SF 2096 (LSB 5585SV (5) 83)

SENATE FILE 2096

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO SSB 3029)

A BILL FOR

An Act relating to marital agreements, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 249A.3, subsection 11, paragraph d, Code Supplement 2009, is amended to read as follows:
   d.  Unless a surviving spouse is precluded from making an election under the terms of a premarital marital agreement as defined in section 596.1, the failure of a surviving spouse to take an elective share pursuant to chapter 633, division V, constitutes a transfer of assets for the purpose of determining eligibility for medical assistance to the extent that the value received by taking an elective share would have exceeded the value of the inheritance received under the will.
    Sec. 2.  Section 596.1, Code 2009, is amended to read as follows:
   596.1  Definitions.

   As used in this chapter:

   1.  “Marital agreement” means any of the following:
   a.  A premarital agreement.
   b.  An agreement between present spouses, but only relating to post-death matters.
   c.  An amendment to a marital agreement.
   2.  “Party” means a person who has entered into a marital agreement.
   1.  3.  “Premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.
   4.  “Post-death matter” includes but is not limited to the disposition of the parties’ individually or jointly owned assets upon the death of either or both parties; the making of a will, trust, or other arrangements for the disposition of property upon the death of either or both parties; ownership rights in life insurance policies and retirement plans and the disposition of the death benefits of any such policy or plan; and the limitation or expansion of spousal elective shares pursuant to chapter 633, division V.
   2.  5.  “Property” means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.
    Sec. 3.  Section 596.2, Code 2009, is amended to read as follows:
   596.2  Construction and application.

   This chapter shall be construed and applied to effectuate its general purpose to make uniform the law with respect to premarital agreements.
    Sec. 4.  Section 596.3, Code 2009, is amended to read as follows:
   596.3  Short title.

   This chapter may be cited as the “Iowa Uniform Premarital

Marital Agreement Act”.
    Sec. 5.  Section 596.4, Code 2009, is amended to read as follows:
   596.4  Formalities.
   1.  A premarital marital agreement must be in writing and must be signed by both prospective spouses. It parties.
   2.  A marital agreement between present spouses must be signed by both parties prior to the filing of an action for dissolution of marriage, for legal separation, or for separate maintenance.
   3.  A marital agreement is enforceable without consideration other than the marriage.
   4.  Both parties to the a marital agreement shall must

execute all documents necessary to enforce the agreement.
    Sec. 6.  Section 596.5, Code 2009, is amended to read as follows:
   596.5  Content.
   1.  Parties Subject to the limitations of a marital agreement between present spouses only relating to post-death matters, parties to a premarital marital agreement may contract with respect to the following:
   a.  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.
   b.  The right rights of possession, ownership, or control, including but not limited to the rights to buy, sell, use, transfer, make a gift of, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property.
   c.  The disposition of property upon separation, dissolution of the marriage, death, or the occurrence or nonoccurrence of any other event.
   d.  The making of a will, trust, or other arrangement to carry out the provisions of the marital agreement.
   e.  The ownership rights in and disposition of the death benefit from a life insurance policy and the establishment of rights of beneficiaries to the benefits of such policy.
   f.  The rights and obligations in benefits available or to be available under an employee benefit or retirement plan, except to the extent federal law prevents a binding agreement with respect to such rights and obligations.
   f.  g.  The choice of law governing the construction of the marital agreement.
   g.  h.  Any other matter, including the personal rights and obligations of the parties, not in violation of public policy or a statute imposing a criminal penalty.
   2.  A marital agreement is not enforceable unless the agreement contains a statement of the types of rights that could be affected by the marital agreement in an all capital letter typeface and font size as large as the largest typeface and font contained in the document. The following statement or a statement of like import, contained within the document shall be acceptable for this purpose:

   “BE ADVISED, BY SIGNING THIS DOCUMENT, YOU MAY BE GIVING UP LEGAL RIGHTS, SUCH AS THE RIGHTS TO OWN OR OCCUPY YOUR HOMESTEAD, RIGHTS TO A STATUTORY SHARE OF YOUR SPOUSE’S ASSETS UPON DEATH, RIGHTS TO COURT DETERMINATIONS OF DISTRIBUTIONS OF PROPERTY UPON DISSOLUTION OF MARRIAGE, AND OTHER RIGHTS YOU MAY HAVE BY REASON OF MARRIAGE. YOU MAY ALSO BE EXPANDING OR RESTRICTING THOSE TYPES OF RIGHTS OR EXPANDING OR RESTRICTING THE COURT’S POWERS TO DETERMINE THESE ISSUES.”

   2.  3.  The right of a spouse or child to support, whether during the lifetime or after the death of a party, shall not be adversely affected by a premarital marital agreement.
    Sec. 7.  Section 596.6, Code 2009, is amended to read as follows:
   596.6  Effective date of agreement.
   1.  A premarital marital agreement becomes effective upon the marriage, if signed by both of the parties prior to the marriage.
   2.  If a marital agreement is signed by the parties during their marriage, the marital agreement becomes effective on the effective date stated in the marital agreement. If no such effective date is stated in the marital agreement, the marital agreement becomes effective upon the latest date of signature by the parties.
    Sec. 8.  Section 596.7, Code 2009, is amended to read as follows:
   596.7  Revocation and amendment.
   1.  Revocation.  After marriage, a premarital marital

 agreement may be revoked, in whole or in part, only as follows:
   1.  a.  By a written agreement signed by both spouses

parties. The revocation is enforceable without consideration.
   2.  b.  To revoke a premarital By either party to the

