Understanding Prenups in Massachusetts

A prenuptial agreement, frequently referred to as just a prenup, is also known as a premarital agreement or antenuptial agreement. There is no uncle-nuptial agreement that I’m aware of.  Sorry, sometimes dad jokes sneak into my blog posts. 

However you refer to it – and you have plenty of options as you see from above – a prenup is a legal document that outlines how assets, debts, and other financial matters will be handled in the event a marriage is terminated. There may be some clauses concerning what happens to property upon the death of one spouse, but typically that is best handled through your estate plan. 

While not everyone needs a prenup, certain circumstances make having a prenup particularly beneficial. Are there reasons NOT to have a prenup?  There are more reasons that support having a prenup than not having one, but some people do not like the idea of starting their almost-married lives together by working with two lawyers and engaging in the transactional aspects of negotiating and drafting a legal document, especially one that exists to deal with divorce.  So, during the romantic times and the excitement of selecting a wedding venue, planning a honeymoon, and tasting cakes, you must switch gears and think about the “Big D.”  “I love you forever my darling!  Oh, but just in case I don’t, please review this document from my lawyer.”  So, there’s that.

Some people think having a prenuptial agreement must mean that at least one person thinks that the marriage will not survive the test of time.  Perhaps it is better to remember that divorce can be expensive, so if there is a way to reduce those costs while avoiding acrimonious litigation, then it seems like a sensible approach.

If the process is handled in a respectful and fair way, then having a prenuptial agreement can save headaches and financial expenses later in the event your marriage ends in divorce, as many do.  One approach that is gaining (albeit slowly) some traction here in Massachusetts is working jointly with an experienced neutral mediator to develop the goals and terms of the prenup.  It is best to locate a mediator that is well-versed in the financial issues surrounding divorce and family finances. I’m biased towards mediators that are also attorneys, and not only because I am one, but because a prenup is a legal document and involves the potential for some complicated and nuanced legal issues. Working with a lawyer-mediator should help lead to the high-quality agreement, while keeping the process cooperative instead of adversarial.   A non-attorney mediator is unable to draft legal documents.

If you decide to mediate your Massachusetts prenuptial agreement, it is of critical importance that both parties still obtain separate legal counsel to review the draft prenup and the required financial schedules for each person. Without independent legal advice, your prenuptial is much less likely to be considered valid by a Massachusetts Probate & Family Court judge if you need it enforced.

It is worth noting that the most important standard for prenups in Massachusetts is that the agreement must be fair and reasonable at the time the document is signed, and fair and reasonable (not unconscionable) at the time of divorce. Here are some other standards to be familiar with if considering a prenup in Massachusetts:

1. Voluntary Agreement

• Both parties must enter into the agreement voluntarily.
• Coercion, undue influence, or fraud will likely cause a prenup to be invalid. 

2. Full Financial Disclosure

• Both parties must fully disclose their assets, liabilities, income, and financial expectations before signing, such as whether there is a likelihood of an inheritance, especially a significant one. 
• Incomplete or inaccurate financial disclosures can also invalidate the agreement.

3. Independent Legal Representation for Each Person

• It is strongly advised that each party has independent legal counsel to avoid claims of unfairness or lack of understanding.
• Courts may view agreements more skeptically if one or both parties did not have legal representation.

4. Timing

• The prenup should be executed well before the wedding to avoid claims of coercion or pressure. Last-minute agreements can be viewed as suspect by courts. Thus, don’t present you soon to be spouse with a prenup at the rehearsal dinner!

5. Execution Requirements

• Prenups must be in writing, not surprisingly.
• Both parties must sign it.
• Best practice is that the agreement is notarized. 

6. Consistent with Public Policy

• Provisions in the agreement must not violate public policy or other relevant Massachusetts laws, such as attempting to waive child support or custody rights.

7. Court Review

• Courts have the final say when enforcing prenups if parties cannot agree about the enforceability of the document. 

How Much Does a Prenup Cost?

As you might expect, fees for prenuptial agreements can vary considerably depending on the complexity of the document and the amount of back and forth between attorneys to negotiate the details.  Mediating a premarital agreement limits the amount of involvement by lawyers, and there is less back and forth since the parties work together with the neutral mediator to develop the terms.  

The level of financial complexity typically impacts the fee.  When there are sizeable assets, especially if there are businesses or multiple parcels of real estate, it understandably takes additional time to gather that information and accurate fair market values, and then work out the terms.  I completed some prenups on a flat fee basis when the situation was less complicated. Fees for a situation like this could be under $5,000.00. Other prenuptial agreements might be lengthy, very detailed documents involving many hours of negotiation, with higher fees to reflect the work involved. While I’m a fan of flat fees, hourly billing is most common with prenups in Massachusetts as legal professionals are not able to always accurately predict how much negotiation may be necessary. 

In a future blog post, I will discuss specific circumstances that might – or should – cause you to obtain a prenup.