable.
While prenups became commonplace across the nation, the status of postnuptial agreements (postnups) varies widely. Some states allow postnups if they meet standards for validity similar to prenups. Other states only allow postnups if they meet such standards and they’re either reconciliation agreements, separation agreements or settlement agreements. Some states don’t allow postnups at all unless a divorce case is pending, and the agreement is the settlement agreement. The primary discussion in the cases related to postnups focuses on the issues of consideration and fiduciary duties related to disclosure. While it’s black letter law that the marriage itself is the consideration for a prenup, the marriage standing alone can’t logically be the consideration for a postnup. Thus, the question looms in many states as to the validity and/or enforceability of a postnup based on the underlying consideration and the special fiduciary relationship between the parties as spouses.
Query #1: Is an amendment to a prenup agreement simply a postnup in disguise?
Query #2: If an amendment to a prenup should fail as an impermissible, invalid or unenforceable postnup, then what’s the status of the original prenup?
The following cases offer perspectives on how courts around the country have addressed these issues.
Postnup Revoked Prenup
In Hansen v. Hansen,1 Max and Karin Hansen were married in 2009. Shortly before their marriage, they executed a prenup. During the marriage, they executed two postnups—one in 2011 and one in 2013. Max filed for divorce in 2016, and the parties disagreed about which agreement should control. The lower court held that the 2013 postnup agreement controlled. On appeal, the court noted that neither Max nor Karin contested the validity of the prenup (and such agreements are favored in Iowa and binding if valid). However, in Iowa, the legislature hasn’t authorized postnups to bind courts in a divorce. Courts may consider postnups as one of only many factors in a divorce, or they may choose to entirely ignore postnups. Max argued that the postnups were actually amendments to the prenup and that the prenup should be considered binding on the court as amended. The court disagreed, holding instead that prenups can’t be postnuptially modified in Iowa. Thus, the postnups couldn’t be considered amendments to the prenup and instead are treated as postnups. Additionally, the language of the first postnup was clear that it intended to revoke the prenup.
In Iowa, a prenup may be revoked after marriage without consideration. The fact that the revocation provision was included in a postnup that was unenforceable as an amendment to the prenup and that wasn’t binding on the court (because postnups aren’t binding) was inconsequential because the postnup included a severability clause. Thus, the court concluded that the postnups revoked the prenup because the revocation provision was in writing, consented to by both Max and Karin and didn’t require consideration.
The court decided to consider the 2013 agreement as one factor in determining the distribution of property, but held that it wasn’t binding on the ultimate distribution of property or spousal support.
Modification of Prenup
In Boyer v. Boyer,2 Glenn and Judy Boyer entered into a prenup. After marriage, they modified the prenup by further written agreement so they could use Glenn’s separate funds to improve Judy’s home (her separate property) and, in turn, Glenn received a proportionate interest in Judy’s separate property based on the amount of his investment. The trial court held that a prenup couldn’t be modified during the marriage and distributed the spouses’ property as contemplated in the original prenup. The court also awarded Glenn a lien on Judy’s residence in recognition of the expenditures he made to improve the home.
Glenn appealed, asserting that the modification was valid and should be enforced. The Court of Appeals held that based on principles of general contract law, prenups in Oklahoma may be modified postnuptially by the parties with respect to property provisions, provided the modification was fairly entered into, the intentions of the parties were clearly expressed and the agreement itself was fair.
Amended Prenup is Postnup
In Hendrick v. Hendrick,3 Thomas and Virginia Hendrick entered into a prenup that was amended twice during the marriage. During the divorce, the trial court held the agreement and amendments were valid and ordered a division of property consistent with the second amendment. Virginia appealed, arguing that the amendments were void and unenforceable as a matter of law. The Court of Appeals held that postnups aren’t authorized in Oklahoma, and “an antenuptial agreement which has [been] amended, modified or superseded postnuptially is no longer an antenuptial agreement.” Instead, the court held an amended prenup is a postnup. The court addressed Boyer and held that it was inconsistent with Oklahoma law. While rescission of a prenup is permissible, a postnup or amendment isn’t. The court held that while the amendment wasn’t enforceable, the original prenup survived.
Postnup Declared Void
In Hoffman v. Dobbins,4 Linda and Leo Hoffman entered an antenuptial agreement in April 2000 and were married in May 2002. In September 2003, they amended their postnup to revoke any provision concerning the death of either or both spouses. Following Leo’s death in 2007, Linda filed a complaint for declaratory judgment by the probate court to find both the postnup and its amendment to be valid and enforceable contracts. Leo’s estate asked the probate court to declare the amendment to be void as contrary to law and against public policy because postnups, with specific limited exceptions, aren’t valid in Ohio. The probate court granted the estate’s motion and declared the amendment void.
Linda appealed, but the Court of Appeals affirmed the probate court’s decision and held that because postnups aren’t valid in Ohio (other than separation agreements), a postnup amendment to a prenup is similarly unenforceable. The court noted that there’s some authority that a prenup can be revoked or rescinded, but stated that this case involved a “partial revocation” by attempted amendment. The prenup as originally executed survived.
The dissent argued that the amendment was permissible because it didn’t seek to deprive either party of any legal or property rights, but instead sought to restore legal rights they had contracted away in the prenup.
Verbal Postnup Invalid
In In re O’Malley,5 Joseph and Jalyn entered into a prenup three days before getting married that addressed their separate property, but they failed to provide how any subsequently acquired property was to be treated. On divorce, the district court found the parties abandoned the prenup and entered a verbal postnup when they agreed that Jalyn would quit her job and become a stay-at-home mom.
