RFG Background Brief #6: "Do I need a prenuptial agreement?"
[February 24, 2005]
Howard I. Goldstein

What is a prenuptial agreement.?

Prenuptial agreements are contracts entered into between people planning to get married. The purpose of the agreement is to define for the couple what the disposition of their financial assets will be in the event of divorce, death, or, sometimes, the need for long-term nursing home care. In order to be valid they must be executed prior to the wedding. Both parties should have legal counsel and there needs to be a full financial disclosure of all assets of the parties. The agreement will ordinarily be enforced if it is executed properly and there is no fraud or duress involved in its execution. There is case law that suggests that if a prenuptial agreement is signed immediately prior to the wedding that could be evidence of duress. The courts in Massachusetts have also ruled that at the time the agreement is sought to be enforced, a “second look” will take place to make sure that the agreement is not unconscionable in light of the circumstances at the time you are seeking to enforce it.


What happens if I don’t have a prenuptial agreement?

If you don’t have a prenuptial agreement, generally the laws of your state of residence control as to property division on divorce or death, and to financial responsibility for long-term care under Medicaid. If you fully understand the applicable laws and are comfortable allowing the state laws to determine these things there may be no need to sign a prenuptial agreement.


What are the state laws of inheritance?

These are complicated and vary from state to state and from time to time they are amended.

If you die without a Will, state law (called the "law of intestacy") determines the distribution of what you own individually at death. In Massachusetts, the distribution to the surviving spouse depends on whether you also have issue (children, grandchildren, and so forth) or other "kindred" (meaning basically closest surviving blood relatives). The statute sometimes leads to surprising results. For example, if you have children, the spouse may be entitled to roughly only half the estate, with the balance going to the children. Even if you are not survived by children, the spouse is entitled to everything only if you are not also survived by kindred. If you are survived by kindred, the spouse may, if the estate is larger than a certain size, be entitled to only a portion of your estate.

If you die with a Will, the Will ordinarily controls distribution of what you own individually at death. However, under Massachusetts law, the surviving spouse has the legal right to "waive" the provisions in the Will that affect her and to take a "forced share" fixed by law. (This means essentially that one spouse cannot disinherit the other.) The formula is very complex. It is similar in design although different in detail from the formula that applies if you have no Will at all, as just described. And similarly, its operation may result in only a limited distribution to the surviving spouse with half or more of the estate going to children or even, in the absence of children, to more distant "kindred."


What are the state laws on distribution under a divorce?

These laws are also complicated and hard to summarize briefly, in that the courts have a great deal of discretion in awarding alimony and dividing property on divorce. As a general rule of thumb, in Massachusetts, the longer you are married, the more likely it is that your entire estate will be divided equally with your spouse upon divorce. In a short term marriage the most typical approach is to return the parties to the situation they were in before they got married. There is no hard and fast rule on what constitutes a short-term marriage or a long-term marriage. The courts can consider as factors what your assets were at the time of the marriage, but merely because there were assets acquired before the marriage does not exempt them from division at the time of divorce. If there are any extenuating circumstances a court can award alimony or divide assets to aid a sick or disabled spouse even if the marriage was for a very short period of time. Courts are also entitled to consider marital fault when dividing assets and awarding alimony so there is no way of completely anticipating what will happen to your property in the event of divorce.


What are the state laws dealing with the financing of long-term care, for example, by means of Medicaid eligibility?

The law is different in every state, but basically view the assets of both spouses as jointly available, and contain some provisions to protect to a limited extent the spouse at hone from impoverishment. (For a discussion of the state laws in Massachusetts that pertain to the situation of one spouse entering a nursing home while the other remains at home, see RFG BACKGROUND BRIEF #7.)


Will a prenuptial agreement protect me if my spouse has to go to a nursing home?

Maybe. This is a complicated and uncertain area, in which the domestic relations lawyers in our Firm often consult with the attorneys in the Firm’s elder and disability law group. Pre-marital agreements are often used in the context of later-life marriages or re-marriages, where each party comes to the marriage with assets and interests (such as children of a prior marriage) of his or her own already in place. Often among the special concerns of such persons is whether one spouse may be held to be financially responsible for the long-term care of the other. Often, in later-life marriages, both spouses assume that their income and assets will be dealt with separately for purposes of determining financial responsibility for long-term care; and neither spouse wants or expects the assets of one to be depleted on the care of the other. However, the law relating to financial responsibility for long-term care, and to MassHealth (as Medicaid is called in Massachusetts), is based on the notion of joint responsibility. Most prenuptial agreements we see do not take this concern into account. (Most deal only with death and divorce; and the question of financial responsibility may well arise in the context of an on-going marriage.) How effective a prenuptial agreement can be, is itself unclear. If long-term care is a concern, you must bring that to the attention of your attorney, and obtain advice on how to adopt the agreement in your case to address this issue.


So, in summary, why have a prenuptial agreement if state law covers these things?

The most important reasons to consider having a prenuptial agreement is that if offers a greater degree of certainty and a chance to individualize your planning to take specific needs and preferences into account. State law may deal with the same issues, but largely on the basis of formulas of general application in which take individual needs, expectations and wishes play no part.

In the context of divorce, for example, you can expect that under most circumstances a judge will enforce a validly executed prenuptial agreement. So if it is your view that you want all of the property you owned at the beginning of the marriage to remain yours in the event of divorce, and go to your parents, or children from a prior marriage, upon your death, that is something that would likely be enforced in a prenuptial agreement, Without a prenuptial agreement, however, state law would generally result in a very different distribution, likely not to involve at all persons other than the spouse . With respect to alimony, the case law is a little less clear, but, if a prenuptial agreement contains a provision in which both parties waive alimony, this provision will generally be enforced, at least in a short-term marriage. If the marriage lasts a long time or one spouse is particularly in need of financial help at the time of divorce, it may be possible that a prenuptial agreement will not be enforced, based upon all of the facts of that particular case. With regard to long-term care, the case law is even less clear, but you would do well at least to explore the issue with your attorney if this is a matter of concern.

So, each case is different. The benefit of a prenuptial agreement is that you are increasing the chances that you can predict and control what will happen to your property on death, on divorce, or on nursing home placement. But there is no absolute certainty.

For more information on divorce and family law, visit Howard Goldstein's own web page at www.hgoldstein.com.

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