The Supreme Judicial Court of Massachusetts ruled recently that agreements between spouses who plan to continue their marriage but wish to define their legal rights and obligations in the event of divorce are enforceable in that state. Some states (notably Ohio) do not permit spouses to execute agreements waiving their marital rights unless they are actually pursuing divorce, and the law of many states is unsettled. In its recent decision, the highest court of Massachusetts joined the ranks of states (including Pennsylvania) where such “post-nuptial” agreements are permissible.

Post-nuptial agreements may combine certain elements of prenuptial agreements with features of marital settlement agreements. Post-nuptial agreements may divide marital property between spouses, protect their separate property, and establish or restrict spousal support and alimony, like settlement agreements. Post-nuptial agreements can also protect family businesses, inheritance, and other separate property to be acquired in the future, just as prenuptial agreements do.

In Ansin v. Ansin-Cravin, 457 Mass. 283, 929 N.E.2d 955 (2010), the husband and wife entered into a post-nuptial agreement two years before their eventual divorce. The post-nuptial agreement in that case gave the parties a chance to attempt marital reconciliation while removing the financial risk of taking “one last chance”. The couple had been married for nineteen years at the time of their agreement. At that point, the husband separated from his wife and advised her that he would not return unless she would sign an agreement. She hired legal counsel, investigated the nature and value of their assets, and negotiated the terms of the agreement.

Having signed the agreement, the husband and wife reconciled for nearly two years. Ultimately the reconciliation did not last, but the parties were able to avoid the stress and expense of protracted divorce litigation by having an agreement in place (at least, they would have avoid those pitfalls if the wife had not challenged the validity of the agreement). The Massachusetts court applied the same standards to post-nuptial agreements as many states employ when judging the validity of prenuptial agreements and settlement agreements: (1) availability of independent legal counsel; (2) full and fair disclosure of financial resources; (3) absence of fraud or duress; and (4) reasonableness of the provisions for each spouse.

Pennsylvania has long recognized post-nuptial agreements, and for good reason. When entering into a post-nuptial agreement, full and fair disclosure is an essential element; and it may be important to engage legal counsel. While formbooks and software programs may contain “boilerplate” prenuptial agreements, post-nuptial agreements are very different and require the skill of an experienced family law attorney.

An issue that befuddles some business owners during the course of their divorce litigation is how to regulate the operation and management of their businesses. In cases where both spouses own interests in the business, they may struggle for control of important business and financial decisions.

Some issues may be resolved under the company’s partnership agreement, shareholders’ agreement, limited liability company (LLC) agreement, or corporate by-laws. Yet, these agreements are often too vague to deal effectively with disputes between divorcing spouses who own businesses together.

Early in the evolution of the Divorce Code, the Superior Court of Pennsylvania authorized the Courts to appoint receivers or trustees to prevent the dissipation of an ongoing business concern. Mayhue v. Mayhue, 485 A.2d 494 (Pa.Super.1984). The Superior Court in Mayhue held that 23 Pa.C.S. § 3505(a) and 23 Pa.C.S. § 3323(f) authorized the Courts to enter an injunction to prevent a spouse from continuing a course of conduct calculated to defeat his wife’s property rights in the business. The Superior Court in Mayhue approved the trustee’s powers to liquidate assets to pay business debts, pay delinquent taxes, and satisfy intercompany debts.

The appointment of a receiver is not practical in every case because the expense of paying a receiver may not be justified. Still, there are some cases in which third party supervision of the business might be the only practical way t0 ensure continued smooth operation of a business caught in the middle.

The winter holidays can be fun and relaxing, but at times they can also be stressful or disappointing. The downside of the holiday season is a special challenge for families who are experiencing divorce or separation. Here are a few tips to cope with the holiday season:

1. Keep your expectations realistic. People who are separated or divorced may have limited budgets for gifts, extravagant meals, or elaborate holiday decorations. Plan for a smaller, more intimate celebration with your most trusted friends and family – which can be even more meaningful than blowout parties and expensive gifts.

2.  Consider charitable endeavors. Thanksgiving is a great opportunity to donate time or supplies to food banks, homeless shelters, and charitable organizations. The satisfaction that you will receive from giving to others will make it a memorable holiday season for those who receive and those who give.

3. Don’t turn away help from others. Sometimes we deny our our needs because we don’t want to impose on others. But when friends and family extend holiday invitations or ask if we need help, it may be a good time to renew our bonds with those friends or family members. Let others help you when they can.

4. Keep a positive attitude with the kids. A holiday divided between two parents can be stressful for kids. Don’t compound their stress by saying anything bad about the other parent. Even veiled comments are easily perceived by children. Instead, focus on the positive: perhaps two turkey dinners, or seeing both extended families. Kids will appreciate your good humor and feel much better about themselves and their family.

The Superior Court of Pennsylvania held, once again, that the budget is the most important element of a Melzer child support case — that is, a high-income case where the guidelines do not apply. Under Pennsylvania law, the child support guidelines govern cases where the parents’ combined net incomes are $20,000 per month or less. Yet, in those high-income cases above $20,000 per month, the guidelines are irrelevant except to set the minimum level of child support. In high-income cases, the courts must analyze the parents’ budgetary expenditures to determine the proper amount of child support.

