Premarital Agreement: Is It Enforceable?

Not all premarital agreements are enforceable.  A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:

1. Such party did not execute the agreement voluntarily; or
2. The agreement was unconscionable when it was executed and, before execution of the agreement, that party:
   • Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
   • Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
   • Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

Moreover, the right of a child to support from either parent may not be adversely affected by a premarital agreement.  If you have a premarital agreement and waived child support or accepted a lower amount than you would receive pursuant to the Delaware Child Support Formula, this term is unenforceable. 

Consider scheduling an initial consultation with a family law attorney who specializes in this area to avoid any uncertainty about the enforceability of your premarital agreement.  

Premarital Agreement: Why Do I Need It?

Premarital agreements add certainty in the event of divorce.  These agreements can predetermine how marital and non-marital assets and debts will be distributed between the spouses and what alimony or spousal support will be paid.  They can also protect a spouse's assets from division and preserve them for the spouse's heirs. 

If you married without a premarital agreement, it is not too late.  You have the option of creating a postnuptial agreement to establish the same property and support obligations.

Consider scheduling an initial consultation with a family law attorney who specializes in this area to discuss your options. 

Premarital Agreement: What is It?

Controlled by Chapter 3 of Title 13 of the Delaware Code, a "premarital agreement" (or "PreNup" as it is often referred to in casual conversation) is an agreement between prospective spouses made in contemplation of marriage, and which becomes effective upon marriage.  A premarital agreement must be in writing and signed by both parties (notarized signatures is best practice).

Parties to a premarital agreement may contract with respect to:

1. The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
2. The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
3. The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
4. The modification or elimination of spousal support or alimony;
5. The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
6. The ownership rights in and disposition of the death benefit from a life insurance policy;
7. The choice of law governing the construction of the agreement; and
8. Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

There is one clear limit set by the Delaware Legislature on the parties' right to contract: the right of a child to support from either parent may not be adversely affected by a premarital agreement. 

After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties (notarized signatures is best practice).

Each party should retain an original, signed version of the premarital agreement for their records.

If you are getting marriage and have assets that need protecting, consider scheduling an initial consultation with a family law attorney who specializes in this area to draft your premarital agreement. 

Student Loans: Are They Marital Debt?

Section 1513 of Title 13 of the Delaware Code governs the disposition of marital property. In a proceeding for divorce or annulment, the Family Court shall, upon request of either party, equitably divide, distribute, and assign the marital property between the parties. This happens without regard to marital misconduct, in such proportions as the Court deems just after considering all relevant factors. 

"Marital property" is defined by statute. It includes all property acquired by either party subsequent to the marriage, irrespective of how it is titled, with certain enumerated exceptions. Those exceptions include gifts, except gifts between spouses, property acquired in exchange for property acquired prior to the marriage, property excluded by valid agreement of the parties, and the increase in value of property acquired prior to the marriage.  

The Family Court has consistently interpreted marital property to include both assets and debts. Accordingly, debts incurred by either party subsequent to the marriage, irrespective of how it is titled, may be divided by the Family Court ancillary to a divorce or annulment upon the request of either party. Marital debts can include mortgages, home equity loans, vehicle loans, loans against 401(k) plans, credit card debts, personal loans, and, yes, even student loans taken out in a spouse's name for his or her personal benefit or the benefit of his or her children.  

While the Court has discretion on how to divide a student loan debt, i.e. the percentage distribution between the parties, make no mistake, it will be considered part of the marital estate. That is, unless the parties have a valid agreement stating otherwise.

Spouses can reach an agreement as to how to divide certain assets and debts at any time -- prior, during or after the marriage. It is important to consult with an experienced lawyer to draft your agreement because not all contracts are deemed enforceable. You can click here and send us an email if you have questions about drafting a valid agreement for division of assets and/or debts. 

Legislative Amendments to Child Support Law

Governor Jack Markell recently signed into law two bills that impact child support in the State of Delaware.  Below is an explanation of the changes and how they may impact your right to receive child support or obligation to pay child support.

House Bill 131 was signed into law by Governor Markell on July 29, 2016.

The purpose of HB 131 is to strengthen and update the civil enforcement section of the Delaware Code relating to child support and medical support (13 Del. C. § 513). In most situations there is a court-ordered withholding order, which is also known as a wage attachment.  

For those situations where there is no order, this section allows a person who is owed child support to obtain a withholding order upon sending notice to the Family Court that the child support payments are more than one month late. If the existing order does not include payment on arrears or if the ordered payment on arrears is less than 20% of current support, then the income attachment shall be issued in the amount of current support plus an amount payable toward arrears of up to 20% of the current support order or $20 per month, whichever is greater.

If the existing medical support order does not include an attachment for payment of health insurance coverage for the child, payment for his or her share (if any) for premiums of health insurance coverage shall be added to the attachment.   

House Bill 174 was signed into law by Governor Markell on July 29, 2016.

The purpose of HB 174 is to ease the requirements for a party seeking to modify a child support order (increase or decrease) (13 Del. C. § 513). The Bill provides for two significant changes.

