Overview:

A valid prenuptial contract must meet the following four general standards:

As a practical matter, Washington Courts apply the same standards to the enforcement of prenuptial contracts as are applied to contracts where the parties intend to obtain a separation or a divorce. All such contracts are governed by the same general principles, namely:

Nutshell:

If the agreement is not unfair, it will be enforced, without getting into the issues of independent counsel, etc.

If the agreement is unfair, then it will be enforced only if:
 

• .1 The party was fully informed of the extent of the property rights, and
• .2 The party received independent legal advice, and entered into the agreement voluntarily.

Too often, lawyers believe that when they are retained to draft an prenuptial contract, they must prepare the document to reflect only the interests of their clients. They do not consider the legitimate concerns of the other party. Highhanded and one-sided drafting is not only offensive, antagonizing the other party and his or her lawyer, but it also needlessly prolongs the negotiation and drafting process. This adds to the costs of legal representation. The corollary to these observations, is that consideration of the other party's legitimate concerns is also essential when commenting on the initial draft prepared by the other party. Lawyers' adversarial training and the adversarial nature of the practice runs counter to helping two people reach a common goal, namely a prenuptial agreement that they can live with for now, and perhaps for ever. This community of interest between two persons intending to enter into an intimate long term personal relationship mandates that both lawyers appreciate and honor the legitimate concerns of each party to the agreement. Rarely can one side either sustain an advantage by overreaching or "slip" anything by the other side's attorney. Invariably, the other attorney will force the terms back into the realm of reasonableness. The lawyer does not compromise the client's interest by drafting a fair prenuptial contract at the beginning of the negotiations.

(Here, pause and reflect upon the various horror stories we have all heard about unfair prenuptial agreements and the resultant costly litigation that followed) Your notes:

- Rights to acquire, own and manage separate property. RCW 26.16.010, and .020.

- Right to acquire, own and manage community property. RCW 26.16.030.

- Statutory conversion of certain property into "quasi-community" property in certain circumstances and disposition of this property on death. RCW 26.16.220, .230, .240 and .250.

- Property distributions and support obligations upon dissolution of marriage, and award of attorneys fees and costs incurred in an action for marital dissolution. RCW 26.09.098, .090 and .140.

- Intestate succession. RCW 11.04.015.

- Right to dispose of interest in community property on death. RCW 11.52.020 and .016 and RCW 11.52.010, and .012.

- Homestead rights and awards in lieu of homestead. RCW 11.52.020 and .016 and RCW 11.52.010, and .012.

- Right to receive spousal allowance during probate administration. RCW 11.52.040.

- Rights of an omitted spouse to take against a will executed prior to the marriage. RCW 11.12.095.

- Right to administer community property during probate. RCW 11.28.030.

- The burden of proof on whether the transaction between spouses was performed in good faith. RCW 26.16.210

The Problem: Gotbucks immediately marries NewWife after emerging from a large assets divorce from ExWife. Gotbucks has continuing obligations under the prior decree. Gotbucks plans new joint business ventures with NewWife. ExWife retains security interests in Gotbucks' ongoing business ventures as well as personal guarantees.

Some suggested drafting solutions:

Usually the parties to an agreement will be seeking to protect the separate status of assets acquired prior to marriage, or to maintain the separate status of assets acquired during marriage. However, some agreements may provide for the characterizing as separate assets properties which would otherwise be community in nature.
 
 

Selected Cases
 

Be aware that where a community property agreement is in any way in conflict with a Will the surviving spouse may disclaim in whole or in part any interest under the community property agreement and take under the Will. RCW 11.86.060; Norris v. Norris, 25 Wn. App. 290, 605 P.2d 1296, affirmed 95 Wn.2d 124, 622 P.2d 616 (1980) and an agreement to rescind a community property agreement must itself be a valid contract. Matter of Fords Estate, 31 Wn. App. 136, 639 P.2d 848 (1982).

In Washington it is not necessary for money consideration to be stated in order to have an enforceable agreement. The issue is one of equity.

The question of equitable distribution of the property, or, the potential for unconscionability as to one of the parties must be recognized. Therefore, if the distribution of assets between separate and community will upon its face appear to be inequitable, the agreement should recite the reasons which the parties considered in making the distribution as they did, and the benefits received by the spouse who appears to be obtaining the less favorable position.

