The Uniform Premarital and Marital Agreements Act

Part One of this article described the genesis of the uniform acts ' UPMAA and UPAA ' and compared New York law with the Acts. Part Two reviewed other differences between New York law and the UPMAA and UPAA. The third and final part herein discusses variations in the acts.

Variation in 'Uniform' Laws

The previous sections of this article (Part One: http://bit.ly/1HxcK4D; Part Two: http://bit.ly/1QjqAyW) and the chart'below reflect the UPAA and UPMAA as drafted by the ULC. That a state is listed on the ULC website as having adopted the UPAA or that the state has a chapter of its statutes entitled “uniform premarital agreement act,” however, does not mean the state's statutes actually repeat the UPAA. So far, adopting the UPMAA has not meant adopting all of its major provisions either. Practitioners cannot, therefore, rely on any two states' statutes to be “uniform” without reviewing those statutes. They must review case law as well, because that case law may introduce variation even where the statutory text is uniform.

Amberlynn Curry's comment, “The Uniform Premarital Agreement Act and Its Variations Throughout the States,” 23 J Am. Acad. Matrimonial Law. 355 (2010), available at http://bit.ly/1GOU5qs, provides an invaluable summary of variations among UPAA states as of 2010. This article offers a few more examples.

Florida

Florida has adopted the UPAA, but to make an effective premarital agreement in Florida may require formalities that the UPAA does not. Florida Statutes Annotated, ' 61.079(4)(a)3 follows the UPAA: “Parties to a premarital agreement may contract with respect to ' [t]he disposition of property upon ' death.” Also as the UPAA provides, a premarital agreement need only be written and signed. Section 61.079(3). The Florida UPAA adds, however, a subdivision stating that it “does not alter the ' required formalities of ' agreements between spouses under s. 732.701 or s. 732.702,” which are part of the Probate Code. And under those statutes, a waiver of elective share by a Florida resident is valid only if “signed by the waiving party in the presence of two subscribing witnesses.”
' 732.702(1). Thus, under Florida law, a premarital agreement signed without witnesses might be effective to set spousal support and equitable distribution, but ineffective to waive each spouse's elective share of the other spouse's estate.

Nevada

As another example, Nevada has adopted the UPAA, but has changed the standard language to make it easier to challenge a premarital agreement, and Nevada case law makes it easier still. Nevada allows a party to avoid enforcement of a premarital agreement by proving either that the agreement was unconscionable when executed or that he or she received insufficient financial disclosure. Nev. Rev. Stat. Ann. ' 123A.080 subd. 1(a), (c). As discussed above, the UPAA as drafted would require a challenging party to prove both those points. Nevada's UPAA does include the ULC's provision allowing a party to “voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.” Subd. 1(c)(2).

Nevada's doctrine of fraud puts additional requirements on prenuptial agreements. The parties, as fianc'es, owe fiduciary duties to each other. If the premarital agreement would leave one party with no resources or support, and that party would have received something absent the agreement (which is likely in any marriage), then the premarital agreement is presumed to be fraudulent. To overcome that presumption, the spouse upholding the agreement must show that the disadvantaged spouse had ample opportunity to consult an attorney, was not coerced, possessed substantial business acumen, and understood the other party's financial resources and the rights being forfeited under the agreement. Fick v. Fick, 109 Nev. 458, 463, 851 P.2d 445, 449 (1993); Sogg v. Nev. State Bank, 108 Nev. 308, 312, (1992). Note that a waiver of further financial disclosure precludes challenges under the UPAA, but not challenges for fraud. Given these factors, if a premarital agreement may be evaluated under Nevada law, the monied party will have to offer fuller financial disclosure and perhaps a more generous settlement than in other UPAA states.

North Dakota

In the three years since the UPMAA was promulgated, similar variations have arisen. North Dakota's version, N.D. Cent. Code ” 14-03.2-01 to -11, incorporates several small changes from the “uniform” text. Most dramatically, ' 14-03.2-04 provides that legal and equitable principles may not be used to supplement or materially alter an agreement signed in conformity with the UPMAA. That entirely reverses UPMAA ' 5.

