In a first for Mass., SJC approves post-nuptial contracts

The couple had separated but, as part of a reconciliation effort, Kenneth Ansin sought the agreement so that any financial questions between the couple would be settled if the marriage failed. Both sides had their own lawyers negotiate the agreement, which was approved by a Worcester Probate and Family Court judge, the SJC said.

"The gravamen of the wife's complaint is that she will be left with a disproportionately small percentage of the couple's marital assets,'' if the agreement were upheld, Marshall wrote for the court. "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.''

For decades now, couples getting married in Massachusetts had only two options to deal with their assets -- sign a pre-nuptial before their wedding day or wait until the marriage crumbled, and amid the emotional turbulence of divorce, craft a "separation agreement'' detailing property and child custody issues.

Today's SJC ruling creates a new, third path already in use in Alabama, Louisiana and Wisconsin, according to the SJC and attorneys. (Ohio, the court noted in a footnote, has gone in the opposite direction and bans the practice.)

Thomas J. Barbar, co-chair of the Massachusetts Bar Association's Family Law Section, said pre-nuptials are most effective when they involve short-term marriages because they essentially map out what the terms of a divorce are going to be.

Today's SJC's ruling, he said, is likely to see more use in longer-term marriages where couples have enjoyed some financial success after their wedding day, have added pets to their daily lives, or co-own a business where both parties conclude a written agreement will ensure its future success.

Barbar also said that couples who engage in negotiations while their marriage is strong, and their relationship is positive, are more likely to make good decisions – and also save themselves money once, or if, the marriage fails.

"Parties getting divorced are usually not too thrilled with each other. Whether you do a pre-nup, or a post-nup, it's still cheaper than divorce litigation,'' Barbar said. "It can defray the financial and emotional toll. …And you can budget for it, just like a wedding.''

Barbar said he will now be urging clients to settle questions about how money, property and pets are disposed of "now when you are getting along, when you are not angry at each. If you get a divorce, you might not come out with the same agreement.''

In today's ruling, the SJC rejected Craven-Ansin's legal argument that contract talks in the midst of a struggling marriage are inherently coercive, and that they may actually encourage an end to a marriage and should be banned as bad public policy.

"Marital contracts are not the product of classic arm's-length bargaining, but that does not make them necessarily coercive,'' Marshall wrote. "Such contracts may inhibit the dissolution of a marriage, or may protect the interests of third parties such as children from a prior relationship.''

She added that the agreements the SJC approved today will have to be reviewed by probate court judges before they take effect, providing a safety net to anyone who may have made a flawed agreement during a period of emotional distress.

The court laid out a five-step review that judges must conduct before approving the contracts. They include evidence that convinces the judge that both sides agreed to waive their rights under divorce laws.

"A judge should be careful to ensure that the contesting spouse has not been misled in any way by a spouse that at the time seems committed,'' Marshal wrote. "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.''

Marshall concluded by writing that "enforcement of a marital agreement is not contrary to public policy.''

The ruling was unanimous. All seven SJC justices participated in the case.

David H. Lee, the Boston lawyer who represented Kenneth Ansin, said he was pleased that the SJC upheld the contract and finally addressed such agreements. He said he has negotiated fewer than 10 post-nuptial agreements in his 37 years practicing family law in comparison with more than 100 prenuptial agreements.

``There's always been a concern about what the requirements were for them to be considered enforceable,'' he said.

Susan E. Stenger, the Boston appellate lawyer for Craven-Ansin, said she was disappointed the court ruled against her client but pleased that it had adopted a stringent standard for scrutinizing such agreements.

``The big concern here is that one party owns or controls significant assets and threatens to leave the marriage, and the other one says, `Please don't go, I'll sign anything,''' she said. ``That's one of the situations to protect against.''