In Kansas, prenups may be amended or revoked only by a written agreement signed by both parties. Because the parties’ postnup was verbal, the Court of Appeals held that the oral agreement didn’t revoke the original prenup. However, the Court of Appeals held that the verbal agreement could be considered a valid “separation agreement” (which can be executed orally) but noted that the separation agreement wouldn’t supersede a valid prenup. The court remanded for an analysis of the validity of the prenup and whether the parties entered into a valid oral separation agreement.
Joint Estate Plan Not a Postnup
In Deane v. Morris,6 Christine and Hubert Morris were married for less than a year before Christine died. One month after their marriage, the two spouses executed separate wills, with Hubert leaving a life estate in his residence for Christine in his will and Christine providing nothing for the husband.
After Christine died, Hubert renounced the will and made claims against Christine’s estate. The beneficiaries filed a bill of complaint against Hubert, claiming that the spouses’ separate wills, executed at the same time, were a written contract not to assert an interest in the other’s estate.
The court noted that there was no single document memorializing an agreement between the parties. Under Virginia law, postnups must be in writing and signed by both parties. Here, there was no single document signed by both parties—the court held that the joint estate plan wasn’t a postnup.
Agreement Treated as Prenup
In Flansburg v. Flansburg,7 Sherry and Earl Flansburg entered into a postnup during a reconciliation attempt after initially petitioning for divorce and dismissing the action. Although the postnup was negotiated during the marriage, it concerned the distribution of property interests acquired prior to the marriage. Sherry filed a second petition for divorce two and a half years later.
In Indiana, by statute, courts must enforce prenups as written but have discretion to accept, reject or modify postnups and settlement agreements. The lower court declared the agreement a prenup and ordered the distribution of the spouses’ marital property in accordance with the agreement. The Court of Appeals held that it was “entirely appropriate for the trial court to apply the law of antenuptial contracts to the agreement” because even though it was negotiated “well into” the parties’ marriage, it primarily concerned the distribution of property interests acquired prior to the marriage. The court held that the trial court didn’t err in treating the agreement as a prenup, and it was enforced as written.
The court noted that other jurisdictions recognize the validity of these contracts as “reconciliation agreements” and treat them the same way as prenups.
Special Scrutiny for Postnup
In Hornung v. Hornung,8 Robert and Marjorie Hornung entered into a prenup in 1997, which they amended in July 2008. Robert sought enforcement of the prenup. The trial court considered whether it should analyze the modified agreement as a prenup or a postnup (postnups are treated with special scrutiny). The trial court noted that “where a contract has been substantially modified, it is the entire contract as modified that becomes the operative legal instrument” and held that when there was an intact marriage at the time a prenup is modified, the agreement should be scrutinized as a postnup. The trial court analyzed the agreement as a postnup and held that it was enforceable.
On appeal, Marjorie challenged the enforceability of the agreement because Robert didn’t make proper disclosures when they made the 2008 amendment. Marjorie argued that the agreement should be treated as a postnup and should be subjected to special scrutiny. Robert argued that the amended agreement should be treated as a prenup. The court declined to decide the issue, finding instead that the agreement wouldn’t survive even the less exacting scrutiny required for prenups.
State Specific
As is clear from the above sampling of cases, whether and to what extent a prenup may be amended or modified is a function of the law of the particular state. Likewise, whether a prenup will survive (or be revived) if a subsequent postnup is deemed invalid or otherwise in contravention of the laws of a particular state will be driven by that state’s law. Indeed, one must be wary even when an amendment to a prenup and/or entry into a postnup are squarely permissible under the law of the state where the agreement is entered into. Given the frequency with which individuals move and/or relocate for work or otherwise, it may very well be that the state where they entered into their agreement isn’t the state where the divorce (and ultimately the agreement) will be adjudicated. In such an instance, the state with jurisdiction over the divorce may find a prenup amendment and/or postnup against its public policy.
While unfortunately, there’s no magic answer, consider including a governing law provision to try and buttress any conflicting law in a future jurisdiction that may be considering the extant agreement. If it’s an amendment of a prenup, make sure that the parties comply with the often more fulsome disclosure (and other) obligations required for a postnup and that the amended agreement specifically recites such compliance. If your clients are entering into a postnup when a prenup is already in place, rather than rescinding the prenup in favor of the postnup, consider incorporating, but not merging, the prenup into the postnup and having the terms of the original prenup survive the execution of the postnup. Provide that to the extent that any of the terms of the prenup conflict with the postnup, the postnup shall control. Importantly, if the prenup doesn’t merge, it remains its own independent contract. In the event that the postnup is found invalid or in contravention of the laws of a particular state, at least the prenup will remain in force. There’s obviously much to be considered. Given the foregoing, it’s important for practitioners to contemplate these potential outcomes and counsel their clients accordingly.
As food for further thought, consider the follow scary proposition for estate-planning attorneys: Are joint estate plans disguised postnups?
—The authors acknowledge Ella Cohen, an associate at Aronson Mayefsky & Sloan, LLP and Ruthie Renberg, a summer clerk at Bank Rifkin, for their invaluable assistance in the preparation of this article.
Endnotes
1. Hansen v. Hansen, 924 N.W.2d 873 (Iowa Ct. App. 2018).
2. Boyer v. Boyer, 925 P.2d 82 (Okla. Civ. App. 1996).
3. Hendrick v. Hendrick, 976 P.2d 1071 (Okla. Civ. App. 1998).
4. Hoffman v. Dobbins, 2009-Ohio-5157 (Ct. App.).
5. In re O’Malley, 451 P.3d 490 (Kan. Ct. App. 2019).
6. Deane v. Morris, 24 Va. Cir. 234 (Cir. Ct. 1991).
7. Flansburg v. Flansburg, 581 N.E.2d 430 (Ind. Ct. App. 1991).
8. Hornung v. Hornung, 146 A.3d 912 (Conn. 2016).