Did not make a Prenuptial Agreement, Are Postnuptial Agreements allowed?

I am often asked whether a couple that never got around to executing an antenuptial (or prenuptial) agreement before they got married can execute a postnuptial agreement after the marriage ceremony. The answer varies greatly from state to state, and it is important to get an answer from an advisor familiar with the laws of the state in which the couple is residing.

Does Ohio Allow  Postnuptial AgreementS?

In Ohio, the answer is clearly “no”. This goes back to the concept in Ohio that a husband and wife have a duty to support each other. In furtherance of this notion, Ohio statutory law specifically states that a husband and wife cannot alter their legal relations with each other by contract. Two exceptions to this law exist. Ohio Revised Code section 3103.06 states that postnuptial agreements (separation agreement) are valid when spouses agree to a separation in contemplation of a legal separation, divorce or dissolution and make provisions for the support of either of them and their children during such separation.

The second exception was created by the courts. The Ohio Supreme Court held in the case of In re Weber’s Estate, that a written agreement, executed after marriage by a husband and wife, which recites that it was made for the purpose of setting forth in writing an oral antenuptial agreement between the parties and also recites the terms thereof and affirmatively shows that it is a memorandum of such oral antenuptial agreement, constitutes a sufficient memorandum or note of such agreement to comply with the statute of frauds and is not a contract between husband and wife to “alter their legal relations” as prohibited by law.

A few decades ago, a postnuptial agreement was widely considered to be invalid throughout the United States. However, of the fifty states plus the District of Columbia, 32 currently recognize postnuptial agreements, 16 have no clear policy and Ohio is one of only 3 that does not recognize such agreements. This change in attitude was brought about by the increase in divorce rates and the introduction of no-fault divorces. Our neighboring states of Indiana and Kentucky currently honor such agreements.

Don’t rely on the exception of after the marriage memorializing in writing an oral antenuptial agreement. That plan is fraught with potential problems and is very risky! If it’s your desire to have a valid and enforceable prenuptial agreement, take the steps necessary and plan ahead and get one properly drawn up with the help of an attorney experienced with antenuptial agreements!

If you are interested in the writer of this article on Postnuptial Agreements or if you would like to contact the writer to learn more, please click on the link located in this sentence.

I was saddened to learn that George Webley, the host of the weeknight program on BBC London 94.9, died on May 7, 2011, at age 53. BBC London 94.9 Editor David Robey said, “Big George lived up to his name in every sense, a larger than life character with a radio personality to match. He was a truly distinctive broadcaster who will be terribly missed by his many devoted listeners and his colleagues.” He also had a long career as a musician and composed TV theme tunes, including “Have I Got News For You.”

I personally had the pleasure to appear as his guest on his show in July of 2009. As an American divorce lawyer, I was asked to share my perspective about the use of prenuptial agreements in the United States in light of a recent ruling that legalized their use in England. It was truly a fun experience for me to chat with “Big George.” His sense of humor was wickedly funny and his charisma apparent! Here is a link to  the video of a late-night vigil after his death near the BBC studios, led by over 300 London taxi drivers who saw “Big George” as one of their own. http://www.bbc.co.uk/news/uk-england-london-13359641

George’s colleague, Ian Wood, a broadcast journalist with BBC London 94.9, with whom I have maintained contact, shared with me this sad news. He said, “A big part of his show’s success is the people on it, and that includes you, Chip – so please feel free to raise a glass to a man whose show of which you were a part.” Very thoughtful!

I wrote about that “radio adventure” in a post on July 8, 2009. Click here to read that article. It also includes an audio link to my interview. I would encourage you to take a listen. It is very upbeat and funny!

I luckily managed to catch several more of his shows after my interview.  So George, here is my toast to you…Thanks for creating such a wonderful memory in my life. You will be missed in my home and by millions around the globe. May God bless you!

In a recent analysis of census data, the Pew Research Center found that the institution of marriage has undergone significant changes in recent decades as women have outpaced men in education and earnings growth. The study examined American’s 30 to 44 years old, a stage of life when typical adults have completed their education, have gone to work and gotten married. “Men now are increasingly likely to marry wives with more education and income than they have, and the reverse is true for women,” said Paul Fucito, spokesman for the Pew Center. “In recent decades, with the rise of well-paid working wives, the economic gains of marriage have been a greater benefit for men.” Clearly, these unequal gains have been accompanied by gender role reversals in both the spousal characteristics and the economic benefits of marriage.

