Postnuptial agreement must be ‘fair’ at the time of divorce

A postnuptial agreement is similar to a prenuptial agreement – it sets out what each person is entitled to if the marriage fails. The difference is that a postnuptial agreement is signed after the wedding has taken place.

Postnuptial agreements are increasingly being accepted as legally valid. But they’re not foolproof, and sometimes a spouse can avoid their terms – especially if those terms just don’t seem particularly fair.

For instance, the Connecticut Supreme Court recently refused to enforce a postnuptial agreement that a couple had signed back in 1989.

Under that contract, the wife had agreed to accept $75,000 as a cash settlement of any alimony claim if the couple split up, and gave up any rights to her husband’s car-wash business.

However, by the time the couple divorced in 2007, the car-wash business had taken off, and the amount the wife was entitled to under the agreement now represented only a small portion of the couple’s assets.

The wife argued that postnuptial agreements should be invalid in general.

The court didn’t go that far. It said that postnuptial agreements are okay…as long as they’re fair to both people at the time they’re signed, and as long as the terms are still “conscionable” at the time of a divorce.

But in this case, the court said the terms were totally unfair at the time of the divorce, because the wife would get only $75,000 even though the couple’s assets were now worth nearly $1 million.