Facts: After 14 years of marriage, Husband and Wife entered into a postnuptial agreement in which both parties waived their rights to the property of the other spouse.
Specifically, the postnuptial agreement provided: “Each party hereby waives and releases all rights including, but not limited to statutory allowance; distributive share: right of election against Will; alimony; and all other rights which they may have acquired by reason of their marriage.”
Nine years later, Husband died. His Estate was closed by virtue of an agreed order in which Wife agreed that she was not entitled to any of the estate assets because of the postnuptial agreement.
Six months later, Husband’s estate filed a wrongful death suit against a nursing home regarding his death. That lawsuit was settled out of court nearly a year later. Upon settlement of the wrongful death action, Husband’s Estate filed a petition seeking a declaratory judgment to determine the proper distribution of the settlement proceeds. Wife argued that she was entitled to take her intestate share of the wrongful death settlement.
The trial court concluded that Wife could not benefit from the settlement because of her prior agreements. The trial court specifically found that all parties agreed that the postnuptial agreement was a “valid and enforceable contract.” The trial court went on to distribute the settlement proceeds to the beneficiaries of Husband’s Estate.
On Appeal: The Court of Appeals affirmed the trial court.
Generally, postnuptial agreements will be treated in the same manner as prenuptial and reconciliation agreements, meaning they are to be interpreted and enforced as any other contract. All contracts must be supported by adequate consideration, and agreements between spouses or potential spouses are no exception. Marriage itself is sufficient consideration for a prenuptial agreement. Similarly, reconciliation in the face of an impending separation or divorce may be adequate consideration. However, with a postnuptial agreement, the marriage itself cannot act as sufficient consideration because past consideration cannot support a current promise. Therefore, there must be consideration flowing to both parties as part of a postnuptial agreement.
Additionally, a postnuptial agreement must have built-in safeguards to protect from fraud, coercion or undue influence due to the confidential relationship between the parties to the contract. Tennessee Code Annotated § 36-3-501 requires that in order to be enforceable, prenuptial agreements must be entered into freely, knowledgeably, in good faith, and without the exertion of duress or undue influence.
Because postnuptial agreements should generally be governed by the same principles as prenuptial agreements, postnuptial agreements are favored by public policy and are construed liberally to give effect to the intention of the parties.
After reviewing the record, the Court concluded:
[W]e must conclude that in signing the [prenuptial] agreement, Widow waived her right to share in the proceeds from the wrongful death action. [Wife] clearly agreed that in addition to waiving all rights to the decedent’s property and estate as it existed at his death, she would waive “all other rights which they may have acquired by reason of their marriage.” It is clear that by using this broad language that the parties intended that the marriage should have no effect on the spouse’s respective property and statutory rights by reason of the marriage. We are constrained by the plain language of the agreement and cannot rewrite the parties’ agreement to ameliorate this harsh result…. [Wife’s] only claim to entitlement of the proceeds from the wrongful death action is “by reason of [her] marriage” to the decedent. Accordingly, the postnuptial agreement, which is undisputedly valid and enforceable, waives her right to share in the wrongful death proceeds.
Accordingly, the trial court’s ruling was affirmed.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.
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