The version of the UPMAA that Colorado adopted differs even more dramatically from the ULC's. For a detailed review, see Susan L. Boothby and Kim Willoughby, “Colorado's New Uniform Premarital and Marital Agreements Act,” 43 Colo. Law . 57 (March 2014), available at http://bit.ly/1MgmdiX. Colorado. Rev. Stat. ' 14-2-309(4) omits the provision that allows parties to waive further financial disclosure. Section 14-2-309(5) compresses and rewrites the UPMAA's provisions on unconscionability. It forbids the enforcement of a provision on maintenance or attorneys' fees that is unconscionable at the time of judgment. Colorado's UPMAA has, therefore, no provision for deeming a waiver of equitable distribution unconscionable and no provision for deciding unconscionability based on conditions at the time of signing. Perhaps Colorado courts will use generally applicable legal and equitable doctrines to fill those gaps, as UPMAA ' 5 invites them to do.

Concluding Thoughts

A truly uniform law regarding when matrimonial agreements are binding would offer tremendous relief, not only to practitioners, but also to parties. Because of the actions of state legislators and state courts, however, the Uniform Premarital Agreement Act did not achieve nationwide uniformity. The new Uniform Premarital and Marital Agreements Act does not even seek uniformity; even if state legislatures adopt it without change (which is not happening so far), the UPMAA will invite state courts to continue crafting doctrines of unconscionability, fraud, overreaching, and so on that make it unclear whether any particular agreement is enforceable.

Those developments may, however, be for the best. As the drafters of the UPMAA have admitted, the UPAA was criticized for leaning too much toward enforcement of agreements at the expense of vulnerable parties. Many of the changes made to the UPAA by courts and legislators in Nevada and elsewhere seek to shift the balance back toward more searching judicial review. The UPMAA makes only small steps to address those concerns. In particular, allowing one party to waive one disclosure about the other party's finances allows parties to bind themselves to one-sided agreements without realizing it. Plain-language notices to unrepresented parties might resolve that problem. The notices that suffice under the UPMAA, however, are so vague as to give parties no sense of whether they are giving up rights, much less what their rights might be in the absence of an agreement. The protection of vulnerable parties, therefore, will depend on the legislators who can amend the UPMAA and the judges who can interpret or narrow it. They must weigh those interests against the values of uniformity and predictability.

[IMGCAP(1)]

Matthew A. Feigin is an attorney at Katsky Korins LLP. The author would like to thank Marcy L. Wachtel for her review and Michael A. Mosberg for encouraging him to research the UPMAA.

Part One of this article described the genesis of the uniform acts ' UPMAA and UPAA ' and compared New York law with the Acts. Part Two reviewed other differences between New York law and the UPMAA and UPAA. The third and final part herein discusses variations in the acts.

Variation in 'Uniform' Laws

The previous sections of this article (Part One: http://bit.ly/1HxcK4D; Part Two: http://bit.ly/1QjqAyW) and the chart'below reflect the UPAA and UPMAA as drafted by the ULC. That a state is listed on the ULC website as having adopted the UPAA or that the state has a chapter of its statutes entitled “uniform premarital agreement act,” however, does not mean the state's statutes actually repeat the UPAA. So far, adopting the UPMAA has not meant adopting all of its major provisions either. Practitioners cannot, therefore, rely on any two states' statutes to be “uniform” without reviewing those statutes. They must review case law as well, because that case law may introduce variation even where the statutory text is uniform.

Amberlynn Curry's comment, “The Uniform Premarital Agreement Act and Its Variations Throughout the States,” 23 J Am. Acad. Matrimonial Law. 355 (2010), available at http://bit.ly/1GOU5qs, provides an invaluable summary of variations among UPAA states as of 2010. This article offers a few more examples.

Florida

Florida has adopted the UPAA, but to make an effective premarital agreement in Florida may require formalities that the UPAA does not. Florida Statutes Annotated, ' 61.079(4)(a)3 follows the UPAA: “Parties to a premarital agreement may contract with respect to ' [t]he disposition of property upon ' death.” Also as the UPAA provides, a premarital agreement need only be written and signed. Section 61.079(3). The Florida UPAA adds, however, a subdivision stating that it “does not alter the ' required formalities of ' agreements between spouses under s. 732.701 or s. 732.702,” which are part of the Probate Code. And under those statutes, a waiver of elective share by a Florida resident is valid only if “signed by the waiving party in the presence of two subscribing witnesses.”
' 732.702(1). Thus, under Florida law, a premarital agreement signed without witnesses might be effective to set spousal support and equitable distribution, but ineffective to waive each spouse's elective share of the other spouse's estate.

