In a recent matter, an interesting dilemma arose.
The parties were negotiating the terms of their prenuptial
agreement with assistance of independent counsel. My client, the
bride-to-be ("Elizabeth"), had significantly fewer assets than her
fiancé ("Joe").
During my meeting with Elizabeth, we discussed the pros and cons
of a sunset clause - a provision that would render the entire
prenup null and void upon the birth of the parties' first child (or
upon the parties' adoption of a first child). I encouraged
Elizabeth to try to negotiate as many of the terms of the agreement
that she felt comfortable so doing with Joe.
The next morning, after Elizabeth and Joe talked it out, the
couple was in agreement that the sunset clause was totally
appropriate for their life facts and circumstances.
All was well and good, until…
Two days later, I received a turnaround draft of the prenup from
Joe's attorney. He had subsequently advised Joe not to include the
sunset clause in the prenup. His reasoning was this: There was no
need to include the clause; if Elizabeth and Joe wanted to alter
any of the terms of the prenup after the arrival of their child,
they could simply amend or revoke the document at that time.
While seemingly perfectly logical on its face, this advice and
approach troubled me considerably.
It occurred to me that Elizabeth and Joe would find themselves
in the position of essentially negotiating a postnuptial agreement.
As with a prenup, one of the most basic tenets of a postnup is that
there must be absolutely no evidence of coercion, duress or undue
influence
Coercion. Duress. Undue influence. Those elements can be likened
to pornography - different in the eye of the beholder, and yet, you
kind of know it when you see it.
Often, when considering whether someone is truly under duress, a
judge will attempt to ascertain the emotional state of mind of the
spouse who feels she or he was acting out of a loss of fee will. As
to coercion and undue influence, the court will look to see if one
spouse was directly or tangentially instilling fear in the other to
cause him or her to take a certain action. Similarly, undue
influence can arise by applying steady pressure on another
individual over time or imposing a stronger will over a weaker
person's will by exploiting a relationship.
Anyone who has experienced parenthood for the first time can
attest to the sheer exhaustion, fog and haze that accompanies this
time of life. It is hard to imagine that a new parent could be well
positioned to negotiate important contract terms while in this
state of mind. The carefully considered decisions and discussions
that characterized the prenup period become in sharp contrast to
the chaotic and muddled mindset with which one would have to
negotiate anew the disposition of significant contract terms
involving key assets and liabilities.
In our case, Elizabeth and Joe gave the matter a great deal of
thought and eventually opted for the sunset clause to remain an
integral part of their postnup.
So, what is the takeaway lesson? It is clear that any sunset
clauses of a prenup - that give rise to renegotiation such that
they effectively devolve into a sunrise clause of a postnup -
should be generally considered undesirable and approached with all
due caution in the light of day.
Vicki L. Shemin, J.D., LICSW, ACSW is a family law
attorney, mediator, collaborative lawyer, parenting coordinator and
partner at Fields and Dennis LLP.