Lisa teamed up with Julia Rodgers of HelloPrenup for another academic article on legal issues related to prenups in New York.
Read “Shining a Light on Drafting Enforceable Prenuptial Agreements” in The New York Law Journal, here:
Shining a Light on Drafting Enforceable Prenuptial Agreements: Lessons from JM v. GV; What is Acceptable and What is Not?
The recent decision in JM v. GV not only illuminates the exacting standards necessary for alimony waivers in prenuptial agreements in New York, but also reaffirms that parties to a marriage can count on their prenuptial agreements to fully and finally resolve issues of property settlement and spousal support, provided that they are drafted properly. Judge Sunshine’s decision should serve a strong warning call to attorneys—be sure that you understand the area of law in which you are drafting, be certain to maintain strong familiarity with the statutory requirements, draft carefully and completely, adhering to the relevant statutory requirements and principles of law or your provisions and possibly your prenuptial agreement may be set aside and your client left disappointed and unprotected. In sum, in the absence of inequitable conduct, the court will not rewrite the parties’ agreements for them even if the “provisions might be viewed as improvident or one-sided.” Gottlieb v. Gottlieb. “Importantly, the party seeking to set aside the validity of the prenuptial agreement has the heavy burden of setting it aside.”
In JM v. GV, Justice Sunshine invalidated an alimony waiver due to an unrepresented party’s “unknowing” relinquishment of their rights to alimony. Significantly, Judge Sunshine’s emphasis on “knowing” waivers was not based upon the fact that the wife was represented by counsel and the husband was not. In fact, Judge Sunshine clearly validated a party’s right to enter into an agreement without counsel, stating that the absence of legal counsel does not “require an automatic nullification of the agreement.” Nor was Judge Sunshine’s emphasis on “knowing waivers” based upon the husband’s claim that he executed the prenuptial agreement just 7 days prior to the parties’ wedding at his future wife’s then attorney’s office. Just 7 days prior to the wedding, the husband claimed that he reviewed the agreement for the very first and only time; the husband’s stated concern that if he did not sign the prenuptial agreement, the wedding would be cancelled did not nullify the prenuptial agreement. Nor was the need for a “knowing waiver” based upon the husband’s claim that he either couldn’t afford or didn’t want to pay for a lawyer to review the prenuptial agreement that his then future wife and allegedly her family were demanding be executed prior to the marriage. Moreover, Judge Sunshine was unmoved by the husband’s argument that he was misled by the wife’s attorney’s bolding of certain words in the prenuptial agreement and the husband’s claim that due to the bolding of those specific words, he did not understand that he was waiving the equitable distribution of assets that would later be purchased and accumulated during the marriage. The fact that these same assets that the husband claimed to unknowingly waive would have constituted marital assets, subject to equitable distribution, did not cause Judge Sunshine to set aside the division of assets provided for in the prenuptial agreement. Nor was Judge Sunshine convinced to set aside the prenuptial agreement or even the provisions regarding division of property for the unrepresented husband, notwithstanding that the husband would leave the marriage with minimal to virtually no assets, other than his claimed to be worthless photography business and minimal funds in his checking account. The wife, on the other hand, pursuant to the prenuptial agreement would leave the marriage with over one million dollars in assets, most of which were accumulated during the marriage and but for the prenuptial agreement would have been subject to equitable distribution.
Instead, Judge Sunshine laser focused on the fact that the parties did not set forth their income and that the required statutory calculations for the waiver of spousal support were absent from the prenuptial agreement. These statutory calculations as set forth in DRL 236 would have included the amount that the husband would have received in spousal support based upon the wife’s then income and the husband’s then income. The statutory calculations would have demonstrated to the husband with the clarity of formula and arithmetic the spousal support that he should have presumptively received. The statutory calculations would have clearly defined what spousal support the husband was waiving at the time of entering into the prenuptial agreement. As Justice Sunshine stated, “Only after such an articulated sum is detailed can a self-represented party or parties make a ‘knowing waiver’ of that right. Without an expressly articulated sum resulting from the statutory calculation, any ‘waiver’ by a self-represented litigant is, pursuant to the statute, not knowingly made.”
As Justice Sunshine further pointed out, “To satisfy the knowing waiver aspect of the maintenance guidelines statute, both parties must provide their incomes and the full calculation, as of the time they enter into the prenuptial agreement, where either or both parties are self-represented because without the inclusion of incomes as of the date of the agreement and the full calculation under the guidelines statute formula, there could be no knowing waiver because the guidelines sum of maintenance would not be explicitly known and, as such, the parties could not expressly waive it.”
