Sunday, June 22, 2014

Post-Marital Agreements in Iowa - Inching Closer?

Iowa remains one of the few (if not last) hold-out state that doesn't permit post-marital agreements.  (Agreements that allow a married couple to plan the division of their assets by their own agreement and separate from some default protective rules.)  However, the Iowa Supreme Court has finally allowed enforcement of a post-marital agreement.  Sort of.

Herbert and Velma were married in Florida.  While they lived in Florida, they signed post-marital agreement which included certain limitations on rights of each spouse at the death of the other.  Florida permitted post-marital agreements.  After 14 years, they moved from Florida to Iowa.  (Quick aside: Really? I love Iowa and all, but moving to Iowa from Florida in the retirement years seems a little backwards.)

After moving to Iowa, Herbert passed away and Velma tried to do an "end around" the post-marital agreement and take a spouse's elective share.  I don't feel like going into an extensive analysis of the Iowa Court's ruling, but basically they said the contract was validly made in Florida and should have Florida laws applied to it and that there wasn't an Iowa public policy argument that should prevent the application of the post-marital agreement.  One of the key points to keep in mind here is that they lived in sunshine state for 14 years after they signed the agreement.

What was especially interesting in the Court's ruling were some of the comments that the court made that clearly indicated that they would like to see Iowa move to a point where post-marital agreements are allowed.  Unfortunately, there are a few key Iowa lawmakers that have refused to allow this change in Iowa law.

As we continue to have more and more second marriages, the role of a post-marital agreement can become even more important for couples choosing to make their own decisions and arrangements.  Refusing to allow adult couples the freedom to make these decisions needs to be changed.

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