I personally enjoy reviewing statistics. For those that don’t, be sure at least to read my conclusion at the end of this piece, especially if you are a woman contemplating entering into a marriage.
Here are some of the significant findings in the study, clearly demonstrating the new economics of today’s marriage:

• In 1970, 28% of wives had husbands who were better educated than they were, outnumbering the 20% whose husbands had less education. By 2007, these patterns had reversed: 19% of wives had husbands with more education, versus 28% whose husbands had less education.
• Only 4% of husbands had wives who brought home more income than they did in 1970, a figure that rose to 22% in 2007.
• The national economic downturn has hurt employment of men more than that of women. The income gap has grown even more in the latest recession, when men held about three in four of the jobs that were lost. Women are moving toward a new milestone in which they constitute half of all the employed. Their share increased from 46.5% in December 2007 to 47.4% in December 2009.
• Women now are the majority of college graduates. Their earnings grew 44% from 1970 to 2007, compared with 6% growth for men. That sharper growth has enabled women to narrow, but not close, the earnings gap with men. Median earnings of full-year female workers in 2007 were 71% of earnings of comparable men, compared with 52% in 1970.
• Unmarried men’s household incomes fared worse than those of women. Unmarried women in 2007 had higher household incomes than their 1970 counterparts at each level of education. But unmarried men without any post-secondary education lost ground because their real earnings decreased, and they did not have a wife’s wages to buffer that decline. Unmarried men who did not complete high school or who had only a high school diploma had lower household incomes in 2007 than their 1970 counterparts did.
• There is an important exception to the rule that married adults have fared better than unmarried adults from 1970 to 2007. Married women without a high school diploma did not make the same gains as more educated women: Their household incomes slipped 2% from 1970 to 2007, while those of their unmarried counterparts grew 9%. The stagnant incomes of married women without high school diplomas reflect the poor job prospects of less educated men in their pool of marriage partners. These less-educated married women now are far less likely, than in the past, to have a spouse who works — 77% did in 2007, compared with 92% in 1970.
• Among college-educated adults, married men are markedly more likely to have a wife who is college educated — only 37% did in 1970, compared with 71% in 2007. College-educated married women, though, are somewhat less likely to have a college-educated husband — 70% did in 1970 and 64% did in 2007.
• Americans are more likely than in the past to cohabit, divorce, marry late in life or not marry at all. There has been a marked decline in the share of Americans who are currently married. Among U.S.-born 30- to 44-year-olds, 60% were married in 2007, compared with 84% in 1970.

To read the full study, which includes many more findings along with excellent graphs and charts, click here.

CONCLUSION:

In my practice, I am seeing these “gender reversal” situations almost every day. It is not at all uncommon for divorced women to be ordered to pay spousal support to their ex-husbands. Also, men’s previous reluctance years ago to “accept” spousal support has seemed to have changed as well. I don’t hear, “I am a man and I don’t need any woman to support me”, like I once did. Yes, perhaps it is a good time for a reprise of Bob Dylan’s “The Times They are a-Changin”!

Another trend is that more women contemplating marriage are recognizing the benefits and importance of obtaining a well-written prenuptial agreement before they “tie-the-knot”. As many men had been doing for decades, we now see these successful women trying to protect themselves and their assets in the event of a subsequent divorce.

To learn more about Prenuptial Agreements, click here. I had the pleasure of being interviewed by “Big George” on BBC London radio in July 2009, to discuss the use of Prenuptial Agreements in America. It was lots of fun! Click here if you want to check that out!

I am also in the process of writing a follow-up article indicating how the local statistics in the Dayton area support the results of this Pew Research Center study. Keep an eye out for it!

England is trying to catch up with Ohio and the rest of the United States when it comes to Family Law.  Until a landmark case last week, the courts in England and Wales put little, if any, weight on the terms of prenuptial agreements.  Prenuptial agreements (also called antenuptial agreements) in one form or another have been around for a very long time.  The Supreme Court of Ohio in 1984 held in Gross v. Gross that, under certain circumstances, they are valid and the terms should be enforced by Ohio courts.

On July 2, 2009, I received an interesting phone call from a journalist from the BBC in London, England.  He wanted to know if I would be interested in commenting on the recent case holding and also sharing some insights about prenuptial agreements from the perspective of an American family law attorney.  I read the decision in the case of Radmacher v. Granatino and agreed to be interviewed a few hours later by “Big George” Wembly, the host of the live ‘Late Show’ on BBC-London radio station 94.9.