The JM v. GV decision yields two critical implications for New York matrimonial practice. Firstly, it strongly and emphatically signals that even unrepresented parties have the ability to enter into enforceable and even potentially unfair agreements provided that they do so with transparency and fair dealing and that the agreements are not unconscionable. Secondly, irrespective of representation, the inclusion of explicit statutory alimony calculations within prenuptial agreements is unequivocally best and required practice, ensuring transparency and informed consent.
The ruling also serves as a potent reminder of the indispensable role of robust severability clauses in safeguarding the integrity of prenuptial agreements, allowing for the preservation of the contract’s core provisions even in the face of isolated defects. In this case, while the maintenance waivers were set aside, the remainder of the prenuptial agreement was not.
Applying Child Support Deviation Precision to Alimony Waivers in Prenuptial Agreements Provides a Belt and Suspender Approach
In the realm of matrimonial law, the need for clarity and informed consent is paramount. With Judge Sunshine’s decision, it is clear that the well-established principle in the context of child support in New York is equally applied to alimony waivers within prenuptial agreements. Significantly, the Child Support Standards Act (CSSA) requires that parties also set forth their income and certain calculations when waiving out of the statutory cap for basic child support. New York law permits parents to deviate from the CSSA guidelines, provided specific safeguards are met to ensure informed consent. As codified in New York Family Court Act § 413(h), “A validly executed agreement or stipulation voluntarily entered into between the parties…shall include a provision stating that the parties have been advised of the provisions of this subdivision and that the basic child support obligation provided for therein would presumptively result in the correct amount of child support to be awarded.” Furthermore, “In the event that such agreement or stipulation deviates from the basic child support obligation, the agreement or stipulation must specify the amount that such basic child support obligation would have been and the reason or reasons that such agreement or stipulation does not provide for payment of that amount.”
The requirement that agreements for child support specify the reason for deviating from the presumptive amount of basic child support should also hold true for the maintenance waiver. Wouldn’t the better practice be to state the reason or reasons in the prenuptial agreement for the deviation from the presumptive amount of maintenance in addition to setting forth the income and the calculations? Moreover, it would also be best practice to set forth the factors that the Court considers in determining spousal support. Finally, it would be best to set forth the advisory guidelines utilized by the Court to determine the duration of spousal support. All of this information would be the belts and suspenders that crazy glues the prenuptial agreement together, which is exactly what makes the client and of course their attorney sleep better at night. These additional drafting steps become the unequivocal acknowledgments of informed consent. This approach would ensure that alimony waivers are “knowing” and voluntary, thereby replicating the robust protections afforded to child support agreements under the CSSA.
To illustrate the practical application of CSSA-compliant waivers, consider the holding in V.S. v. A.S. In that case, the parties entered into a postnuptial agreement that deviated from the CSSA guidelines. The agreement explicitly acknowledged the parties’ awareness of the CSSA and the presumptive correctness of the guidelines-based child support amount. Furthermore, the agreement articulated specific reasons for the deviation. As the court noted, “The parties, both represented by able counsel, properly recited in their forty-seven page Agreement—over seven pages of which are devoted to child support alone—their acknowledgment of the CSSA guidelines, the several reasons why they elected to deviate from the guidelines, and the calculation of child support percentages.” The court ultimately held that the postnuptial agreement, having substantially complied with the CSSA provisions, was enforceable. This case serves as a paradigm for demonstrating that meticulously drafted agreements, adhering to the statutory requirements for informed consent, will be upheld by the courts. Applying this standard to spousal support waivers will ensure that those agreements are also held to the same standard.
JM v. GV reinforces the necessity for meticulous drafting of alimony waivers and agreements generally. By adopting a structured approach mirroring New York’s CSSA that incorporates statutory calculations for both basic and durational alimony, justifications for deviations, financial disclosures, and robust severability clauses, practitioners can ensure that these agreements as to spousal support waivers are enforceable and that parties make informed decisions.
Lastly, continuous professional development is essential. Practitioners must remain vigilant in monitoring evolving case law and legislative changes, ensuring their practices remain consistently aligned with the most current legal standards and best practices so that they can best serve their clients and draft agreements that stand up to the Court’s scrutiny and are therefore enforceable.