IN BRIEF - PAGE 2
JUNE 2006
www.osbplf.org
tion. Take the time to describe exactly what will hap-
pen to complex assets, such as retirement plans,
stock options, intellectual property, and business as-
sets.
Consider Reasonableness of the Agreement.
Although a reasonable agreement that provides for
the needs of both spouses may produce a more
satisfying marital relationship than a one-sided
agreement, Oregon does not require that prenuptials
be reasonable. A prenuptial agreement is very diffi-
cult to set aside and is likely to be upheld under the
Oregon statute.
ORS 108.725 sets forth the two grounds under
which a premarital agreement is not enforceable. The
first ground is that the party did not execute the
agreement voluntarily. The second ground is that
the agreement was unconscionable when it was ex-
ecuted and, before execution, one party (1) was not
provided fair and reasonable disclosure of the other
party’s property or financial obligations, (2) did not
waive the right to disclosure, and (3) did not have or
reasonably could not have had adequate knowledge
of the other party’s property or financial obligations.
Clients challenging a prenuptial agreement will find
this an extraordinarily difficult standard to meet. Ab-
sent unusual circumstances, courts are quite likely
to enforce prenuptial agreements. This message is
particularly important for the “have not” spouse who
is frequently less sophisticated than the “have”
spouse, uncomfortable with the prenuptial negotia-
tion, and anxious to get married and put it all behind.
Although full disclosure of each party’s prop-
erty and financial obligation is not required by the
statute, it eliminates any attack based on unconscio-
nability, leaving only lack of voluntary execution as
a ground for setting aside the agreement. If the par-
ties choose the full disclosure approach, lawyers
customarily attach exhibits to the prenuptial agree-
ment, showing each client’s separate property and
any property they hold jointly or intend to make
joint following the marriage.
Keep File Notes and Letters to Clients. Take
reasonably detailed notes about your conversations
with clients and keep those notes in your files. This
is particularly wise when a client insists on doing
something that you think may not work out well or
that the client may later regret. Advise clients in
writing when they are acting contrary to your advice.
If the situation is crucial, consider having the client
sign off on the letter acknowledging your advice.
Retitle the Property. A prenuptial agreement
may be used to define the legal status of untitled
property. For instance, a prenuptial (or postnuptial)
agreement could state that all the parties’ household
furniture and furnishings are joint property, regard-
less of who brought such property to the marriage or
paid for it. This statement would effectively make
such property joint. A prenuptial agreement, how-
ever, cannot actually change the title to property.
Although it is possible to state in a prenuptial agree-
ment that the parties’ principal residence is joint
property, this may create an ambiguous situation
unless the title to the residence is also transferred at
the same time. Creating joint assets can be tricky,
particularly when one person is buying an interest in
an asset, such as a residence already owned by one
of the clients. Use available resources, such as the
OSB CLE on Family Law, as a starting point.
Advise Clients to Keep Records. A well-drafted
prenuptial agreement is only half the battle. The
other half consists of the client’s keeping careful
records, reviewing the agreement from time to time,
and doing his or her best to live within its terms.
Even the best-drafted prenuptial agreement will not
be helpful if the parties have kept poor records or
acted inconsistently with the document, such as
placing assets in joint names without intending to
make the assets joint for purposes of the agreement.
Modify in Writing. Prenuptial agreements can be
modified or terminated, but only in writing. Tearing
them up, throwing them in the fireplace, or otherwise
destroying them will not alter the agreement.
POSTNUPTIAL AGREEMENTS
Although many of the comments above about
prenuptial agreements also apply to postnuptial
agreements, the following additional considerations
come into play.
Include Consideration. A prenuptial agreement
requires no consideration to be enforceable, includ-
ing any modification or revocation of the agreement.
Postnuptial agreements are governed by contract
law, which requires consideration to enter into and
modify an agreement. The mutual alteration of mari-
tal rights may provide adequate consideration, but it
is safer to require additional monetary consideration,
no matter how minimal.
Clarify Application. Postnuptial agreements do
not enjoy the statutory authority of prenuptial