Exams Are Three Questions, 90 Minutes, the Same Format As the IL Bar Exam

-Exams are three questions, 90 minutes, the same format as the IL Bar exam.

·  Up until the 1970s prenups were rejected as being against public policy

Fletcher v Fletcher (Supreme Court of Ohio, 1994)

628 NE2d 1343

Facts: Dyane and Kenneth signed a prenuptial and then got married. 7 years later Kenneth filed for divorce and enforcement of the prenup. Dyane argued that the prenup was obtained by fraud and duress and was therefore invalid. While Kenneth argued that he and Dyane discussed the contents of the agreement Dyane said that there were no discussions and she did not read it before signing it. The attorney who drafted the agreement said that Dyane appeared to have read the agreement and he did generally discuss the terms of the agreement at the signing. Dyane was informed by the attorney that she could have legal counsel at this meeting but she declined. Dyane testified that the attorney told her that any property accumulated before the marriage would be divided, however the attorney denies this.

Procedural History: Trail court upheld the prenup. The court of appeals affirmed except to the part of the judgment that denied spousal support which it reversed and remanded for a determination of support

Law: Prenups enforceable when (1) entered into freely without fraud, coercion, duress, or overreaching, (2) full disclosure or full understanding of the nature, value, and extent of the prospective spouse’s property, and (3) the terms do not promote or encourage divorce or profiteering by divorce.

Precedent: Juhasz: the spouse asserting the validity of the contract bears the burden to show that it was executed after full disclosure of the nature, value, and extent of the proponent’s property or that there was full knowledge thereof. (Burden shifting) Justified by the fiduciary relationship of the parties and the fact that antenuptial agreements negate that presumptive rights of a spouse to an equitable distribution of marital assets upon divorce.

When a nuptial agreement provides disproportionately less that then party challenging it would have received under an equitable distribution, the burden is on the one claiming the validity of the contract to show that the other party entered into it with the benefit of full knowledge or disclosure. The burden of proving fraud, duress, coercion, or overreaching remains with the party challenging the agreement.

Gross: Overreaching is when one party outwits or cheats the other by artifice or cunning, or by exploiting significant disparity in understanding the nature of the transaction. “Parties must act in good faith with a high degree of fairness and disclosure of all circumstances which materially bear on the antenuptial agreement.

Holding: Affirmed the Court of Appeals decision upholding the nuptial agreement and remanding the issue of spousal support for determination of support.

1. While the agreement does not specifically mention divorce the evidence is sufficient to conclude that the parties intended the agreement to apply to divorce. 2. Dyane argues that she didn’t know what she was signing, but she admitted that she refused legal counsel and that the attorney explained to her what was included in the agreement. 3. Overreaching: The agreement was presented to Dyane the day before the wedding which could support coercion, but research revealed that it is common practice to present such agreements 11 hours before the wedding ceremony. Additionally: An agreement signed without counsel is not per se invalid, and mere regret at an unwise decision does not establish duress, coercion, fraud, or overreaching

Dissent: The holding does not address whether there was actually fraud duress or coercion. To freely sign the agreement a party must appreciate the rights he or she is forfeiting and must nonetheless agree to give up those rights. Any ambiguities should be construed against the drafter. A reading of the document doesn’t say it applies to divorce. Failure to mention the word divorce in the document makes it seem that the non-drafter signing the document wasn’t thinking about the exact circumstances and rights being forfeited when the document was signed. Increased value of the stock gained during marriage should be Dyane’s as well

·  Test for enforceable prenuptial agreement (1) entered into freely without fraud, coercion, duress, or overreaching, (2) full disclosure or full understanding of the nature, value, and extent of the prospective spouse’s property, and (3) the terms do not promote or encourage divorce or profiteering by divorce, and (4) meaningful opportunity to consult legal counsel

·  Statute of Frauds applies to all prenuptial agreements require promises made in consideration of marriage, other than promises to marry, to be in writing and signed by the party to be charged.

·  If there is a disproportionate allocation of property in the agreement, the burden of proving full disclosure shifts to the party seeking to uphold the contract, but that the burden proving fraud, duress or coercion remains with the party attacking the agreement

Fiduciary relationship- this is important because there is more trust/disclosure required between both parties at a higher level. It is generally accepted that engagement creates a fiduciary relationship but that’s not to say you can’t still have a prenup. However

Simeone v Simeone (SC of PA, 1990)

581 A.2d 162

Facts: 23 year old nurse (Catherine) marries 39 year old surgeon (Fred) with a $90k/ year income and $300k in assets. Fred gives the papers to Catherine the night before the wedding. Catherine signed without any counsel and without being advised by Fred’s attorney of any legal rights surrendered by the agreement. Contested whether Catherine knew the agreement was coming which she denies. Catherine says it is void because she signed under adverse circumstances.