The issue of unconscionability is examined in Friedlander v. Friedlander, 80 Wn.2d 293, 494 P.2d 208 (1972), where the court held that the burden of establishing the fairness of a prenuptial agreement generally rests upon the party asserting the agreement and that where the provision for the wife is disproportionate to the means of the husband, the burden is on the husband to show that the wife had full knowledge of all facts and circumstances that affected the contract, including her property rights waived.

A helpful decision outside this state on the provisions necessary in such agreements is Del Vecchio v. Del Vecchio, 143 S.2d 17 (Florida) (1962).
 

There are numerous factors which will affect the enforceability of the contract. Spousal agreements must be predicated upon disclosure. In Re Marriage of Hadley, 88 Wn.2d 649, 565 P.2d 790 (1977). The spouses may agree to change the status of community property either by agreement to become effective on death (see, RCW 26.16.120), or by gift from one spouse to the other during the lifetime of both. Yiatchos v. Yiatchos, 376 US 306, 84 Sup.Ct. 72, 11 L.Ed.2d 724 (1964), vacating 60 Wn.2d 179, 373 P.2d 125. The gifts are accomplished often by means of agreements and it is because these agreements change the character of property from community to separate or from separate to community, that the courts will scrutinize the circumstances of the gift.

While it may not be necessary for the spouse to have exact information upon the other spouse's holdings ( See McGill v. Hill, 31 Wn. App. 542 (1982)) discretion dictates that more than a simple list of assets and liabilities is called for.

See In Re Relationship of Eggers, 30 Wn. App. 867, 638 P.2d 1267 (1982). See Lindsay v. Lindsay, Wn.2d 299 (1984), as they affect property acquired by the spouse in his/her separate name while living together outside of marriage. Zion Construction Inc. V. Gilmore, 78 Wn. App. 87 (1995)and Connell v. Francisco, 127 Wn.2d 339 (1995). The Connell case is, arguably, in conflict with the more recent decision In re Meretricious Relationship of Sutton and Widner, 85 Wn. App. 487 (March, 1997), wherein the court divided assets acquired during the relationship according to each party's proportion of income.

The parties may define as separate assets not only those which each of them brings into the marriage, and the proceeds or earnings therefrom, but additionally they may define as separate property the earnings of either or both parties during the marriage. Because doing so may result in one of the parties (usually the wife) giving away rights to community assets she would otherwise have, it is important that the document recite the exchange which she is receiving. The document should also recite that each party specifically waives and gives up any claim that he or she might otherwise have made to the separate property of the other, pursuant to Washington community property law. See, Trierweiler Estate, 5 Wn. App. 17, 486 P.2d 314, Pet. Rev. den., 79 Wn.2d 1007, (1971), holding that the value of the wife's labor earned during the marriage is community property and therefore the community has an equitable lien for the value of uncompensated services of the wife rendered in maintenance and operation of the husband's separate business.
 

See RCW 11.86.060 for election of spouse under community property agreements. See also Norris v. Norris, 25, Wn. App. 290, 605 P.2d 1296, aff'd 95 Wn.2d 124, 622 P.2d 816 (1980).

For the most part, we are discussing prenuptial and postnuptial agreements which are entered into between persons who have some substantial separate property which they wish to protect from the new spouse, perhaps in a second marriage where there is an earlier family. However, community property agreements are also used as an adjunct to mutual wills, and are specifically provided for under RCW 11.16.120. Beware that depending upon the language of these community property agreements, which are often very brief, the effect may be to convert separate property to community property in the context of a dissolution of marriage, where the parties had actually intended that they only take effect upon death of one spouse. Consider the difference in effect of these two provisions:
 

The parties may wish to provide for support and custody of children who may be born or adopted during the marriage, and for spousal maintenance, in the event that the marriage ends in dissolution.

