A SHORT HISTORY OF PRENUPTIAL AGREEMENTS IN ALASKA

Before jumping into a discussion of the new Uniform Law for Premarital and Marital Agreements (ULPMA), I thought it might be a good idea to provide a short primer on prenuptial agreements in Alaska.  As always, keep in mind that this is not legal advice – it’s a general statement of the history of the law governing premarital agreements (prenups) in Alaska.  If you want legal advice, contact a good family law attorney – if not me, then someone else.  Alaska has many quality practitioners. 

            Our common law (the law set out in our cases) traditionally taught that prenups were “inconsistent with the sanctity of marriage and the state's interest in preserving marriage and maintaining the financial security of divorced persons.”   Courts uniformly viewed prenups as inherently conducive to divorce and as allowing a husband to get around his legal duty to support his wife.  Their reasoning was interesting, as seen in this opinion from a court in Tennessee:

[S]uch [a] contract is promotive of divorce and void on grounds of public policy. Such contract[s] could induce a mercenary husband to inflict on his wife any wrong he might desire with the knowledge that his pecuniary liability would be limited. In other words, a husband could through abuse and ill treatment of his wife force her to bring an action for divorce and thereby buy a divorce for a sum far less than he would otherwise have to pay. 

Crouch v. Crouch, 53 Tenn.App. 594, 385 S.W.2d 288, 293 (1964). 

So, prior to 1970, prenuptial agreements made in contemplation of divorce were almost universally viewed as ineffective by our courts.  They regularly held that prenuptial agreements (1) are incompatible with and denigrate the marital relation; (2) tend to facilitate and induce divorce; and (3) burden the state by casting indigent spouses on public charity.

            In Brooks v. Brooks, the law of this state changed when the Alaska Supreme Court announced that prenuptial agreements in contemplation of divorce would be judicially recognized.  The court noted that with the advent of no-fault divorce laws and the changes in society such laws represent, the traditional rule has rapidly given way to the more realistic view that prenuptial agreements are not automatically void but are valid and enforceable if certain standards of “fairness” are met. Although the standards vary from state to state, the following three criteria are typically considered and are recognized in Alaska as barriers to acceptance:

1.         Was the agreement obtained through fraud, duress or mistake, or misrepresentation or nondisclosure of a material fact?

2.         Was the agreement unconscionable (unbelievably unfair) when executed?

3.         Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?

If none of the above factors are present, prenuptial agreements have generally been given judicial recognition. 

In taking this new position, the court cited to the old Uniform Premarital Agreement Act, as well as to changing socio-economic norms:

The idea that prenuptial agreements induce divorce is anachronistic. Today, divorce is a “common-place fact of life.” As a result there is a concurrent increase in second and third marriages—often of mature people with substantial means and separate families from earlier marriages. The conflicts that naturally inhere in such relationships make the litigation that follows even more uncertain, unpleasant and costly. Consequently, people with previous “bad luck” with domestic life may not be willing to risk marriage again without the ability to safeguard their financial interests. In other words, without the ability to order their own affairs as they wish, many people may simply forgo marriage for more “informal” relationships.

. . . .

Prenuptial agreements, on the other hand, provide such people with the opportunity to ensure predictability, plan their future with more security, and, most importantly, decide their own destiny. Moreover, allowing couples to think through the financial aspects of their marriage beforehand can only foster strength and permanency in that relationship. In this day and age, judicial recognition of prenuptial agreements most likely “encourages rather than discourages marriage.”

                        . . . .

In sum, both the realities of our society and policy reasons favor judicial recognition of prenuptial agreements. Rather than inducing divorce, such agreements simply acknowledge its ordinariness. With divorce as likely an outcome of marriage as permanence, we see no logical or compelling reason why public policy should not allow two mature adults to handle their own financial affairs. Therefore, we join those courts that have recognized that prenuptial agreements legally procured and ostensibly fair in result are valid and can be enforced. “The reasoning that once found them contrary to public policy has no place in today's matrimonial law.”

            So, for the past twenty-five years or so, Alaska has recognized prenuptial agreements as a reasonable way to predetermine how economic circumstances will be treated in the event of divorce – spousal support, property division, and more. 

            Unfortunately, not all states apply the same standards to prenups, which can create quite a bit of consternation in our mobile society.  I’ll discuss this in some detail in my next piece on the new Uniform Law for Premarital and Marital Agreements, passed last summer.