Procedural History: A masters report upheld the validity of the prenuptial agreement and denied the claim. Exceptions to the masters report were dismissed by the court of common pleas and thi was upheld by the Superior Court

Issue: around the interpretation of Geyer. Catherine argues that Geyer was misinterpreted insofar as it requires disclosure of statutory rights only in cases where there has not been made a reasonable provision for the spouse. Catherine claims inadequate disclosure and that the payments she got wee less than reasonable (totaling only $25k as a cut off point)

Holding: Prenuptial agreement enforces and affirmed. Absent fraud, misinterpretation, or duress spouses should be bound by the terms of their contract. The terms of the present prenuptial agreement must be regarded as binding without regard to whether the terms were fully understood by the appellant. The reasonableness of a prenuptial bargain is not a proper subject for judicial review.

If parties viewed an agreement as reasonable at the time of its inception, as evidence by their having signed the agreement, they should be foreclosed from later trying to evade its terms by asserting that it was not in fact reasonable. The present agreement contained a clause reciting that”each of the parties considers this agreement fair, just and reasonable.

However, a full and fair disclosure of the financial positions of the parties is requires. Absent this a material representation in the inducement for entering into the prenup may be asserted. The present agreement recited that full disclosure had been made.

Additionally, the evidence revealed that Catherine knew about the prenup agreement prior to its presentation to her as they had spoken about it on previous occasions. Catherine was neither hesitant or reluctant to sign the agreement.

·  This case provides a strict analysis of prenuptial interpretation. Prenups should be evaluated ljust lik a contract.

Pendent lite- while the case is pending

Belio v Bellio (2003)

CA Court of Appeal, 105 Cal.App.4th

Issue: Wife contends that the trial court erroneously refused to enforce a premarital agreement requiring husband to pay her $100,000 upon divorce

Facts: Wife was getting spousal support from her ex-husband, but would lose this upon divorce. Subsequently the wife wanted a premarital agreement that explained if the marriage terminates due to divorce or death of her husband she will get $100k either from his or his estate. Both parties signed the agreement and each was represented by independent counsel.

Procedural History: Trial court found the provision unenforceable because it encouraged the wide to seek a dissolution of her marriage and therefore violated public police. The trial court did find that the amount was reasonable to the circumstances but found that its main purposes and objectives were to insulate the wife from any potential financial burden or hardship. The court said that the law would be ok but for the policy considerations.

Holding: The $100,000 payment provision did not threaten the marriage relationship. The provision was the product of realistic planning that takes into account the possibility of dissolution. The purposes of the payment provision was to ensure that if the husband died of the marriage was dissolved, the wife would be no worse off than she would have been if she remained single. Such a provision cannot reasonably be construed as threatening to induce the destruction of a marriage that might otherwise endure.

·  Alimony/ maintenance/ spousal support- ends when the person receiving the support remarries

In IL whatever you accumulate before the marriage you get, but accumulations during marriage are marital assets

If no will involved your spouse generally gets half of your estate

People who get prenups

-rich

-divorced before

-people with children

750 ILCS 10/1 Illinois Uniform Premarital Agreement Act

·  Statute of frauds is included under section 3. The agreement must be in writing

·  Section 4-3 says you can explain the rights and obligations upon death or divorce

·  Section 10/4-4 Spousal support.

o  Caveat: 10/7(b) (b) If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement undue hardship in light of circumstances not reasonably foreseeable at the time of the execution of the agreement, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such hardship.

o  This means that reasonably unforeseeable circumstances

·  10/7 is the most important section: The party who is trying to attack the prenuptial agreement must prove that the agreement was not entered into voluntarily. Can also show that it was unconscionable at the time it was executed

750 ILCS 10/1 Illinois Uniform Premarital Agreement Act 1990

·  Prior to this act the common law was applied

§ 1. This Article shall be known and may be cited as the Illinois Uniform Premarital Agreement Act.

§ 2. Definitions. As used in this Article:

(1) "Premarital agreement" means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.

(2) "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.

§ 3. Formalities. A premarital agreement must be in writing and signed by both parties. It is enforceable without consideration.

§ 4. Content. (a) Parties to a premarital agreement may contract with respect to:

(1) the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;

(2) the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;

(3) the disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;

(4) the modification or elimination of spousal support;

(5) the making of a will, trust, or other arrangement to carry out the provisions of the agreement;

(6) the ownership rights in and disposition of the death benefit from a life insurance policy;

(7) the choice of law governing the construction of the agreement; and

(8) any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

(b) The right of a child to support may not be adversely affected by a premarital agreement.

§ 5. Effect of marriage. A premarital agreement becomes effective upon marriage.

§ 6. Amendment, revocation. After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties. The amended agreement or the revocation is enforceable without consideration.

§ 7. Enforcement.

(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:

(1) that party did not execute the agreement voluntarily; or

(2) the agreement was unconscionable when it was executed and, before execution of the agreement, that party:

(i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;

(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and

(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

(b) If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement undue hardship in light of circumstances not reasonably foreseeable at the time of the execution of the agreement, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such hardship.

(c) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.

§ 8. Enforcement: void marriage. If a marriage is determined to be void, an agreement that would otherwise have been a premarital agreement is enforceable only to the extent necessary to avoid an inequitable result.

§ 9. Limitation of actions. Any statute of limitations applicable to an action asserting a claim for relief under a premarital agreement is tolled during the marriage of the parties to the agreement. However, equitable defenses limiting the time for enforcement, including laches and estoppel, are available to either party.

§ 10. Application and construction. This Act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this Act among states enacting it.