SF 369 (LSB 1479SV (2) 85)

SENATE FILE 369

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO SSB 1196)

(COMPANION TO LSB 1479HV BY COMMITTEE ON JUDICIARY)

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 2013, 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 2013, 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 amendment to a premarital agreement made between present spouses, but only relating to post-death matters.
   c.  An agreement or an amendment to an agreement between present spouses, but only relating to post-death matters.
   2.  “Party” means a person who has entered into a marital agreement.
   3.  “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.
   1.
  4.  “Premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.
   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 2013, 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 2013, 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 2013, is amended to read as follows:
   596.4  Formalities.
   1.
  a.  A premarital
 
marital agreement must be in writing and, must be signed by both prospective spouses. It
 
parties, and must contain the date that each party signed the marital agreement. Each party’s signature must be witnessed or acknowledged by one of the following methods, as applicable:
   (1)  Witnessed by a competent person, as described in section 633.280, who, in the presence of the signing party, witnessed the signing of the agreement by the party or by another person acting on behalf of the party at that party’s direction.
   (2)  Acknowledged before a notarial officer within this state.
   b.  The witnessing or acknowledgment language may be in substantially the following form:
THIS DOCUMENT MUST BE EITHER WITNESSED OR ACKNOWLEDGED
WITNESS STATEMENT
I declare that the parties who signed this document are personally known to me, and that they signed this marital agreement in my presence. I further declare that I am at least sixteen years of age or older.

Witness #1: Signature: _______________________________ 

Date: _______________

Print Name: _____________________________________ 

Telephone: ________________

Address: __________________________________________________

Witness #2: Signature: _______________________________ 

Date: _______________

Print Name: _____________________________________ 

Telephone: ________________

Address: __________________________________________________

ACKNOWLEDGMENT
STATE OF IOWA, ____________ COUNTY, ss:

On this ____day of ________________(month), ____(year), the

said ____________________, and ____________________, known to me (or satisfactorily proven) to be the parties named in the foregoing instrument, personally appeared before me, a Notary Public, within and for the State and County aforesaid, and acknowledged that they freely and voluntarily executed the same for the purposes stated therein.
   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 execute all documents necessary to enforce the agreement.
    Sec. 6.  Section 596.5, Code 2013, is amended to read as follows:
   596.5  Content.
   1.  Parties
 
Subject to the limitations of a marital agreement between present spouses, which as specified in section 596.1, subsection 1, shall only relate 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 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 2013, 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 2013, 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.
   2.  Revocation severable.  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.
   3.  Amendment.  A marital agreement may be amended by a written agreement signed by both parties. An amendment is subject to the limitations of an amendment to a marital agreement which, as specified in section 596.1, subsection 1, shall only relate to post-death matters, and subject to the enforcement provisions of section 596.8.
   4.  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 2013, 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 2013, 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 2013, 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 2013, 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.  NEW SECTION.  596.11A  Scope of chapter —— bona fide purchasers and distribution of assets.
   1.  This chapter shall not affect adversely the rights of a bona fide purchaser for value to the extent that this chapter applies to a transfer or conveyance of property by a party to a marital agreement to a nonparty.
   2.  A financial institution, insurance company, investment company as defined in the federal Investment Company Act of 1940, 15 U.S.C. § 80a-3, or broker-dealer registered under the federal Securities Exchange Act of 1934, 15 U.S.C. § 78m et seq., may distribute any assets, in accordance with the terms of the contract with a party to a marital agreement or in accordance with any effective beneficiary designation without liability to either party to the marital agreement.
    Sec. 14.  Section 596.12, Code 2013, is amended to read as follows:
   596.12  Effective date
 
and applicability.
   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 and amendments to marital agreements entered into after marriage, this chapter takes effect July 1, 2013, and applies to any such amendments or agreements executed on or after that date.
    Sec. 15.  NEW SECTION.  598.20C  Marital agreements.
   Except as preempted by federal law, if a decree of dissolution, annulment, or separate maintenance is issued after a marital agreement is entered into in accordance with chapter 596, the marital agreement is voided by the issuance of the decree unless the marital agreement is retained and ratified by the decree.
    Sec. 16.  Section 598.21, subsection 5, paragraph l, Code 2013, is amended to read as follows:
   l.  The provisions of an antenuptial
 
a premarital agreement.
    Sec. 17.  Section 598.21A, subsection 1, paragraph i, Code 2013, is amended to read as follows:
   i.  The provisions of an antenuptial
 
a premarital agreement.
    Sec. 18.  Section 633.246A, Code 2013, 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 marital agreements which include premarital agreements, certain amendments to premarital agreements, and the creation of agreements or amendments to agreements between present spouses. An amendment to a premarital agreement or an agreement or amendment to an agreement between present spouses is effective only to the extent it relates to 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, provides for scope of the chapter regarding bona fide purchasers and distribution of assets, and makes conforming changes.
   The bill continues the applicability of the amended Code chapter to any premarital agreement executed on or after January 1, 1992, in accordance with the statutory provisions in effect as of the date of the premarital agreement. The bill does not modify the inapplicability of the Code chapter to 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, 2013, and applies to any such amendments or agreements executed on or after that date.
   The bill provides that except as preempted by federal law, if a decree of dissolution, annulment, or separate maintenance is issued after a marital agreement is entered into, the marital agreement is voided by the issuance of the decree unless the marital agreement is retained and ratified by the decree.
   The bill also makes conforming changes throughout the Code.