 marital agreement without the consent of the other spouse party, the person seeking revocation must prove one or more if the party seeking revocation proves any of the following:
   a.  (1)  The person party seeking revocation did not execute the marital agreement voluntarily.
   b.  (2)  The marital agreement was unconscionable when it was executed.
   c.  (3)  Before the execution of the marital agreement the person party seeking revocation was not provided a fair and reasonable disclosure of the property or financial obligations of the other spouse party; and the person party seeking revocation did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other spouse party; and such disclosure would have been material to the decision of the party seeking revocation to execute the marital agreement.
   (4)  Before the execution of the marital agreement the party seeking revocation was not given a reasonable opportunity to obtain independent legal representation with respect to the marital agreement.
   c.  If the revocation of one or more provisions of the marital agreement, or the application of the revocation of such a provision to a party is upheld by the court, any revoked provision shall be severed from the remainder of the marital agreement, unless the marital agreement states otherwise, and shall not affect the remaining provisions.
   2.  Amendment.  A marital agreement may be amended by a written agreement signed by both parties. An amendment is subject to the enforcement provisions of section 596.8.
   3.  Limits on amendment and revocation.  A marital agreement cannot be amended or revoked by an agent, guardian, conservator, or other legal representative of either party, or after the death of either party, except as provided pursuant to subsection 1, paragraph “b”, relating to revocation without the consent of the other party.
    Sec. 9.  Section 596.8, Code 2009, is amended to read as follows:
   596.8  Enforcement.
   1.  A premarital marital agreement is not enforceable if the person or party against whom enforcement is sought proves any of the following:
   1.  The person did not execute the agreement voluntarily.
   2.  The agreement was unconscionable when it was executed.
   3.  Before the execution of the agreement the person was not provided a fair and reasonable disclosure of the property or financial obligations of the other spouse; and the person did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other spouse that such person or party could have revoked the marital agreement pursuant to section 596.7, subsection 1, paragraph “b”, relating to revocation without consent of the other party.
   2.  If a provision one or more of the provisions of the marital agreement or the application of the provision to a party is found determined by the court to be unenforceable pursuant to this section, the unenforceable provision shall be severed from the remainder of the marital agreement, unless the marital agreement states otherwise, and shall not affect the remaining provisions, or application, of the agreement which can be given effect without the unenforceable provision.
   3.  Other than the determination of the issue of unconscionability, actions with respect to enforcement of a marital agreement shall be decided by the court as a matter of equity.
    Sec. 10.  Section 596.9, Code 2009, is amended to read as follows:
   596.9  Unconscionability.

   In any action under this chapter to revoke or enforce a premarital marital agreement the issue of unconscionability of a premarital marital agreement shall be decided by the court as a matter of law.
    Sec. 11.  Section 596.10, Code 2009, is amended to read as follows:
   596.10  Enforcement —— void marriage.

   If a marriage is determined to be void, an agreement that would otherwise have been a premarital marital agreement is enforceable only to the extent necessary to avoid an inequitable result.
    Sec. 12.  Section 596.11, Code 2009, is amended to read as follows:
   596.11  Limitation of actions.

   Any statute of limitations applicable to an action asserting a claim for relief under a premarital marital agreement is tolled during the marriage of the parties to the agreement. However, equitable defenses limiting the time for enforcement, including laches and estoppel, are available to either party.
    Sec. 13.  Section 596.12, Code 2009, is amended to read as follows:
   596.12  Effective date.
   1.  This As it relates to premarital agreements, this chapter takes effect on January 1, 1992, and applies to any premarital agreement executed on or after that date, in accordance with the statutory provisions in effect as of the date of the premarital agreement. This chapter does not affect the validity under Iowa law of any premarital agreement entered into prior to January 1, 1992.
   2.  As it relates to amendments to premarital agreements and to marital agreements entered into after marriage, this chapter takes effect July 1, 2010, and applies to any such amendments or agreements executed on or after that date.
    Sec. 14.  Section 633.246A, Code 2009, is amended to read as follows:
   633.246A  Medical assistance eligibility.

   Unless precluded from doing so under the terms of a premarital marital agreement as defined in section 596.1, the failure of a surviving spouse to make an election under this division constitutes a transfer of assets for the purpose of determining eligibility for medical assistance pursuant to chapter 249A to the extent that the value received by making the election would have exceeded the value of property received absent the election.
EXPLANATION
   This bill amends Code chapter 596 (premarital agreements) to allow for the amendment of premarital agreements and the creation of new marital agreements by the parties to the marriage. A marital agreement between present spouses is effective only to the extent it relates to disposition of assets upon the death of the other party (post-death matters). The bill provides for protection of the parties including that the agreement must not be unconscionable at the time it is entered into; the agreement must include a provision that states the rights a party may be giving up; an agent is prohibited from amending or revoking a marital agreement on behalf of a party; and unconscionability is determined by the court as a matter of law while all other matters are determined in equity. The bill provides for revocation and amendment of marital agreements, places limits on amendments and revocations of marital agreements, provides for enforcement, and makes conforming changes.
   The bill provides that as it relates to premarital agreements, the amended Code chapter takes effect on January 1, 1992, and applies to any premarital agreement executed on or after that date, in accordance with the statutory provisions in effect as of the date of the premarital agreement. The bill directs that the Code chapter does not affect the validity under Iowa law of any premarital agreement entered into prior to January 1, 1992. Additionally, the bill provides that as the Code chapter relates to amendments to premarital agreements and to marital agreements entered into after marriage, the amended Code chapter takes effect July 1, 2010, and applies to any such amendments or agreements executed on or after that date.