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Enforceability Of Marital Property Agreements In The Event Of A Divorce

by | May 30, 2019 | Blog, Divorce

Marital Property Agreements (also referred to as Prenuptial Agreements) serve a useful purpose to avoid confusion over finances and expectations when entering a marriage, and clarify financial relationships during a marriage.  This certainty can provide peace of mind for both parties given the fact that the majority of divorces result from disputes over how people manage their money during their marriage.  The landmark case Button v. Button serves as an example to determine the components necessary for an enforceable agreement in the State of Wisconsin.

In Button, the wife appealed a decision by the circuit court which divided property between the parties in accordance to their written property agreement. The Button court defined four requirements necessary to enforce a Marital Property Agreement as enforceable:  (1) that each spouse has made a fair and complete disclosure to the other about their financial status; (2) that each spouse must enter into the agreement voluntarily and freely; (3) the substantive terms of the agreement dividing property are fair to each spouse, both at the time of entering the agreement, and also at the time of litigation; and (4) both parties have had the ability to consult with an attorney prior to signing.

In Button, the Marital Property Agreement provided that in the event of a divorce all property owned by either party prior to marriage would remain the separate property of that party.  Therefore, the testimony offered by Mrs. Button stating the agreement was never explained to her, she did not have independent counsel, no financial disclosures were made, and she stayed at home raising a family while her husband accrued the vast majority of their marital assets in his name alone, convinced the Court that their agreement was inequitable and ultimately unenforceable.

Competing public policies, freedom of contract, and the special interest of the state may alter how Marital Property Agreements are considered by the family court.  Marriage has a unique role in our society.  It is more than just a contract between individuals, but a change in legal status wherein certain rights and obligations given by the state are held.  Public interest requires that a financial agreement between spouses or prospective spouses be fulfilled under circumstances of honesty, equality, and fair dealing.  The parties are free to contract, but they do so under the court’s duty to review the agreement and protect their financial interests upon divorce.  A Marital Property Agreement that has been carefully drafted and complies with the essential elements must be followed by the court in making its property division decisions.  A decision on alimony/spousal maintenance, however, differs in that the agreement is only one of several factors the court considers in that regard.

A self-drafted document that parties sign is rarely sufficient to satisfy a court that it is to be taken as a true contract.  To ensure that an agreement is appropriately drafted, an attorney should always be consulted.

For more information regarding this case, or to contact a Wisconsin family law attorney, please contact Attorney Maryanne Kircher at Bosshard Parke, Ltd. law firm.


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