Prenuptial agreements allow couples to decide in advance how they want assets, debts, and rights to be divided if a divorce occurs or when one of them dies. When a prenuptial agreement is developed properly, couples will exchange full financial disclosures, discuss how they see their financial futures, and consult with separate attorneys. But for all the planning that goes into a prenuptial agreement, one thing is for certain: couples have little control over how the future will unfold. This is why keeping prenuptial agreements updated is as important as creating one in the first place. Note: when a prenuptial agreement is updated during marriage, it might be referred to as an amended prenuptial agreement or a marital agreement. This article will use the term “marital agreement” for consistency.

Why a Couple May Want to Amend a Prenuptial Agreement

There are countless reasons for amending a prenuptial agreement. Here are just some of the situations where a couple would be advised to reassess their prenuptial agreement.

There has been an unexpected change in circumstances

Prenuptial agreements are akin to insurance policies that couples take out to try and ensure the stability of their future, even when they do not plan to end their marriage. Over time, things will change and evolve in their lives. For instance, one spouse might have an idea for a business, and it turns out to be very successful. When this couple originally wrote their prenuptial agreement, they agreed that the hard work of one spouse should stay with that spouse. Now that this business is successful, it would be wise to amend the prenuptial agreement to reflect the business’s success and the couple’s desire to keep it aligned to its creator. Similarly, unanticipated accrual of debt may need to be revisited. Events such as long-term illness or deciding to pursue secondary education can create debt that was not envisioned in the prenuptial agreement.

The couple decides to buy a major asset

Prenuptial agreements are often written in terms of property that spouses own prior to marriage or that they acquire in their own right during the marriage. For instance, spouses could agree that they each keep their own retirement accounts. But what happens if years into the marriage, both spouses decide to buy an asset together? It could be a simple condo or a large estate in the country. If the joint asset is important, the couple should consider amending their prenuptial agreement to include it.

The couple relocates or needs to cure a defect in the prenuptial agreement

The jurisdiction where a prenuptial agreement is executed is important. The laws of the state where the prenuptial agreement is signed will dictate its enforcement. It is always wise to revisit a prenuptial agreement when a couple moves out-of-state. Likewise, if a defect is found after signing the prenuptial agreement, the couple should amend the prenuptial agreement to cure the defect. For instance, if one spouse overlooked an asset on their financial form, it is best to fix it so that enforceability is not jeopardized.

The couple has a child

One big life change is deciding to have children. If children were not originally part of the prenuptial agreement and the couple does have children, it is wise to amend the prenuptial agreement. For instance, if one spouse decides to become a stay-at-home parent, the distribution of assets in the original prenuptial agreement may look unbalanced or not reflect the couple’s new goals. Additionally, having children will bring expenses, including college, and the couple ought to decide how best to address that in an amended prenuptial agreement. Since prenuptial agreements often have an estate component, it is important to revisit how that portion is structured in the prenuptial agreement when children are involved. It is important to note that determining child support is generally outside the purview of a prenuptial agreement and instead will be decided by the court in the event of a divorce.

The dynamics of the relationship have changed

Even the strongest relationship can be tested over time. Given all the changes that can happen in life, it is understandable if spouses start to feel disconnected. If the relationship is tested under the weight of infidelity, for example, amending the prenuptial agreement may reaffirm the couple’s commitment to each other and provide assurances.

Different Jurisdictional Approaches to Marital Agreements

The laws related to amending a prenuptial agreement vary by state, but most states require at least two things: the agreement must be in writing, and it must be signed by the parties. Most states have drafted legislation or developed case law related to prenuptial agreements. Let’s review the different approaches taken by a sample of states.

The Uniform Premarital Agreement Act

The Uniform Premarital Agreement Act (UPAA) offered early uniformity on how a prenuptial agreement can be amended.¹ In relation to prenuptial amendments, UPAA offers this guidance: “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.”² California is one state that adopted the UPAA language in 1985.³

Marital agreements are enforced differently than prenuptial agreements in California.⁴ The court in In re Marriage of Bonds ruled that spouses share a fiduciary relationship, which means an advantaged spouse in a marital agreement case has the burden to show he or she did not exercise undue influence. Whereas, a spouse challenging a prenuptial agreement has the burden to show it was not entered into voluntarily.⁵ California case law also provides that an agreement between spouses with fair terms at the time of execution may still be enforced even if subsequent events favor one spouse more.⁶

The Uniform Premarital and Marital Agreements Act

The Uniform Law Commission updated UPAA in 2012 with the Uniform Premarital and Marital Agreements Act (UPMAA). The changes bring more attention to marital agreements. The UPMAA defines “marital agreement” as

An agreement between spouses who intend to remain married which affirms, modifies, or waives a marital right or obligation during the marriage or at separation, marital dissolution, death of one of the spouses, or the occurrence or nonoccurrence of any other event. The term includes an amendment, signed after the spouses marry, of a premarital agreement or marital agreement.⁷

The UPMAA treats pre-and postnuptial agreements to the same standards. In particular, the UPMAA also retains similar requirements for the formation: “A premarital agreement or marital agreement must be in a record and signed by both parties. The agreement is enforceable without consideration.”⁸ Colorado adopted the UPMAA in 2014.⁹

