When a couple decides to marry, they plan for a marriage that never ends. Approximately 25,000 Oregon marriages occur each year. However, some marriages end in divorce. Annually, the number of divorces in Oregon is nearly half the amount of the state’s marriages. Therefore, prospective spouses may enter a prenuptial agreement in contemplation of marriage that becomes effective when they marry. For couples who bring property into the marriage, each person may want to protect their separate property. They may also want to go into the marriage with an understanding between them. Therefore, the agreement outlines and resolves specific issues if they occur during the marriage, in the event of a divorce or upon a spouse’s death. Nevertheless, some couples marry without having a premarital agreement.
During the marriage, many spouses have children, acquire property, start businesses, and increase that finances. With the change of circumstances, married couples can create a postnuptial agreement, which is a contract that spouses enter into after marriage, which may occur many years later. A postnuptial agreement, or postnup, addresses and resolves issues in writing that may arise in the marriage and possible divorce. Postnups differ from postmarital settlement agreements, which spouses create in contemplation of getting a divorce. Issues outlined in a postnuptial contract may include:
- Designation of separate and marital property
- Division and distribution of debts and liabilities in the event of a divorce
- Spousal support
- Terms in the event of legal separation
- Terms in the event of a spouse’s death
Oregon law governs premarital agreements. It sets forth when they go into effect, the subjects they can contain, statutes of limitations, defenses, and modifications of the contracts. However, Oregon does not have laws that specifically govern postnuptial agreements. Therefore, courts determine the legality and validity of postmarital agreements by applying legal concepts regarding contracts, including:
- Capacity to contract
- Unconscionability and unequal bargaining power
A postnup is a type of contract because it is an agreement between two or more people to do or not to do a specific thing. Each spouse must have the legal capacity to enter into a contract. A spouse may be legally incapable of contracting due to age, mental status, or intoxication. Both spouses also must genuinely and voluntarily consent to enter and be bound by the contract. Fraud, duress and unequal bargaining power can negate such consent.