Drafting prenuptial agreements, particularly for your high-asset clients, likely is a major part of your practice as a family law attorney. As always, here, too, the advanced financial knowledge and skills you gained by earning your CFL Designation for Divorce Practitioners allow you to competently handle whatever financial issues your clients wish to include in their respective prenups. Be careful, however, about including provisions regarding waiver of attorney’s fees in the event of an eventual divorce, even if both parties wish to include such provisions. Such provisions could come back to haunt you if an original prenup client seeks your representation years later in his or her divorce.

The Supreme Court of Iowa recently addressed the issue of if, how, and to what extent a prenup waiver provision should in fact apply when the couple later divorces. The case was In Re the Marriage of Jodi Lynn Erpelding and Timothy John Erpelding.

Here the parties explicitly stated in their prenuptial agreement that, in the event of an eventual divorce, neither of them could seek an award of attorney’s fees. Five days later, they married, and 18 years after that, Ms. Erpelding filed for a dissolution. The couple litigated the following issues:

  • Child custody
  • Child support
  • Spousal support
  • Attorney’s fees

Trial and Appellate Court Holdings

The district court declined to give Jodi the attorney’s fees for which she asked, stating that “[i]n the absence of any articulated public policy of the state of Iowa, the Court thinks it does not have authority to ignore the plain language of the parties’ prenuptial agreement.” Jodi appealed, arguing that the Iowa Uniform Premarital Agreement Act (IUPAA) prohibits premarital agreement provisions that waive the right to attorney’s fees arising from issues of child custody, child support, and spousal support by virtue of the fact that it prohibits premarital agreements from limiting the right to child and spousal support themselves.

The court of appeals agreed with Jodi and reversed the district court’s judgment, holding that “the provision in the Erpeldings’ premarital agreement waiving [attorney] fees and costs is void and unenforceable as to child-related issues because it violates Iowa ‘public policy by discouraging both parents from pursuing litigation in their child’s best interests.’” Not surprisingly, Tim appealed to the Iowa Supreme Court.

Supreme Court Ruling

Noting that the appropriate review standard of a denial of attorney’s fees is one of abuse of discretion by the court, the Supreme Court interpreted Section 596.12 by comparing the provisions of the IUPAA, codified in Iowa Code Section 596.12, with the provisions of the Uniform Premarital Agreement Act (UPAA) upon which the IUPAA was modeled.

With regard to the spousal support issue, the Court found the following differences between the two:

  • The IUPAA explicitly protects the right to spousal support against waiver, whereas the UPAA explicitly does not.
  • The IUPAA imposes a duty on both parties to “execute all documents necessary to enforce the agreement,” whereas the UPAA does not.
  • The IUPAA establishes more grounds for claims of unenforceability of premarital agreements than the UPAA.

The Court concluded that:

[O]ur comparison of features of the IUPAA and the UPAA reveals the IUPAA’s tendency toward providing more protection to vulnerable parties. As children and financially dependent spouses are vulnerable parties, it is logical to conclude we should interpret IUPAA provisions explicitly protecting children or dependent spouses consistently with such provisions’ purpose: the protection of vulnerable parties.

The Court likewise declined to find a basis to prohibit the attorney fee waiver provision in the parties’ premarital agreement regarding attorney’s fees for the child custody issues the couple had litigated at trial. It consequently affirmed in part and vacated in part, remanding the case to the district court “to determine the amount, if any, of trial attorney fees and costs Jodi is entitled to for the child custody, child support, and spousal support issues litigated in the dissolution matter in the district court. The district court should also determine the amount of appellate attorney fees Jodi is entitled to for the child custody, child support, and spousal support issues.”

For more information on how gaining your CFL Designation for Divorce Practitioners gives you the financial knowledge and skills you need to attract additional high-asset clients, plus other benefits of AACFL membership, please visit this page of our website.