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.

During the statewide broadcast of PBI’s Family Law Update today, my colleague David Ladov asked me to post the features that a marital settlement agreement would have to contain in order to qualify as a QDRO (qualified domestic relations order). A QDRO is one of two possible ways that someone may waive his or her right to receive a share of his or her ex-spouse’s retirement benefits (the other being a beneficiary designation form). According to the U.S. Supreme Court’s 2009 decision in Kennedy v. Dupont, a marital settlement agreement by itself was not good enough to waive an ex-wife’s interest in an employer-sponsored pension plan, in the absence of a QDRO or beneficiary designation form.

I suggested during the broadcast that some divorce lawyers might wish to avoid this problem by crafting marital settlement agreements that would qualify as QDROs.  The requirements for QDROs under federal law are summarized on the website of the employee benefits administrator Hewitt Associates, as follows:

1. The instrument must be a court order, judgment or decree signed by a judge or other state-approved court official.
2. The instrument must relate to marital property rights or alimony, or the support of a child of the participant.
3. The instrument must contain a statement that it is issued pursuant to state domestic relations law.
4. The instrument must include the name, last known address, social security number and date of birth of the participant and alternate payee.
5. The instrument must describe the amount or percentage of benefits to be awarded to the alternate payee.
6. The instrument must indicate the manner of payment and when payments begin.

There are a couple of additional requirements (actually, three things the QDRO cannot do) that are described on Hewitt’s web site. In a case where a spouse is waiving his or her rights to an ex-spouse’s retirement benefits, these last few requirements might be irrelevant.

The first requirement listed above could be an obstacle in counties where settlement agreements are not routinely attached to the divorce decree or filed of record. Yet, a consent order incorporating a marital settlement agreement should be sufficient to satisfy this requirement. It is less clear that a consent order referring to an unattached settlement agreement might satisfy the requirement.

A recent decision issued by Florida’s intermediate appellate court, Craissati v. Craissati, amply demonstrates the importance of good contract writing skill. The husband and wife in this case entered into a marital settlement agreement, in which the husband agreed to pay alimony for eight years. Like most alimony agreements, this agreement provided that the alimony would terminate upon the death of the recipient, her remarriage, or cohabitation for a period of three months or more.

The wife in this case was incarcerated after a DUI conviction, and the husband petitioned the court for termination of his contractual alimony obligation. The parties stipulated that wife was, technically, “cohabiting” with her cell mate for a period in excess of three months, and that the termination clause of the marital settlement agreement was unambiguous. Still, the trial court held, the termination of alimony due to incarceration would be an absurd result not within the contemplation of the parties. The trial court modified the amount of alimony (since wife’s needs had been temporarily curtailed) but refused to terminate the obligation.

On appeal, the Florida appellate court reversed, adopting a literal construction of the agreement. Adding insult to injury, the author of the opinion found that driving under the influence was a voluntary act known to possibly result in incarceration, so the wife should have known that her criminal behavior could result in the termination of alimony.

If only the prisons were less crowded, the wife could have maintained her alimony award, I guess.