Nevada

As another example, Nevada has adopted the UPAA, but has changed the standard language to make it easier to challenge a premarital agreement, and Nevada case law makes it easier still. Nevada allows a party to avoid enforcement of a premarital agreement by proving either that the agreement was unconscionable when executed or that he or she received insufficient financial disclosure. Nev. Rev. Stat. Ann. ' 123A.080 subd. 1(a), (c). As discussed above, the UPAA as drafted would require a challenging party to prove both those points. Nevada's UPAA does include the ULC's provision allowing a party to “voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.” Subd. 1(c)(2).

Nevada's doctrine of fraud puts additional requirements on prenuptial agreements. The parties, as fianc'es, owe fiduciary duties to each other. If the premarital agreement would leave one party with no resources or support, and that party would have received something absent the agreement (which is likely in any marriage), then the premarital agreement is presumed to be fraudulent. To overcome that presumption, the spouse upholding the agreement must show that the disadvantaged spouse had ample opportunity to consult an attorney, was not coerced, possessed substantial business acumen, and understood the other party's financial resources and the rights being forfeited under the agreement. Fick v. Fick , 109 Nev. 458, 463, 851 P.2d 445, 449 (1993); Sogg v. Nev. State Bank , 108 Nev. 308, 312, (1992). Note that a waiver of further financial disclosure precludes challenges under the UPAA, but not challenges for fraud. Given these factors, if a premarital agreement may be evaluated under Nevada law, the monied party will have to offer fuller financial disclosure and perhaps a more generous settlement than in other UPAA states.

North Dakota

In the three years since the UPMAA was promulgated, similar variations have arisen. North Dakota's version, N.D. Cent. Code ” 14-03.2-01 to -11, incorporates several small changes from the “uniform” text. Most dramatically, ' 14-03.2-04 provides that legal and equitable principles may not be used to supplement or materially alter an agreement signed in conformity with the UPMAA. That entirely reverses UPMAA ' 5.

The version of the UPMAA that Colorado adopted differs even more dramatically from the ULC's. For a detailed review, see Susan L. Boothby and Kim Willoughby, “Colorado's New Uniform Premarital and Marital Agreements Act,” 43 Colo. Law . 57 (March 2014), available at http://bit.ly/1MgmdiX. Colorado. Rev. Stat. ' 14-2-309(4) omits the provision that allows parties to waive further financial disclosure. Section 14-2-309(5) compresses and rewrites the UPMAA's provisions on unconscionability. It forbids the enforcement of a provision on maintenance or attorneys' fees that is unconscionable at the time of judgment. Colorado's UPMAA has, therefore, no provision for deeming a waiver of equitable distribution unconscionable and no provision for deciding unconscionability based on conditions at the time of signing. Perhaps Colorado courts will use generally applicable legal and equitable doctrines to fill those gaps, as UPMAA ' 5 invites them to do.

Concluding Thoughts

A truly uniform law regarding when matrimonial agreements are binding would offer tremendous relief, not only to practitioners, but also to parties. Because of the actions of state legislators and state courts, however, the Uniform Premarital Agreement Act did not achieve nationwide uniformity. The new Uniform Premarital and Marital Agreements Act does not even seek uniformity; even if state legislatures adopt it without change (which is not happening so far), the UPMAA will invite state courts to continue crafting doctrines of unconscionability, fraud, overreaching, and so on that make it unclear whether any particular agreement is enforceable.

Those developments may, however, be for the best. As the drafters of the UPMAA have admitted, the UPAA was criticized for leaning too much toward enforcement of agreements at the expense of vulnerable parties. Many of the changes made to the UPAA by courts and legislators in Nevada and elsewhere seek to shift the balance back toward more searching judicial review. The UPMAA makes only small steps to address those concerns. In particular, allowing one party to waive one disclosure about the other party's finances allows parties to bind themselves to one-sided agreements without realizing it. Plain-language notices to unrepresented parties might resolve that problem. The notices that suffice under the UPMAA, however, are so vague as to give parties no sense of whether they are giving up rights, much less what their rights might be in the absence of an agreement. The protection of vulnerable parties, therefore, will depend on the legislators who can amend the UPMAA and the judges who can interpret or narrow it. They must weigh those interests against the values of uniformity and predictability.

[IMGCAP(1)]

Matthew A. Feigin is an attorney at Katsky Korins LLP. The author would like to thank Marcy L. Wachtel for her review and Michael A. Mosberg for encouraging him to research the UPMAA.