After a little research, I learned that “Big George” is an iconic broadcaster in London having had an extensive music career as a composer, producer and bandleader.  His radio show is promoted as being unlike any other radio phone-in show heard anywhere on the planet.  True to billing, I learned as I was being interviewed, how engaging and witty “Big George” is.  For any who are interested, I have attached a link to my nine-plus minute interview here. (MP3 Format, 3.9megs)

I think I did pretty well answering his questions about prenuptial agreements from A to Z until he threw me a curve ball about the custody of Michael Jackson’s children.  Not being current on the most recent MJ drama, I had to acknowledge I couldn’t share an informed opinion on that subject!  Oh well . . .

It was, however, an enjoyable experience.  A very different format from other interviews I have given in the past with National Public Radio, newspapers, and other media outlets.  Talking and listening to “Big George” reminded me of my all time favorite radio host as a kid:  Jean Shepherd, a writer and broadcast humorist also on late night.  Lying in bed at night intrigued by Shep’s storytelling and humor often made me tired for school the next morning.  Probably much the same situation for the flocks of listeners no doubt mesmerized by “Big George” in London since he broadcasts weeknights from 10PM to 2AM!  Perhaps I will get another call from him again if he is looking for some legal commentary from an American perspective.  Thanks for the fun “Big George!”

If you are interested in more information on prenuptial agreements in Ohio, please click here to read an article previously written by my partner, Joe Balmer, for our Ohio Family Law Blog.  If you want to read the Radmacher v. Granatino case, click here.

Aaron Hill is a third year student at the University of Dayton School of Law, externing at Holzfaster, Cecil, McKnight & Mues.

Have you discussed with your significant other how the household finances will be managed? This is an often overlooked question that newlyweds fail to discuss. Among other reasons, “money problems” are cited as one of the leading reasons for divorce. It is, therefore, paramount for couples to share a similar outlook on money matters before they get married.

Communication and Compromise are the Key

Communication and compromise are the keys to any successful relationship. Couples who discuss what their financial goals and responsibilities are before they get married are starting their marriage on the right foot. It is crucial for the couples to sit down and communicate both long and short term goals. Short term goals include who is going to be responsible for paying the bills, handling the investments, or whether to establish joint banking accounts. Long term goals can include having children and how many, when to retire, and what kind of lifestyle to lead. When couples communicate these long and short term goals, their relationship is much more likely to succeed. When couples do not see eye-to-eye on any of these goals, reaching a compromise can help alleviate tension caused by these financial decisions.

Is Money the Culprit?

Money is one of the most common cited reasons for divorce. However, it can be argued that it really masks deeper flaws in a marriage. Money can cause a great deal of friction in a relationship. These frictions include not having enough money to spending too much of it. It boils down to managing what money you have. However, these frictions can often be traced back to deeper problems in a relationship. According to Olivia Mellan, a therapist who specializes in helping people with money problems, “It’s always what the money represents: dependency, control, freedom, security, pleasure, self-worth…” Often when financial arguments erupt between couples, they end up being fueled by problems other than money. Those problems can be a lack of trust, a need for control, an inability to compromise, or a lack of communication. If these larger problems can be identified, then they will be less likely to manifest themselves through the facade of “financial problems”.

Consider a Prenuptial Agreement

There are two major stereotypes that surround the idea of a prenuptial agreement. The first is that they are only for the rich and the famous. The second is that they are cold, mechanical devices that are based on the presumption of your marriage becoming a failure. The reality is that most young couples getting ready to get married do not need to bother with a prenuptial agreement, because they bring little to no assets to the marriage. However, prenuptial agreements are also not reserved only for the Hollywood stars. If you expect an inheritance, have a trust fund, or own a business, it can be important to protect those assets if your marriage ends in divorce. Also, if you are entering into a second marriage, you can ensure that your children of the first marriage will not lose their inheritance to a divorce. Although no one likes to marry and plan for divorce, prenuptial agreements can prevent a messy divorce, as well as save time and money.

Even though money is a popular reason for divorce, it can be prevented by communication and compromise. Make a financial plan before the marriage. It can lead to a happier and healthier marriage. A link to an article on this subject is at MSN Money Matters, written by Liz Pulliam Weston, including more from therapist Mellan can be found by clicking here.

Antenuptial agreements, also often referred to as prenuptial agreements, are sometimes derided as taking the romance out of marriage and transforming the event and institution into a business arrangement. Some claim that the use of an antenuptial agreement is an acknowledgement that a marriage is likely to fail. However, an antenuptial agreement addresses not only the possibility of divorce, but also the distribution of premarital assets upon the death of one of the spouses. These agreements can be an excellent tool when there is a significant difference in the ages of the parties or in their respective wealth. In situations in which one or both of the parties has/have previously been married and want(s) to preserve assets for his or her children upon death, an antenuptial agreement may be an essential component of a sound estate plan.

