On a recent episode of the popular TV drama “Grey’s Anatomy,” the character “Catherine” confronts “April” her new on-screen daughter-in-law. Catherine is furious over her son and April’s surprise wedding. Believing that her son made an awful mistake, Catherine thrusts a document in front of April commenting that it is fortunate that postnuptial agreements were designed “for moments like this.”
Heidi Klum and Seal reportedly had a postnuptial agreement encompassing property distribution in the event of a divorce. However, one does not have to be rich or famous to contemplate a postnup. Indeed, the Daily Beast reports that postnuptial agreements are growing in popularity among all income brackets and continue to gain mainstream acceptance.
Postnuptial and prenuptial agreements are similar in that a couple is attempting to bring certainty to their future financial situation. The key difference is that prenuptial agreements are made before marriage while postnuptial agreements are entered into after marriage.
While a variety of agreements have been referred to as being postnuptial contracts, postnups are increasingly geared toward settling the disposition of marital property upon a separation or divorce. It is in this regard that the postnup is a relatively new phenomenon.
Postnuptial agreements have traditionally been regarded with suspicion by the courts thereby making them somewhat more difficult to enforce than prenuptial agreements. According to an American Bar Association newsletter, a postnuptial agreement is harder to enforce than a prenup “because once married, a couple has a fiduciary duty to care for one another in all ways.” Therefore, while courts have tended to assume that a prenuptial agreement is valid, they often have the opposite reaction to a postnuptial agreement.
Postnuptial agreements in Oregon
Oregon has a specific statutory scheme governing prenuptial agreements. In stark contrast there are no similar Oregon statutes governing postnuptial agreements.
The 2005 Oregon Supreme Court decision of In re Marriage of Grossmaninvolved a postnuptial agreement. In its discussion, the court made it abundantly clear that it would not treat postnuptial agreements as if they were prenuptial agreements. The court observed that the Uniform Premarital Agreement Act adopted by the legislature specifically provides that prenups that meet statutory requirements are enforceable. By contrast, the legislature has not adopted a similar statutory scheme governing postnuptial agreements. Grossman gives every indication that postnuptial agreements will be subject to a greater degree of scrutiny than prenuptial agreements.
The Oregon courts have previously enforced certain types of postnuptial agreements. However, given that there is no statutory framework governing postnuptial agreements in Oregon, great caution should be exercised when executing a postnup that undertakes financial planning in anticipation of a divorce. Without any doubt, to be enforceable, a postnup would need to be fair and the parties should make a full, honest and frank disclosure of their financial situation to each other. Keep in mind that, assuming there is no enforceable prenuptial agreement, Oregon law requires that marital distribution occur in a manner that is “just and proper in all circumstances.”
Drafting a prenuptial agreement that is enforceable in Oregon
If you think that a postnuptial agreement might bring some certainty to your financial situation following a divorce, you should contact an attorney skilled in handling family law matters. Given the lack of statutory guidance for postnuptial agreements in Oregon, it is highly advisable that an attorney who is skilled in financial planning assist you in determining how to best protect your assets following a divorce.