Articles Posted in Marital Property Agreements

Last year, in the context of divorce, we blogged about enforcement of and challenges to the property division provisions of a marital property agreement, or prenup. Under Wisconsin law, courts must presume that these provisions are valid and enforceable unless the prenup is shown to be inequitable. Caselaw, beginning with Button v. Button, has interpreted the meaning of “inequitable” under these circumstances.

But the analysis is different for prenup provisions regarding maintenance (alimony) at divorce. While property division provisions are governed by Wis. Stat. § 767.61, maintenance provisions are governed by Wis. Stat. § 767.56(1c)(h). That statute provides that an agreement “concerning any arrangement for the financial support of the parties” is a factor the trial court must consider in making a maintenance decision. A prenup thus is just one factor regarding maintenance to be considered by the trial court, along with other factors such as the length of the marriage, the parties’ earning capacity, etc. The factors are listed at Wis. Stat. § 767.56(1c), along with the catch-all “such other factors as the court may in each individual case determine to be relevant.”

The difference is significant. Regarding property division, the burden is on the spouse who is challenging the prenup to show that it is inequitable; if the spouse cannot make such a showing, the inquiry ends and the terms of the prenup are enforced. Regarding maintenance, there is no presumption, no shifting of the burden between spouses; rather, the trial court weighs the evidence and exercises its discretion in determining maintenance. The focus is not on the prenup itself, but on the prenup in the context of the statutory maintenance factors and the twin maintenance objectives, support and fairness. See, e.g., Hefty v. Hefty.

Maybe you entered a marital property agreement (prenup) prior to your marriage, and now that you are contemplating divorce, you assume there is no point in discussing division of property because the prenup’s provisions will control. Or maybe you are considering signing a prenup as an iron-clad guarantee that if you ever divorce, property will be divided as you wish.

In either case, think again. Yes, in Wisconsin, prenup provisions concerning division of property are presumed to be valid and enforceable pursuant to the divorce statutes. Still, there are many possible grounds for challenging a prenup and having it thrown out.

Challenges to the property division provisions of a prenup are analyzed under Button v. Button, 131 Wis.2d 84 (1986), and cases applying Button. In summary, Button provides that a prenup may be vulnerable to challenge if the parties did not make full financial disclosure to each other before signing the prenup and entering the marriage. It may be vulnerable to challenge if one spouse did not have a meaningful choice whether to enter the agreement, considering factors such as adequate time to evaluate the agreement, advice of independent counsel, and comprehension of the agreement. It may be vulnerable to challenge if it was unfair to one of the parties based upon their circumstances at the time it was signed, or if it is unfair to one of the parties at the time of divorce due to unforeseeable changed circumstances. Under Button, a prenup will be thrown out if a court finds that it fails on any one of these points.