August 1, 2024, will usher in significant new changes to Minnesota law related to Antenuptial Agreements, reshaping the landscape for enforcement of Agreements signed after August 1, 2024.
Antenuptial Agreements, often known as premarital agreements, are favored by Minnesota law. Parties enter into Agreements to contractually tailor the law to fit their personal circumstances: They alter the statutory definitions of what constitutes marital vs. non-marital property. In other words, before they say “I Do” …they throw in a few “I Don’ts” with an eye toward being upfront with each other about financial expectations, defining their rights in advance of the marriage, and staying out of the courtroom in the event of marital dissolution.
Agreements are challenged, and sometimes voided, either at the time of a marital dissolution or a challenge in probate court, typically because the waivers go too far. In those instances, our courts review Agreements for procedural and substantive fairness.
In 1979, Minnesota Statute §519.11 was enacted to give guidance for the necessary procedural requirements. The analysis for substantive fairness came strictly from case law.
A little history as to how we got to the current change in the law: A few years after §519.11 was enacted, the Minnesota Supreme Court decided McKee-Johnson v. Johnson (“McKee-Johnson”). McKee-Johnson was considered the seminal case and outlined a three-part test for enforceability: 1) was the agreement procedurally fair, i.e., did it meet the statutory requirements; 2) was it substantively fair at the time it was signed; and 3) is it substantively fair at the time of enforcement. Practitioners and courts applied this 3-prong test to all Antenuptial Agreements signed after the enactment of the statute. The thought being that together, the statute and McKee-Johnson’s 3-part test incorporated prior case law for all Agreements.
Then, in 2018 came the Kremer v. Kremer (“Kremer”) decision. In that case, the Minnesota Supreme Court explained that the McKee-Johnson test, and §519.11, only applied to those Agreements that governed non-marital property. For those Agreements that also governed marital property, the case law that existed pre-statute applied.
Confusion, and perhaps a little mass hysteria among attorneys who draft Agreements, ensued. Here’s why: Virtually all Antenuptial Agreements govern both marital and non-marital law. Thus, according to Kremer, courts now had a dual-track analysis to employ: one for marital property and one for non-marital property. However, the statutory definition of non-marital property is marital property that is excluded by a valid antenuptial agreement. Arguably, Kremer was inconsistent with the statute and created a circular definition of non-marital property. The case also caused confusion about what constituted adequate consideration for Antenuptial Agreements, which are considered contracts between two consenting adults.
Because of the confusion, some practitioners took the position that they would no longer draft Antenuptial Agreements. That posed a public policy dilemma: Some couples chose to not marry without the ability to rely on an Antenuptial Agreement.
Lisa Spencer, along with her colleagues in the Minnesota Chapter of the American Academy of Matrimonial Lawyers (“MN-AAML”), took the lead in drafting new legislation that cleared up the confusion. The new statute takes effect August 1, 2024. Key components of the McKee-Johnson and Kremer decisions are now incorporated into the new statute. Importantly, this one new legal standard applies to all Agreements signed after August 1 st that govern both marital and non-marital property. It balances fairness between the parties and clarifies that a marriage itself is adequate consideration for an agreement.
These statutory revisions represent a pivotal moment in family law and estate planning that will have an impact for years to come.
As Minnesota’s marriage law changes, it is essential to thoroughly plan for your future. Henson Efron offers experienced guidance to navigate the complexities of Antenuptial Agreements. Ensure your interests are protected and aligned with your goals. Contact us today for professional support.
Lisa Spencer
People are often anxious and distraught as they anticipate the end of a relationship. My role is to be objective and provide skillful legal counsel through what can be a difficult transition. I care about your long-term needs and will do my best to safeguard your best interests with purposeful and compassionate guidance. I represent a wide range of high-net-worth clients including business executives, professional.
Bezel Bailey III
I am an active listener that truly seeks to understand my clients’ questions, comments, concerns and lives before I begin educating them on the legalities of their individual situation. By quickly responding to my clients’ requests, they know I am focused on their needs and am a reliable point-person for all things legal. I am honored to assist my clients with all of their estate.