First, it allows the Division of Child Support Enforcement ("DCSE") to be a party to a petition for modification of child support. This is significant because the DCSE is now subject to the same conditions as the parents in the action. 

The second change is made to the requirements for giving notice to the opposing party. The Bill only requires notice by regular mail (versus certified or registered mail) to the opposing party's last known address. Said notice is effective on the date of delivery, or first attempted delivery, or three days after posting (if by regular mail), whichever first occurs. This is significant because any upward or downward modification of child support can be made retroactive to three days after posting by regular mail. Plus this should alleviate issues regarding obtaining proper service on the opposing party. 

Top 5 Changes to Delaware Child Support Formula, Effective January 1, 2015

The Child Support Formula used by the Family Court in the State of Delaware to calculate a parent’s child support obligation is updated every four years, with the most recent revisions going into effect on January 1, 2015. It is important to know how the Child Support Formula has changed to understand how it may impact your family situation. You can then make an educated decision about whether to file a Petition for Modification of Child Support, based on the most recent updates.

Every 2.5 years, either parent may file a petition to modify child support, seeking either an increase or decrease in the support obligation. If your child support order was issued within the last 2.5 years, a petition to modify child support may be filed only if there has been a "substantial change in circumstances" through no fault of the petitioning parent and so long as the resulting obligation increases or decreases by 10% or more. Substantial changes include changes to income, health insurance cost or availability, daycare or private school tuition, number of minor children ordered to support, or the number of other minor children to support. Leaving a second job is not a substantial change in circumstance.  

The Child Support Formula is a rebuttable presumption. Every new petition is initially scheduled for mediation, unless there is a history of domestic violence between the parents. The mediator will run a child support calculation, inputting the parents’ income and deductions into the Child Support Formula. If no agreement is reached, a hearing before a commissioner is scheduled.  The commissioner will take evidence on the parties’ income and deductions and run a child support calculation using the Child Support Formula, just like the mediator before him or her. Only in rare circumstances has the Family Court found that a parent has successfully rebutted the presumption of the Child Support Formula over the other parent’s objection and entered a child support obligation based on something other than the Child Support Formula.   

The Child Support Formula is evaluated and updated every four years, with the most recent updates going into effect January 1, 2015. The Family Court will use the revised Child Support Formula to calculate any child support order entered after January 1, 2015, irrespective of whether it is a Petition for Support or a Petition for Modification of Child Support. Here are some of the significant changes in 2015:

• A parent now receives the same allowance for supporting one minor child who is not at issue in the support order as two or more children. The Child Support Formula has long recognized adjustments for support that parents provide to other minor children who are not of the current union. The Child Support Formula reduces the amount of available income a parent has to support the child(ren) at issue in the petition by taking into consideration other minor child(ren) a parent may have from other relationship(s). Prior to this revision, the Court multiplied the parent's available income by 83% if there was one other child, 73% if there were two other children, and 67% for three or more children. Under the revised Child Support Formula, a 70% adjustment is made for one or more other children.   

• The number of overnights to trigger a "parenting time adjustment" for the support payer has been revised. Prior to January 1, 2015, a parent may be entitled to a 10%, 20%, 30%, or 40% adjustment to his/her support obligation based on the number of overnights the child(ren) spend(s) with the parent. The requirement for a parenting time adjustment has been simplified under the revised Child Support Formula to the following: 80 to 124 overnights per year for a 10% adjustment and 125 to 163 overnights per year for a 30% adjustment. The revisions allow parents more flexibility with the visitation schedule without fear of implicating the child support order. The revised Child Support Formula also lowered the number of overnights to establish "shared placement" from 175 to 164 per year.

• The revised Child Support Formula eliminates "de minimis" orders of support in shared placement arrangements. In cases where parents have equal incomes and allowable expenses, no support is paid by either parent to the other. With near-equal income, the result can be a very low “net” order that one parent is required to pay the other. In light of the administrative cost of collecting and disbursing these amounts, and the minimal benefit the children derive from their payment, an obligation of less than $50 per month is considered "de minimis" and the Court will enter a zero order.

• Every parent will be presumed to have a minimum monthly gross earning capacity of not less than $8.25 per hour, 40 hours per week ($1430 per month) as of January 1, 2015. Except for shared placement arrangements, a minimum order for one child is now $100 per month and two or more children is $160 per month. The "minimum gross earning capacity" is adjusted biannually to remain consistent with minimum wage.

• There is no longer a requirement that the support recipient pay the first $350 of unreimbursed medical expenses annually. Except where parents share placement of their child(ren), the child support recipient was previously responsible for the first $350 of the child(ren)’s unreimbursed medical expenses each calendar year. The remainder was divided between the parties pursuant to their respective primary percentage shares of total net available income. The Court felt this created difficult accounting issues for parents with little added benefit. The revised Child support formula now issues responsibility for all unreimbursed medical expenses in accordance with the primary shares, as is the current practice for parents sharing placement of their children.

You should consult with an attorney to see if you would benefit from a modification of your current support order based on the newly revised Child Support Formula. The Family Court also provides an online tool to give you an idea of what your child support payment may be under the newly revised Formula.