Prenuptial & Postnuptial Agreements

At divorce the following agreements between spouses could make a difference when property and debt are divided:

  • Prenuptial agreements
    Agreements between people who intend to get married.
  • Inter Vivos Trust agreements
    Agreements between spouses related to management of assets and liabilities during the marriage.
  • Separation contracts
    Agreements between spouses related to division of assets and liabilities.
  • Community Property agreements
    Agreements between spouses that convert into community property all property acquired before and after the date the agreement was signed. Usually community property agreements are prepared in conjunction with preparation of Wills. The main purpose of those agreements is to avoid probate in case one of the spouses dies.

With the exception of community property agreements, all other types of agreements must be rather detailed containing full disclosure of all assets and liabilities.

Prenuptial Agreements

Prenuptial agreements are agreements between future spouses in anticipation of marriage. The main purpose of those agreements is to characterize property of each spouse. They could cover following subjection:

  • Define as separate property previously acquired assets, liabilities, future incomes of each party
  • Discuss contribution of each party to community
  • Determine responsibility of each party for payment of bills, mortgages, and other present and future obligations
  • Define some assets as community property
  • Other subjects related to management of separate assets and liabilities
  • Discuss education and parenting of children who may be born during the marriage
  • Can also include personal rights and obligations of the spouses during the marriage

At divorce validity of prenuptial agreements is often questioned. To find it valid the court will do the following:

  • The court will decide whether the agreement was fair and reasonable for the party not seeking enforcement of the agreement. If the court finds it fair and reasonable, the court can enforce the agreement
  • If the court finds that the agreement is not fair and reasonable to the party not seeking enforcement of the agreement, the court looks at the following:

    • Were all assets were properly and fully disclosed? That means that the parties provided full disclosure of the amount, character and value of the property involved

    • And was the agreement entered into fully and voluntarily on independent advice and with full knowledge by both spouses of their rights. That means that each party should have an independent counsel
Inter Vivos Trust Agreements

Following subjects are the most common subjects of inter vivos agreements:

  • Classification of property as either community property, separate property, property held in joint tenancy, or as tenancy in common property
  • Agreement on payment of debts of one character by assets or another character
  • Powers of attorney by one spouse to another
  • Contract to make mutual wills or to establish mutual trusts, such as living trusts
Separation Contracts

Separation contracts are probably the most widely used type of contracts between spouses. This type of agreements is utilized especially often during pendency of the divorce.

Normally separation contracts discuss following subjects:

  • Division of assets
  • Payments of debt
  • Rights of inheritance
  • Support and parenting for children (please note that parenting plans and child support must be approved by the court, if the divorce is being requested to be finalized)
  • Spousal maintenance

Under RCW 26.16.210 spouses owe each other a fiduciary duty to deal openly and fairly with the other spouse, making full disclosure of all facts which are pertinent under the circumstances. If the fiduciary duty is breached by a spouse, the other spouse has grounds to avoid the agreement. A spousal contract which is induced by fraud, duress, or overreaching should not be sustained. The evidence must establish the validity of the agreement by clear and convincing evidence. Per RCW 26.09.070 (3) when determining validity of separation contracts, courts must make a finding on whether it was fair at the time of execution.

A separation contract is fair at the time of execution if

     (1) full disclosure has been made by parties to the amount, character and value of the property involved, and

    (2) the agreement was entered into fully and voluntarily on independent advice and with full knowledge by the spouse of her rights (In re Marriage of Shaffer, 47 Wn.App. 189, 194, 733 P.2d 1013, 1016 (1987); In re Marriage of Cohn, 18 Wn. Ap. 502, 506, 569 P.2d 79, 82 (1977))

The court makes the fairness determination by examination of "the economic circumstances of the parties and all relevant evidence." "The evidence of economic circumstances of the parties is relevant only insofar as it pertains to the issue of whether both parties were fully informed about the extent of their property, received independent advice about their rights, as entered the agreement voluntarily." (In re Marriage of Shaffer, 47 Wn. App. at 195)

If the court finds that the agreement is unfair at the time of execution, the court shall disregard the agreement - RCW 26.09.070 (4)

Spousal agreement on spousal maintenance shall be stated in the contract. In the absence of a statement in the separation contract to this effect, the court may treat that issue as not resolved between the parties and thus within the scope of the court's discretion per four corners of the contract rule.