In re Marriage of Lafaye demonstrates the importance of timing in marital agreements in Colorado. The wife in Lafaye commenced an action for divorce in March 1995.¹⁰ While the action was still pending, the couple began to negotiate a marital agreement. The parties and the husband’s attorney signed the agreement in early November 1996 (against the advice of the wife’s counsel). By late November 1996, it was clear that reconciliation would not be successful. The wife’s attorney signed the marital agreement in early December and learned that the divorce case was still pending. At that time, both parties successfully filed to dismiss their divorce. The wife filed for divorce a second time. The court declined to enforce the marital agreement in the second divorce proceeding because it was clear the marital agreement was signed while a divorce proceeding was still pending. The court recognized the public policy of “seek[ing] to safeguard the interests of a spouse involved in the emotionally stressful circumstances of a dissolution action.”¹¹

Individual State Law

Some states have not adopted either UPAA or UPMAA. One such state is Massachusetts, which does not have a statute that governs amendment of prenuptial agreements or marital agreements. Instead, case law provides criteria for determining the enforceability of marital agreements in Ansin v. Craven-Ansin.¹² The court in Ansin noted marital agreements are treated differently from prenuptial agreements and separation agreements. When a couple signs a prenuptial agreement, they have the freedom to walk away from the marriage if they are unsatisfied with the prenuptial terms. On the other end of the spectrum, separation agreements occur when the couple has already reached the point of ending the relationship. In the middle lies marital agreements, which are negotiated during marriage, ostensibly when there is no intent to divorce. The court in Ansin expressed a legitimate concern that one spouse could use the marital agreement negotiation process to exert leverage by bargaining over the dissolution of their marriage. As a result, the court identified five criteria for enforcing a marital agreement:

• Each party had an opportunity to have separate legal counsel;
• There was no fraud or coercion present;
• The spouses participated in full financial disclosure;
• Both spouses knowingly and explicitly agreed in writing to waive the right to judicial division of assets and rights; and
• The terms of the agreement were fair and reasonable at the time of signing the agreement.¹³

The Benefits of Reviewing a Prenup Annually

Annual checkups are always a good thing, whether for your finances, your physical health, or even your vehicle. You might put your retirement savings on autopilot, but it is good fiscal sense to check your asset allocation once in a while to make sure you are reaching your goals. And reviewing your insurance needs every so often is also a good practice. After all, you do not want to be in the position of filing a claim only to discover a gap in coverage. The same logic applies to a prenuptial agreement.

First, updating a prenuptial agreement annually will help address any changes that emerged throughout the year. Buying your dream home with your spouse is a joyous time, not a time when you want to worry about updating financial documents. Scheduling an annual review of your prenuptial agreement will allow you to focus your energy on this type of preventative action.

Second, conducting an annual review of your prenuptial agreement with your spouse may help strengthen its enforceability. Financial transparency and fairness are two important concepts for prenuptial agreement enforcement. Meeting with your spouse annually to review your prenuptial agreement will allow you the chance to stay up-to-date on each other’s financial situation. It demonstrates to the court (if you ever need to go to court) that you have both shared updated information and you both still affirm that the prenuptial agreement meets your needs, with or without an amendment.

Last, one of the best things about a prenuptial agreement is that it can start your marriage off on the right foot. Prenuptial agreements provide the right environment for couples to communicate openly and honestly. In addition to disclosing financial information, you can share your goals for the future, spell out what values you share, and practice collaborating. Doing an annual review of your prenuptial agreement can reinforce that foundational work.

Conclusion

Prenuptial agreements are a fantastic financial tool that couples can use to help shape their futures. But we cannot avoid change. Change, such as having a child or moving out of state, can affect a prenuptial agreement. It is good practice to amend a prenuptial agreement, either by modifying the existing agreement or creating a marital agreement, when a major change occurs.

We have reviewed how several states deal with enforcing amendments to prenuptial agreements or marital agreements. The guidance shows that there are some universal requirements. For instance, most jurisdictions require an amendment to a prenuptial agreement or a marital agreement to be in writing and signed by each party. But we have also seen how this area of law can vary across states.

Keep in mind there are details lurking in individual facts and circumstances, which can affect enforceability. Given the importance that a prenuptial agreement plays in each spouse’s financial planning, it is wise to update the agreement annually. Spouses should also consult with independent legal counsel if there are any questions related to enforceability.

Endnotes:

1. Unif. Premarital Agreement Act § 5 (Nat’l Conference of Comm’rs on Unif. State Laws 1983).

2. Id.

3. Cal. Fam. Code § 1614.

4. In re Marriage of Bonds, 5 P.3d 815, 830 (Cal. 2000).

5. Id.

6. In re Marriage of Friedman, 122 Cal. Rptr.2d 412 (Cal. Ct. App. 2002).

7. Uniform Premarital and Marital Agreements Act § 2(2) (Nat’l Conference of Comm’rs on Unif. State Laws 2012).

8. Id. at § 6.

9. C.R.S. § 14-2-302.

10. In re Lafaye, 89 P.3d 455 (Colo. App. 2003).

11. In re Lafaye at 458.

12. Ansin v. Craven-Ansin, 929 N.E.2d 955 (Mass. 2010).

13. Id. at 963-968.