The law regarding premarital (also known as prenuptial or antenuptial) agreements executed before October 1, 1995, in Connecticut is set forth in depth in the benchmark Connecticut Supreme Court case of McHugh v. McHugh, 181 Conn. 482 (1980), which held if certain conditions are met, prenuptial agreements are no longer unenforceable as against public policy. The McHugh decision created certain prerequisites which must be met before a prenuptial or antenuptial agreement is enforceable.
In discussing the enforceability of prenuptial agreements, the McHugh court stated that prenuptial agreements are generally enforceable where the court finds: (1) the prenuptial agreement was validly entered into; (2) its terms do not violate any Connecticut statute or public policy; and (3) the circumstances of the parties at the time the marriage is dissolved are not so beyond what the parties contemplated at the time the prenuptial agreement was entered into as to cause its enforcement to work injustice.
The Three McHugh Criteria:
The first McHugh criterion focuses on whether the prenuptial agreement in question complies with the ordinary principles of contract law. Specifically, the court looks at the terms of the Agreement and the circumstances surrounding the agreement's execution to see whether the parties were aware of their legal rights and their respective assets and liabilities, and proceeded to alter those rights in a fair and voluntary matter.
The second criterion involves potential violations of public policy such as: (1) a provision which waives the right to defend against a future action; (2) a provision which creates a substantial economic advantage upon dissolution irrespective of fault (i.e., creates an incentive to divorce); or (3) a provision relieving one spouse of the duty to support the other during the marriage.
In discussing the third requirement, the McHugh court found that where a marriage is dissolved not because it has broken down irretrievably, but because of the fault of one of the parties, a prenuptial waiver of rights executed by the innocent party may not be enforceable, depending upon the circumstances of the particular case and the language of the agreement. Similarly, where the economic status of the parties has changed so dramatically between the date of the agreement and the date of dissolution, enforcement of the agreement may work injustice. Absence such unusual circumstances, however, prenuptial agreements freely and fairly entered into will be honored and enforced by the court as written.
The Premarital Agreement Act
On October 1, 1995, the Connecticut Legislative passed the Premarital Agreement Act, which applies to all premarital and antenuptial agreements in the State of Connecticut which are executed after October 1, 1995.
According to the Connecticut Premarital Agreement Act, a premarital agreement or amendment to a premarital agreement shall not be enforceable if the party against whom enforcement is sought proves that: (1) such party did not execute the agreement voluntarily; (2) the agreement was unconscionable when it was executed or when enforcement is sought; (3) before execution of the agreement, such party was not provided a fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party; or (4) such party was not afforded a reasonable opportunity to consult with independent counsel. Courts, in deciding the enforceability of a premarital agreement, will look at the factors of the Premarital Agreement Act as well as the prior caselaw.
Parties to a premarital agreement may contract to many things including:
- The rights an obligations of each of the parties and any of the property of either or both of them whenever acquired or located;
- 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;
- The disposition of property upon separation, marital dissolution, death or the occurrence or non occurrence of any other event;
- The modification or elimination of spousal support;
- The making of a will, trust or other arrangements to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The right of either party as a participant or a participant spouse under a retirement plan;
- The choice of law governing the construction of the agreement; and
- Any other matter, including their personal rights and obligations.
Questions and Answers
In the absence of a prenuptial agreement, what factors will a Connecticut court look at in determining a proper equitable distribution and/or alimony award?
The court will look at various factors including the length of the marriage, the causes for the dissolution of the marriage, the age, health, station occupation, amount and source of income of the parties, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for the future acquisition of capital assets and income. No single factor is preferred over all of the others. However, in making financial determinations, the financial circumstances of both parties are entitled to great weight.
Can parties to a prenuptial agreement choose which state's law will govern their agreement?
Yes. Connecticut provides that the parties are free to choose their own forum except under two circumstances: (1) if the chosen forum had no substantial relationship to the matter; or (2) if the chosen forum was contrary to the fundamental policies and law of Connecticut and Connecticut had a materially greater interest than the chosen forum in determining the controversy. Absent either of these tow circumstances, the parties selected choice of law would govern.
What law governs if parties fail to select a particular state's law to govern their prenuptial agreement?
In the absence of an effective choice of law provision by the parties in a prenuptial agreement, the court will focus on: (a) the place of contracting; (b) the place of negotiation of the contract; (c) the place of performance; (d) location of the subject matter of the contract; and (e) the domicile, residence, nationality, place and incorporation and place of business of the parties.
How does Connecticut law regarding prenuptial agreements compare with New York law?
New York is more lenient than Connecticut in upholding prenuptial agreements. New York prenuptial agreements, like any other contract, are not presumed to fraudulent regardless of their lack of fairness and reasonableness. They may only be set aside upon proof of concealment or imposition of fraud. In Connecticut, on the other hand, prenuptial agreements may be set aside based upon one judge's interpretation of what is fair and equitable.
On what basis could a court find a prenuptial agreement unconscionable?