A recent case, Rich v. Rich (2009), demonstrates how important the budget can be in high-income cases.  The aptly-named patriarch of this family provided the standard of living that only a ten-figure salary can afford. Father earned $9 to $10 million per year as the CEO of a coal company. During the marriage, the family lived in a 10,000 square foot home on 150 acres with an indoor pool and amenities. The family traveled worldwide on vacations and spent summers at homes in Florida and the Jersey shore. After separation, Mother purchased a modest home and moderated her lifestyle. She did not submit a detailed budget when she applied for child support. Instead, she pointed to the Father’s affluent lifestyle as an indicator of how much she should receive.

When Mother was awarded an amount of child support equal to nearly 100% of her expenditures, she complained because it was just 2% of the Father’s income. She reasoned that she should receive more like 15%. The Superior Court disagreed, holding that Mother should have proven that she was actually spending that much.

It’s never easy to take the first step on any journey. When you are facing a marital separation, there are five things that you can do to protect yourself, financially and emotionally.

1.         Secure your property. Review your joint bank and credit card statements regularly to ensure that no unexpected withdrawals or charges have been made. You might want to divide joint accounts or close credit cards if there is no legal restriction, but check with your divorce lawyer first. It’s also a good idea to secure property that may have sentimental value, like family heirlooms, where they cannot be misplaced or damaged.

2.         Conserve resources. Creating a budget and sticking to it are always prudent measures, especially during a marital separation. When one household becomes two households, the expenses are increased but income is not. When making financial decisions, consider the effect on cash flow and liquidity. It might be better to pay joint debts out of joint income and assets instead of your separate income and assets, but check with your divorce lawyer first.

3.         Gather financial records. If you keep your records organized, you will have an advantage in the divorce process and save legal fees. Make photocopies and keep them in a secure place so that you can furnish them to your divorce lawyer when asked. If you have access to your spouse’s records legally, make copies of them as well. You can obtain most documents through a legal process known as discovery, but it is cheaper to make copies yourself.

4.         Think twice before acting. Imagine at all times that your kids and a family judge are watching every action and reading what you write. Anything you say or write in emails and text messages might be used as evidence. How would a family judge react to your Facebook profile? If you have a temper, consider moving out before you do something that might result in a restraining order. Don’t make any agreement without consulting a lawyer first.  

5.         Contact reliable allies. Trust is one of the first casualties of divorce, so you need to find reliable allies. Consider supportive friends and family members who are able to keep your confidences and empathize with your feelings. Physical activities like exercise can reduce stress more effectively than alcohol or junk food. Hire a family lawyer that you feel comfortable with. It is very important to understand what your lawyer is saying and to be heard when you speak to your lawyer. Consider lawyers who concentrate their practice in divorce and know the nuances of this complex area of legal practice.

It’s natural to feel sad about divorcing. A marital separation or divorce can bring changes that cause stress or discomfort, at least for a while. Yet, recent research by a Harvard psychology professor has shown that the human brain contains a built-in capacity to recover happiness in a relatively short time. Prof. Daniel Gilbert is the author of the book “Stumbling on Happiness” (Random House 2007). Professor Gilbert has done extensive research of the frontal lobe cortex, the area of the human brain that generates our imagination. One thing that separates us from the animals is our ability to imagine experiences we haven’t actually had and judge whether those experiences might be good or bad. But our imagination is flawed. When we imagine what might happen to us, we usually misjudge how good or bad an experience might be. Here’s the hopeful part: when bad things happen to us, our frontal lobe cortex is programmed to “synthesize” happiness in a short period of time. Professor Gilbert found that survivors of catastrophic illnesses were just as happy as million-dollar lottery winners after the crisis period had passed. In fact, most people who have experienced bad events return to normal levels of happiness in an average of three months. More research from Prof. Gilbert: The “synthetic” happiness that our brains create when we recover from bad experiences is just as real and satisfying as the “natural” happiness we feel when good things happen. You might think that we are just fooling ourselves when our brains make lemonade from sour lemons, but Professor Gilbert’s studies show that synthetic happiness is just as good as “real” happiness. The moral of the story? We must keep hope alive as we are surviving a crisis period, like a marital separation or divorce. Our minds tend to exaggerate the good that we remember in the past and over-emphasize the bad when we imagine the future. Knowing that our minds will naturally return us to happiness, we can better survive the change.

Asking your fiance for a prenup doesn’t have to spoil the joy of your engagement. Personal finance experts agree that prenuptial agreements are an effective way for couples to make financial plans for their future. More than one-third of all couples say they would like to have a prenuptial agreement, according to a recent survey. A prenuptial agreement can address important topics like spending, credit card debt, and estate planning, as well as protecting family businesses and premarital assets, providing for children’s needs, and avoiding costly, protracted litigation in the event of a divorce. These three tips might make the conversation easier to have:

Allow enough time.

First, give your betrothed plenty of time to think about it. No one likes to be rushed. You know how crazy it can be to make wedding arrangements, so don’t let the prenup be the last thing on the list. A good rule of thumb would be three to six months before the wedding.

Create a context.

Next, help your fiance to understand why you need a prenup and how it fits into the “big picture.” You might want to present the prenup along with wills, health care powers of attorney, living wills, insurance policies, and other estate planning documents. The prenup is just one of several documents that will establish the financial foundation of the marriage.

Get independent legal counsel.

Finally, encourage your fiance to hire independent legal counsel. You might even offer to pay the bill. This step will allow your fiance to ask questions that might be uncomfortable for you or your lawyer to answer, and it may ensure that the agreement will be enforceable.