Antenuptial Agreements, the Common Law and M.S. 519.11 is Examined

Minn. Stat. § 519.11 subd. 1 safe-harbor applies to nonmarital property in antenuptial agreements while the common law applies to marital property in antenuptial agreements. Kremer v. Kremer, __ N.W.2d __ (Minn. 2018), A15-2006, Filed May 30, 2018. Minn. Stat. § 519.11 subd. 1 provides that if there is (1) full and fair disclosure of the earnings and property of each party, and (2) the parties have had an opportunity to consult with legal counsel of their own choice, then the agreement satisfies the due process safe harbor as it applies to nonmarital property in the antenuptial agreement. If the safe harbor is not satisfied, the agreement as it applies to nonmarital property might still be valid under a common law analysis. But with regard to marital property, only the common law applies. The case of McKee-Johnson v. Johnson, 444 N.W.2d 259 (Minn. 1989) requires procedural fairness (equitably and fairly made which is the same as Minn. Stat. § 519.11 subd. 1 requirements) and substantive fairness (whether the agreement is unconscionable or oppressive). Also see In re Estate of Kinney, 733 N.W.2d 118 (Minn. 2007) which modified McKee-Johnson procedural fairness by applying the following 4 factor test: (1) whether there was fair and full disclosure of the parties’ assets; (2) whether the agreement was supported by adequate consideration; (3) whether both parties had knowledge of the material particulars of the agreement and how those provisions impacted the parties’ rights in the absence of the agreement; and (4) whether the agreement was procured by an abuse of fiduciary relations, undue influence, or duress. The ability to consult with independent counsel remains a relevant factor but is not determinative of fairness. The court specifically found that this common law test is NOT substantially similar to the Minn. Stat. § 519.11 subd. 1 procedural tests. With regard to establishing adequate consideration in factor (2), that is determined by examining the circumstances surrounding execution and enforcement of the antenuptial agreement to determine whether they were fair and equitable. The court has found in prior precedent that the agreement must provide for the financially disadvantaged spouse. Estate of Serbus, 324 N.W.2d 381 (Minn. 1982). The agreement must also be free from duress. The facts in this case show that the agreement did not satisfy the common law tests.

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