The execution of a premarital agreement could be unconscionable for various reasons including: (1) minimal or insufficient financial disclosure; (2) the inability to consult with independent counsel; or (3) a finding of duress. At the time of enforcement, the agreement could be found unconscionable where the court finds that the circumstances of the parties at the time of the dissolution are so far beyond the contemplation of the parties at the time the agreement was made as to make enforcement of the agreement work an injustice. Courts have found that the mere doubling of assets amounts unconscionability.
Some Helpful Caselaw
While the general rule is that a prenuptial agreement will be upheld if it is fair between the parties and voluntarily entered into after full financial disclosure and independent legal advice, it will not be enforced if one or more of the standards of McHugh are not met. However, there is not any universal definition of what is considered "unconscionable" with regard to premarital agreements.
The caselaw after McHugh seems to set out various examples and situations whereby a prenuptial agreement, while not deemed "unconscionable" per se, is held invalid and unenforceable due to the parties' financial conditions at the time of enforcement of the prenuptial agreement.
In Brooks v. Brooks, for example FA 950143086 S, 1997 WL 297586 (Conn. Super. May 20, 1997) (Novack, J.), the parties executed a written agreement on December 18, 1987, approximately 30 days prior to their marriage. The agreement was not subject to the provisions of the Connecticut Premarital Agreement as the agreement was executed prior to October 1, 1995.
The court found that the prenuptial agreement was validly entered into and that there was full financial disclosure by both parties. There was no duress claimed by the defendant and the terms of the prenuptial agreement did not offend any statute or public policy of Connecticut. Despite all of this, the court declined to enforce the prenuptial agreement of the parties.
In making its decision, the court focused on the third prong of the McHugh test which dealt with the comparison of the circumstances of the parties at the time of the dissolution with their circumstances at the time the agreement was entered into to determine if the enforcement of the contract would work an injustice.
The parties in Brooks separated seven years after their marriage. During their marriage they lived a lavish lifestyle. This lifestyle resulted partially from the sizable and uncontemplated increase in the plaintiff's assets. At the time of the dissolution the plaintiff's assets were approximately six times what they were at the time of the marriage. The count found that it would be inequitable to restrict the defendant to the parameters set forth in the premarital agreement. Accordingly, the court declined to enforce the prenuptial agreement of the parties.
In Rosenberg v. Rosenberg, FA 98 0356648 S, 1999 WL 717298 (Conn. Super.) (Sept. 2, 1999) (Bassick, J.), the court refused to enforce a prenuptial agreement where it found that it did not meet the third prong of the McHugh test. The court found that the circumstances of the parties at the time of the dissolution were so beyond the contemplation of the parties at the signing of the prenuptial agreement eleven years prior. From the time of the issuing of the prenuptial to the agreement's execution, the defendant's wealth almost doubled from $12.5 million to close to $30 million. The court found that, considering the circumstances of the case to enforce a provision which did not grant any alimony or property, except for $200,000, would work an injustice upon the plaintiff. Accordingly, the court found the agreement to be invalid and refused to enforce it.
Similarly in Christoni v. Christoni, FA 91-0237478 S, 1994 WL 86410 (Conn. Super. Mar. 14, 1994) (Stengel, J.), the court refusedto uphold the parties' agreement concerning property rights. When the parties married in 1980, the plaintiff was 74 years old and the defendant was 51 years of age. The agreement was executed two days before the parties were married. In their agreement the right to be granted alimony was waived, yet plaintiff agreed to pay defendant $5,000 for each year of marriage up to $50,000.
The court found that it was difficult to compare the financial status of the plaintiff at the time of the signing of the agreement to that shown on his current financial affidavit in that the plaintiff did not disclose the value of most of his assets in 1980. Moreover, the court found the assets of the plaintiff had increased dramatically from the date of the agreement to the date of the dissolution. Accordingly, the court held that there was a substantial change of monetary circumstances that was uncontemplated by the parties and invalidated the agreement.
Recently, one superior court judge has defined what she believes to be an unconscionable premarital agreement. In Girard v. Girard, Number FA-950710125, 1998 WL 345541 (Conn. Super. June 16, 1998) (Dranginis, J.), the court found that a prenuptial agreement which eliminated an award of alimony for an undereducated, unskilled mother of three preschool was unconscionable.
What type of financial disclosure should be provided?
The requirement of a fair and reasonable disclosure may be easily satisfied if each party sufficiently in advance of the signing of the premarital agreement, executes a signed and sworn financial affidavit showing the parties' income, assets and liabilities. Each party must be given a reasonable opportunity to receive confirming documentation such as bank statements, brokerage statements, pension and retirement documents, tax returns, etc.
Conclusion
In Connecticut, the courts, in determining the enforceability of a premarital agreement focus on at the three prongs of McHugh and the Premarital Agreement Act.
Assuming there is complete financial disclosure and the prenuptial agreement does not violate any statue or public policy, the court's main focus will be comparing the circumstances of the parties at the time of the execution with the parties' financial condition at the time of the divorce. This factor has generated the most significant amount of controversy. Accordingly, as prenuptial agreements are not ironclad, it is important to see an experienced attorney to discuss your various options if you are considering entering into such a contract.
