Prenuptial (Antenuptial) Agreements in Minnesota

Prenuptial Agreements Overview

Marriage, among other things, is a financial union. Like any financial union, it is important to define your rights in that relationship and to protect your financial interests. That is the role that a prenuptial agreement plays.

A prenuptial agreement is a contract between two people who are about to marry that spells out how assets will be distributed in the event of divorce or death. It is imperative that each individual have a skilled attorney involved in the process since a poorly conceived and/or drafted prenuptial agreement may not only fail to protect your assets, but result in their loss. An excellent example is the case of New York Giants pro football player Michael Strahan.

In January of 2007, Michael Strahan was ordered by a court to pay his ex-wife $15.3 million -- more than half his net worth -- in keeping with the couple's prenuptial agreement. Under the agreement, Jean Strahan was entitled to 50 percent of their joint marital assets and 20 percent of his yearly income from each year they were married. Apparently, Michael failed to set aside any proceeds pursuant to the premarital agreement during the marriage. That was a product of poor advice. The court did not adopt the NFL star's argument that he wasn't responsible for the 20 percent because his wife failed to ask for it every year. The end result is a financial disaster that could have been avoided. Make no mistake, however, a prenuptial agreement is not just for the ultra wealthy. It is an accepted financially planning tool at all levels to help define property interests and reduce litigation costs should a divorce occur.

Minnesota Prenuptial Agreements

In Minnesota a premarital agreement may also be called an antenuptial agreement. The terms are synonymous. Minnesota prenuptial or antenuptial agreements refer to a contract between two persons planning to marry which governs the rights and liabilities of the parties if they should happen to get divorced or in the event one spouse dies. In short, a prenuptial agreement determines the rights of parties to property, responsibility for debt and may even determine whether spousal maintenance (alimony) is paid.

Why Prenuptial Agreements are Prudent

A premarital agreement acts as a safeguard for both you and your spouse-to-be. It protects your assets and may prevent expensive and acrimonious litigation if a divorce should occur by defining the rights and responsibilities of the parties in advance. With today's divorce rate hovering around 50%,a prenuptial agreement may be one of the most prudent decisions in your life. This is particularly true for business owners who may wish to preserve what they have worked so hard to build.

Minnesota Law Prenuptial Agreements

Prenuptial agreements governing property settlements upon dissolution are valid in Minnesota. Englund v. Englund, 286 Minn. 227, 230, 175 N.W.2d 461, 463 (1970); Hill v. Hill, 356 N.W.2d 49, 53 (Minn.Ct.App.1984), pet. for rev. denied, (Feb. 19, 1985). The current requirements for a valid antenuptial agreement are contained in Minn. Stat. § 519.11 (1984). Antenuptial agreements are enforceable if they are procedurally and substantively fair. McKee-Johnson v. Johnson, 444 N.W.2d 259, 265 (Minn.1989); Kremer. V. Kremer, 912 N.W.2d 617 (Minn. 2018). An antenuptial agreement is procedurally fair if:

• there is a full and fair disclosure of the earnings and property of each party, and

• the parties have had an opportunity to consult with legal counsel of their own choice. Minn.Stat.§ 519.11, subd. 1 (2016).

The agreement must also be:

• in writing;

• executed in the presence of two witnesses; and

• acknowledged by the parties before a person authorized to administer an oath. Minn. Stat.§ 519.11, subd. 2 (2016).

In most cases prenuptial agreements are upheld. It is only in cases where there was not full disclosure or the agreement becomes substantively unfair at the time of the divorce that Court's strike down the validity of such agreements. An agreement may deemed substantively unfair if the circumstances on which the agreement was based have changed so drastically that enforcement would not comport with the reasonable expectations of the parties at inception.

Amendments or Revocations of Prenuptial Agreement

An antenuptial contract or settlement may only be amended or revoked after the marriage of the parties by a valid postnuptial contract or settlement which complies with the same rules as execution of postnuptial agreement.

Prenuptial Agreements & Spousal Maintenance

Courts most often find antenuptial agreements substantively unfair with regard to provisions seeking to limit or eliminate spousal maintenance (alimony) payments. Minnesota Courts have ruled that there is sound public policy rationale for not strictly enforcing such a provisions which, even though entered into in good faith and reasonable at the time of execution, may have become unreasonable or unconscionable as to its application to the spouse upon divorce. The Courts are essentially attempting to prevent ex spouses from becoming wards of the state. If one spouse's health and employability have greatly deteriorated during a marriage, Courts may be reluctant to enforce the maintenance provisions of an antenuptial agreement. Some cases that have been decided:

• Invalidated an antenuptial agreement which sought to preclude spousal maintenance where the lesser earning spouse contracted a venereal disease from the husband resulting in medical expenses;

• Invalidating an antenuptial agreement which sought to preclude spousal maintenance where the marriage was long term (more than 20 years) and the wife had been out of the work force for some time and suffered from an emotional disability. The trial court concluded that unforeseen circumstances invalidated the antenuptial agreement by rendering it unconscionable.

Given the complexities of prenuptial agreements and the changing legal environment in which they are viewed and enforced, you should always consult with an attorney about your prenuptial agreement well in advance of your planned marriage.

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