There are several basic elements of a valid antenuptial agreement. The agreement must be entered into in writing and signed by both parties in contemplation of an upcoming marriage. Both participants must be competent and must freely and voluntarily enter into the agreement without coercion or duress by the other party or anyone else. Both parties must be fully aware of all the assets and liabilities of the other party. Finally, the agreement must not be so one-sided as to be unconscionable and unfair on its face. Each party should have their own separate counsel to advise and review the document. There must be a meaningful opportunity for each party to consult with their respective attorney. It is unethical for one attorney to represent both parties.

An antenuptial agreement must contain a full and complete disclosure of both parties’ assets prior to their marriage. With respect to real property, this is the amount of equity owned in the property. Equity is determined by subtracting the mortgage indebtedness associated with the property from the fair market value of the residential property. All other assets must be disclosed, including the values of stocks, securities, bonds, bank, brokerage, retirement, pension and 401(k) accounts. Anticipated inheritances should also be included. An antenuptial agreement also often lists the premarital debts each party brings to the marriage. Just listing a total sum of money as being disclosure of all assets is insufficient under Ohio law. The more detail and specificity included in the agreement, the better. The antenuptial agreement will also address the distribution of assets and assumption of debts upon termination of the marriage or death of a party.

One of the two events addressed in an antenuptial agreement is a termination of the marriage during life, either through divorce, dissolution, legal separation or annulment. The antenuptial agreement sets forth the ownership rights of assets as well as the responsibility for payment of liabilities acquired before marriage should the marriage be terminated. An antenuptial agreement also often addresses the issue of spousal support (alimony), and whether spousal support is waived or whether the parties have already agreed to an amount and duration of spousal support if the marriage is terminated. Child support and custody matters cannot be included. However, the parties can address how “finances” will be handled during the marriage.

The other event addressed in an antenuptial agreement is the death of either spouse. This can be vital when creating an estate plan. An individual who brings significant assets into a marriage and who also has children from a prior marriage may want to protect those premarital or separate assets to pass down to his or her children. However, under Ohio law, a surviving spouse has certain statutory rights to prevent him or her from being disinherited. Under Ohio law, a surviving spouse has the right to the first $40,000.00 of the deceased spouse’s estate. The surviving spouse also has the right to live in the residence for one year rent-free and ownership of up to two of the spouse’s vehicles. The surviving spouse may purchase the residence at its appraised value. The surviving spouse may also “take against the will”. If the deceased spouse has one or more children from a prior marriage, the surviving spouse, in addition to the rights stated above, can elect to receive one-half of the net estate if there is one child and one-third of the net estate if there is more than one child. In an antenuptial agreement, a party may legally waive all of these rights and elect to receive only so much that the deceased spouse chooses to leave him or her by will, trust or other instrument. Thus, a party with significant premarital assets may preserve the right to pass those assets upon death in such manner and to such individuals as he or she chooses, free from the control of the surviving spouse. One caveat is that many employer funded retirement accounts require a spouse to specifically waive his or her rights as surviving spouse to those accounts after he or she has actually become husband or wife. Thus, it is common in antenuptial agreements for both parties to agree to execute any and all documents necessary, after the marriage ceremony, to waive his or her rights as surviving spouse to those retirement benefits.

Questions are routinely asked about the validity of postnuptial agreements in Ohio. Unlike most states, postnuptial agreements are not valid in the State of Ohio. Additionally, Ohio refuses to enforce postnuptial agreements written in other states if the couple is currently domiciled in Ohio. An Ohio a statute makes it clear that a husband and wife may not enter into a contract between themselves to divide assets, debts and responsibilities arising out of the marriage unless they are contemplating a divorce, dissolution or legal separation.

In summary, although the concept of an antenuptial agreement, when thought of solely in context of divorce, may have a negative connotation for some, when thought of in context of death, particularly with a second or subsequent marriage, is often just one of several components of a smart, thorough and comprehensive estate plan. The document must be prepared and executed prior to the marriage to be valid. Plan ahead. Remember that this document needs to be properly drafted to withstand subsequent scrutiny! These documents have been set aside if they are presented too close to the actual wedding date. Court’s have presumed coercion in such cases, recognizing the embarrassment attendant with the “sign it” or the wedding is off approach. Contact an experienced estate planning or family law attorney to properly address these complex issues.