Prenuptial Agreements and Alimony Waivers

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Alimony was drastically limited by a prenuptial agreement in a case between Susan and Joseph DeMatteo decided by the Massachusetts Supreme Judicial Court in 2002. Joseph, who had more than 108 million dollars at the time of the marriage, ended up paying about $35,000 a year, exactly as outlined in the prenuptial agreement.

In December 2004 the Massachusetts Appeals Court came up with a dramatically different result in Donna M. Austin vs. Craig B. Austin. Under the terms of the Austins' prenuptial agreement, Donna waived alimony. Craig had slightly under one million dollars at the time of the marriage and after being married for over 12 years, he ended up paying Donna $56,000 a year in alimony, in spite of the waiver of alimony in the prenuptial agreement. When Donna filed for divorce in 2001, she asked the trial court to set aside the alimony waiver. The trial judge ruled in her favor. Craig appealed and lost. (See also way around a prenuptial agreement).

The Austin court quoted the DeMatteo case: "In the context of assessing the validity of an antenuptial agreement, the provisions for alimony need not approximate an award made pursuant to factors set forth in [the Massachusetts alimony statute], applicable upon divorce... Rather, the test is whether an agreement 'essentially strips the contesting spouse of substantially all of her marital interests (emphasis added).'"

The following chart compares factors recited in the DeMatteo and Austin cases:

FACTORS DEMATTEO AUSTIN
Age of wife at time of marriage 41 37
Age of husband at time of marriage 47 35
Length of marriage 10 years 12.5 years
Number of marriage for wife Second Second
Number of marriage for husband First Second
Wife's children from former marriage One One
Husband's children from former marriage None None
Children of marriage Two One
Wife's income before marriage $25,000 Unspecified, but low
Husband's income before marriage Unknown Unknown
Husband's net worth before marriage $108 to $133 million Just under $1 million
Wife's net worth before marriage Low Low
Wife's work experience after marriage Minimal Minimal
Custody of unemancipated children Wife Wife
Prenuptial Agreement Alimony to Wife $35,000 per year for life (as adjusted for inflation between 1990-98) plus health insurance None
Independent Counsel Yes Yes
Full Financial Disclosure Yes Yes
Enforcement of Prenuptial Agreement All provisions enforced by court Property provisions enforced by court, Alimony provisions overturned
Yearly alimony after litigation $35,000 per prenuptial agreement $52,000 per court order
Yearly child support Unknown $26,000 per court order

Bottom Line: Craig Austin, who owned substantially fewer assets than Joseph DeMatteo, paid significantly more alimony, possibly because his prenuptial agreement gave no alimony to Donna in the event of a divorce and presumably a small amount of property. In contrast, Joseph DeMatteo gave his wife Susan a small amount of support, a house without a mortgage, health insurance and the car she had at the time of the divorce, and thus immunized his prenuptial agreement from judicial destruction. As one observer noted, Susan DeMatteo got a bone, so Joseph DeMatteo could keep the meat. Donna Austin got nothing, so Craig Austin had to share everything.


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