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Love, Divorce, Baseball, and Hutchinson Family Law Attorneys

by | Nov 23, 2018 | Family Law, Firm News, Hutchinson

Over the last six seasons, the Los Angeles Dodgers have won six division titles and two National League pennants. This recent success comes on the heels of almost two decades of futility. Between 1989 and 2007, the team only had three division titles and only won one playoff game. In the midst of all this losing, things got even worse.

After about ten years of losing, fan interest began to wane and the Dodgers fell on hard financial times. Supposedly, when the team filed bankruptcy in 2002, co-owners Frank and Jamie McCourt were unable to make payroll.

What does all this have to do with Hutchinson family law attorneys? We’re just getting to that. While the team was in bankruptcy court, its owners were in divorce court. As part of their divorce, they signed a voluntary property division agreement, which is similar to a premarital agreement. Since the team was essentially worthless at the time, Jamie gave up her half of the team in exchange for about $180 million in cash and property. Jamie was very unhappy a few years later when her ex-husband sold the team for over $2 billion.

Before we see what the court decided, let’s break down premarital agreements in both Minnesota and California. The law is roughly the same in both jurisdictions.

What Can Premarital Agreements Cover?

Premarital agreements are a little like insurance policies. No one wants or expects the house to burn down, but most owners get property insurance anyway. Similarly, no couple wants or expects to get divorced, but a premarital agreement is usually a good idea, especially if one spouse has been married before.

Many premarital agreements cover financial matters. That can include both classification and division matters. Assume Wife uses a wedding gift from her parents to fix up a rental house that Husband owned before the marriage. A McLeod County judge could declare that the house was marital property. In that case, Wife could be entitled to half the gift and half all prior and future rents. These pacts may also limit, or even eliminate, spousal support payments.

Financially, premarital agreements can cover pretty much anything except child support matters. This area depends on the best interests of the children and not on the best interests of the parents.

Many spouses who have been married before want to make provisions for children from prior marriages. That’s especially true if the spouse has a family business or significant estate. That person may not want these children to be left out of succession and inheritance matters. But unless a valid premarital agreement is in place, that’s probably what will happen.

How Can Hutchinson Family Law Attorneys Break Premarital Agreements?

Minnesota family law strongly favors spousal agreements. Divorces are a good example. If the parties agree on all matters, most McLeod County judges will approve the settlement after only a cursory hearing. So, it’s very difficult for Hutchinson family law attorneys to break premarital agreements. However, these pacts are not set in stone. In Minnesota, the grounds for overturning a premarital agreement are:

  • Lack of Representation: Voluntary divorce settlements are usually valid even if only one spouse had a lawyer. But the same is not true of premarital agreements. These pacts are invalid as a matter of law if each spouse did not have separate representation.
  • Complete Disclosure: All spouses must put all their cards on the table. If a spouse withholds important information, the agreement is probably no good. Challenging spouses who use this ground must normally also establish that the information was unavailable elsewhere.
  • Unconscionable: There is a difference between “uneven” and “unconscionable.” A 60-40 split, and maybe even a 70-30 split, is uneven but not grossly one-sided. Significantly for the Jamie McCourts of the world, the agreement must have been unconscionable when it was made. This issue comes up quite often with regard to stock options. These items may be worthless one day and incredibly valuable the next day.

Note that the challenging spouse need not establish fruadulent or malicious intent. But the presumption in favor of premarital agreements is quite strong. So, these challenges are much easier to win if a spouse has such evidence.

A Happy Ending(?) for Frank and Jamie

Jamie argued that the property agreement was unconscionable. After all, a resolution that leaves a person about $900 million short of a 50-50 split is blatantly one-sided. But the agreement was not unconscionable when it was made. “Jamie simply chose the security of a guaranteed $131 million payment, plus more than $50 million in real and personal property, over the uncertainty and risk presented by the valuation and sale of the Dodger assets,” the court stated.

So, Jamie lost her appeal and even had to pay her ex-husband’s attorneys’ fees. However, the prominent Republican fundraiser later became the U.S. Ambassador to Monaco and France. That’s not an extra $700 million and change in the bank, but it is a rather nice consolation prize.

Work with Experienced Lawyers

People who are tying the knot again should seriously consider premarital agreements. For a free consultation with an experienced Hutchinson family law attorney, contact Carlson & Jones, P.A. We routinely handle matters in McLeod County and nearby jurisdictions.