Although the spouses may contract for support payments for children of their marriage, it is unlikely such contractual provisions will be enforceable. Because the courts consistently take the position that support is an obligation of both parties, and that the parties may return to court upon a modification of support provisions during the child's minority, should circumstances change, either of the contracting parties could present facts to the court which argue for modification of decrees for maintenance or support. In Re the Marriage of Kaplan, 23 Wn. App. 503, 597 P.2d 439 (1979). The same logic would apply to modifications of spousal support, however, in the case of spousal support, the court would look to the totality of property received by the parties in the agreement, and measure that property against the need for support. The examination would be an inquiry into the equity in the agreement, and the circumstances which may have changed since the agreement was created, much like the inquiry which would be made for modification of maintenance following the entry of a decree of dissolution. See Hansen v. Hansen, 24 Wn. App. 578, 602 P.2d 369 (1979); Johnson v. Johnson, 32 Wn. App. 147, 646 P.2d 152 (1982).

Contractual provisions for the custody of children in the event of later separation of the parents, would likely be dealt with in similar manner to issues of support. That is, the court maintains jurisdiction over the subject matter of custody so long as the children are minors. Contractual arrangements between the parents which recited the reasons for the custody preference designated, would be considered by the court, but would not be binding upon the court. The longer the period of time between the agreement and the custody dispute, the more likely that argument could be presented to the court that circumstances were sufficiently different so as to require the court to take a fresh look at the child's needs. In any event, the measure would always be the best interest of the child.

Provisions for guardianship of unborn children in the event of the death of both parents could be handled in a prenuptial or postnuptial agreement, but would not be binding upon the court. The parents could contract to name a specific guardian in their wills, but whether they did or not, the guardianship of children is always subject to review by the court.

Provisions for children of either party's prior marriage can be dealt with by contract terms which indicate that the parties will create wills leaving their separate property to their individual children. The parties can create insurance trusts for the benefit of those children as well. They could, of course, contract each to assume financial liability for the other's children.

Pursuant to RCW 26.16.205 the obligation for support of step-children ceases upon the termination of the relationship of husband and wife. Therefore, any commitment on the part of the step-parent to continue support for the other spouse's child, following separation, is an extension of the step-parent's legal obligation. See, In Re Marriage of Allen, 28 Wn. App. 637, 626 P.2d 16 (1981).

Parties sometimes choose to include lifestyle agreements in prenuptial or postnuptial agreements. They may speak to issues such as whether they intend to have children or not, whether their arrangements will be for sharing or household responsibilities. While discussion of these issues prior to creating a contract may be beneficial to some marriages, the parties should be clear in their expectations as to enforceability. There are no cases which involve courts in the enforcement of such arrangements between married parties, and any attempt of a court to enforce such agreements as between the parties might well be subject to a constitutional challenge under the theory of the right to marital privacy. Nevertheless, the parties might provide incentives for abiding by the provisions, such as increased vesting of property upon the birth of a child, or matching contributions of separate property to community property based upon proportionate shares of income contributed to the community. Such provisions should be enforceable without any foreseeable problems.

There have been some recent cases concerning the question of contracting to provide specific religious training or education for children, either in the context of nuptial agreements or separation agreements. In the New York case of Perlstein v. Perlstein, the court enforced the prior agreement of the parties regarding religious diet and education of children, 429 N.Y.S. 2d 896 (App. Div. 1980). See also Gruber v. Gruber, 457 N.Y.S. 2d 117 (App. Div. 1982); Spring v. Glawon, 454 N.Y.S. 2d 140 (App. Div. 1982). In another New York case, Avitzur v. Avitzur, 459 N.Y.S. 2d 572 (Court Appeal), cert. denied, 104 S.Ct. 76 (1983) the court enforced one of the divorcing spouse's claim to the right to a religious divorce ceremony.

In addition to disclosure of all assets, the court will look to the question of representation. Both parties should be properly advised. The parties should be represented by independent counsel in the negotiation and drafting process. If one of the parties refuses to obtain separate counsel, the document should recite on its face that the party was advised to obtain separate counsel, understood that the attorney was representing the other party, and chose not to obtain separate counsel. See In Re Marriage of Hadley, 88 Wn.2d 649, 565 P.2d.

The problem of oral agreements.

It may be surprising to most practitioners that oral agreements concerning personal property, at least, can be enforceable. In Merriman v Curl, 8 Wn. App. 990 (19 ), the court quoted from 33 Wash. Law Review 1122, as follows:

This defense often arises where the parties have a written agreement, they have observed it during the marriage but now one spouse wants to avoid its application at the time of the divorce. The case of Arnold v. Melani, 75 Wn.2d 143 (1968) defines the doctrine as follows: