Does Montana recognize Postnuptial agreements?
A postnuptial agreement is a written contract created by two people after they are married. The agreement typically lists all of the couple's property, including assets, liabilities, income and expectations of gifts and inheritances, as well as their post-marital debts. A postnuptial agreement specifies how post-marital property, as well as the appreciation, gains, income, rentals, dividends and proceeds of such property, should be distributed in the event of death, separation or divorce. It will generally be upheld by the court if it was entered into knowingly, freely, and fairly. It may be invalidated if dishonesty, fraud, coercion, or duress is involved. The spouses should disclose their assets and debts in writing and have the opportunity to consult an independent attorney.
The following is a Washington case dealing with a post-marital agreement:
In the Matter of the Marriage of DONNA LYNN ZIER, Appellant, and KELLY
GLEN ZIER, Respondent.
The Court of Appeals of Washington, Division Three.
November 21, 2006.
Nature of Action: Action to dissolve a marriage.
Superior Court: The Superior Court for Spokane
County, No. 03-3-02084-1, Maryann C. Moreno, J., on April 15,
2005, entered a judgment dissolving the marriage and
dividing the parties' property. The court evenly divided shares
of stock that the parties owned separately and as a community.
Court of Appeals: Holding that the trial court
properly considered a status agreement between the parties in
dividing the shares of stock evenly between them, that the
shares of stock were sufficiently "delivered" to constitute a
completed gift to the community, and that the status agreement
was not rendered void by the fact that each party did not
receive independent counsel before signing the agreement, the
court affirms the judgment.
Mary E. Schultz, for appellant.
Jeff A. Morris and Scott A. Morris (of
Morris & Morris, P.S.), for respondent.
¶1 — This is a marriage dissolution property
division dispute between Donna Zier and Kelly Zier. Ms. Zier's appeal
centers on whether the trial court erred in deciding the
parties converted separate property stock into community
property when they executed a status agreement despite a
stockholders' agreement restriction. The evidence shows the
parties knowingly, and without objection from key shareholders,
executed the status agreement and considered it binding between
them. Because the trial court did not abuse its discretion in
making a just and equitable distribution of all property before
the court when ordering an equal division of the stock, we
¶2 The Ziers were married in 1986 and separated in 2002.
In 1992, they moved to Spokane where Ms. Zier's parents, Judith
and Bill Williams, the founders and majority
shareholders of Telect, Inc., resided. For estate planning
purposes and prior to the Ziers' relocation, the Williamses
began gifting shares of stock to their grandchildren, children,
and their children's spouses.
¶3 Before receiving shares, the recipients were required
to sign a stockholders' agreement, promising not to "sell,
transfer, assign, pledge, or otherwise encumber to another
stockholder, or anyone else, any of his shares of stock in the
Company unless such action is preapproved by the affirmative
vote of Stockholders who own at least sixty-six and two-thirds
percent (66 2/3%)." Ex. P-114 (Art. VII(A)). The agreement
further stated any lifetime transfer "shall be void." Ex. P-114
¶4 The Williamses gifted stock to Mr. Zier and Ms. Zier
separately, with Ms. Zier receiving the larger portion. Ms.
Zier purchased additional stock with dividends from the
existing stock. Telect grew very profitable, increasing the
Ziers' financial worth.
¶5 Concerned about estate tax ramifications, the Ziers
contacted Telect's corporate counsel, Scott Simpson. Mr.
Simpson offered to draft a status agreement similar to an
agreement between Ms. Zier's brother, Wayne Williams, Telect's
CEO (chief executive officer) and significant share-holder, and
his wife. Mr. Simpson explained the favorable tax consequences
to the Ziers of converting their separately owned shares of
stock to community property. Mr. Simpson testified he expressly
warned the Ziers the type of agreement they were contemplating
would immediately convert their separate property stock to
community property. He advised the Ziers to assume all of their
Telect stock would be divided equally should they get divorced.
Mr. Simpson counseled them not to sign the agreement if there
was a problem in their marriage. Ms. Zier refutes this.
¶6 On June 11, 1998, the Ziers signed an Agreement as to
the Status of Telect Stock, which stated, "all shares of stock
of TELECT, INC., a Washington corporation, owned by either of
them or standing in the name of either of them, shall be, and
is hereby declared to be, the community
property of the two of them." Ex. R-215. Mr. Simpson did not
advise either party to obtain independent counsel or that he
might have a conflict of interest. The Williamses later issued
9,339,405 shares of Telect stock to the Ziers in both names.
These shares were in exchange for the Ziers forgiving a
$1,494,304 debt owed by Telect.
¶7 After separating in December 2002, Ms. Zier petitioned
for dissolution in September 2003. At the time of the decree,
Ms. Zier had 6,509,586 Telect shares and Mr. Zier had 1,194,978
shares. The court characterized all the stock as community
property. The court found the parties' status agreement
evidenced their intent to gift to the community all shares
owned by them at the time the document was signed. Ms. Zier
unsuccessfully requested reconsideration. On Mr. Zier's request
for an order dividing the stock, the court awarded all shares
in Mr. Zier's name to him, all shares in Ms. Zier's name to
her, and the 9,339,405 shares in both names divided with
7,327,007 to Mr. Zier and 2,012,399 to Ms. Zier. The result was
an equal division of the disputed shares. Ms. Zier appealed.
¶8 The issue is whether the trial court erred in making a
fair and equitable property division after characterizing the
parties' Telect stock as community property.
¶9 Initially, Mr. Zier challenges Ms. Zier's standing to
challenge the validity of the status agreement. He also alleges
the issue is raised for the first time on appeal. The doctrine
of standing generally prohibits a party from asserting another
person's rights. Timberlane Homeowners Ass'n v. Brame,
79 Wn. App. 303, 307, 901 P.2d 1074 (1995). RAP 2.5(a)
generally precludes a party from raising an issue for the first
time on appeal. Since the parties developed an extensive record
of how they created and treated the status agreement between
themselves, and since we are not deciding corporate or third
party rights, we analyze the status agreement evidence in the
fair and equitable division context as did the trial court.
¶10 In a marriage dissolution, all property, both
community and separate, is before the court for distribution.
Friedlander v. Friedlander, 80 Wn.2d 293, 305,
494 P.2d 208 (1972). The trial court has broad discretion in
awarding property under RCW 26.09.080, and this court will
reverse only upon the appellant's showing of a manifest abuse
of discretion. In re Marriage of Kraft, 119 Wn.2d 438,
450, 832 P.2d 871 (1992). A court abuses its discretion if it
is exercised on untenable grounds or in an unreasonable manner.
In re Marriage of Gillespie, 89 Wn. App. 390, 398-99,
948 P.2d 1338 (1997).
¶11 We review de novo a trial court's property
characterizations. In re Marriage of Skarbek,
100 Wn. App. 444, 447, 997 P.2d 447 (2000). "Once established, separate
property retains its separate character unless changed by deed,
agreement of the parties, operation of law, or some other
direct and positive evidence to the contrary." Id.;
see also RCW 26.16.010. And, "the burden is on the
spouse asserting that separate property has transferred to the
community to prove the transfer by clear and convincing
evidence, usually a writing evidencing mutual intent."
Skarbek, 100 Wn. App. at 448. We review the court's
findings of fact for substantial evidence and the conclusions
of law de novo. In re Marriage of Dodd,
120 Wn. App. 638, 643, 86 P.3d 801 (2004).
¶12 Ms. Zier first contends the status agreement violated
the restrictive stockholders' agreement signed by the Ziers. In
construing a contract, we give great weight to the parties'
intent. In re Estates of Wahl, 99 Wn.2d 828, 830-31,
664 P.2d 1250 (1983). We read contracts as a whole and will not
read an ambiguity into a contract that is otherwise
unambiguous. Berg v. Hudesman, 115 Wn.2d 657, 669,
801 P.2d 222 (1990).
¶13 Stock purchase restrictions "are often employed to
enable shareholders in close corporations to control the
identity of their associates and maintain harmonious business
relationships." Rogers Walla Walla, Inc. v. Ballard,
16 Wn. App. 81, 91, 553 P.2d 1372 (1976). A transfer
which is unambiguous, clearly sets forth its terms, and is
executed by capable parties is enforceable. Rao v.
Rao, 2005-0059 (La.App. 1 Cir. 11/4/05), 927 So. 2d 356,
¶14 While the Ziers' status agreement transfers Ms. Zier's
individual ownership of her stock to the community, the record
contains evidence showing her brother Wayne, the corporate CEO
and extensive Telect shareholder, executed a similar status
agreement with his wife, Terina. Further, evidence derived from
Ms. Zier shows her parents, the major Telect stockholders,
approved of the arrangement. Given the Williamses' family
interest in tax avoidance, it is unsurprising they would
support the Ziers' tax planning effort as apparently was the
case for Wayne and his wife. In any event, the trial court did
not err in disregarding the restrictive stockholder agreement
under the circumstances. The evidence is overwhelming that the
Ziers intended to regard this particular asset as community
property for their individual estate planning purposes.
¶15 Moreover, a dissolution court's mischaracterization of
property is rarely a proper basis to reverse the court's
property distribution. Gillespie, 89 Wn. App. at 399.
This is because the dispositive inquiry of the court's property
distribution is that the court's decision "is just and
equitable under all the circumstances." Kraft,
119 Wn.2d at 450; see also In re Marriage of Davison,
112 Wn. App. 251, 259, 48 P.3d 358 (2002) ("the court is required
to make an equitable distribution, not an equal one"). Further,
although a court may characterize one or another asset as
separate versus community, all property before the court is
capable of division to reach a just and equitable result.
¶16 Here, the court divided the community shares in a
manner that each party received an equal share of the Telect
stock. The court expressed its intent in its conclusions of law
to divide the community estate equally. Given all, the court's
treatment of the Telect stock does not warrant reversal of the
court's property distribution. The court made a fair and
equitable disposition based upon consideration of all the
circumstances of the marriage.
¶17 Next, Ms. Zier contends the stock gifts failed for
lack of delivery. The elements of a completed gift are (1) an
intention of the donor to give, (2) a subject matter capable of
delivery, (3) a delivery, and (4) acceptance by the donee.
Sinclair v. Fleischman, 54 Wn. App. 204, 207,
773 P.2d 101 (1989).
¶18 Currently, only such delivery is required as the
nature of the thing given and the circumstances under which it
is given will permit, and so it is generally held the delivery
may be manual, constructive, or symbolic. McCarton v.
Estate of Watson, 39 Wn. App. 358, 364-65, 693 P.2d 192
(1984). No absolute rule exists as to what conduct will
constitute a sufficient delivery to support a gift in all
cases. Whether what was done was sufficient to constitute a
delivery depends on the nature of the property and the
attendant circumstances. Sinclair, 54 Wn. App. at 207.
¶19 Here, the Ziers entered into a status agreement
regarding stock they each owned separately. After the status
agreement, additional Telect stock was delivered in both names.
In Henderson v. Tagg, 68 Wn.2d 188, 412 P.2d 112
(1966), our Supreme Court held the donor of shares of stock is
not required to hand deliver stock certificates to his intended
donee in order to satisfy the legal requirements for a
completed gift as long as the corporation is aware of the
status agreement. Again, the evidence shows Wayne Williams,
Telect's CEO, and Ms. Zier's parents were aware of the
agreement and apparently supported it until Ms. Zier filed this
marriage dissolution. Accordingly, we hold the delivery
requirement of the gift was satisfied.
¶20 Lastly, Ms. Zier contends the status agreement was
void because she did not receive independent counsel,
analogizing a postnuptial agreement with a prenuptial
agreement. The validity of prenuptial agreements in this state
is based on the circumstances surrounding the execution of the
agreement. In re Marriage of Matson, 107 Wn.2d 479,
484, 730 P2d 668 (1986). "The bargaining positions of the
parties, sophistication of the parties, presence of independent
advice, understanding of the legal
consequences and rights, and timing of the agreement juxtaposed
with the wedding date are some of the factors involved in the
circumstances surrounding the document signing." Id.
¶21 We do not consider the execution of an item-specific,
postmarital community property agreement as analogous with a
prenuptial agreement. The arguments asserting comparability are
¶22 In re Estate of Catto, 88 Wn. App. 522, 528,
944 P.2d 1052 (1997) illustrates that the analogy is flawed or,
in any event, unhelpful to Ms. Zier. There, estate heirs
appealed the trial court's decision awarding most of the
property to the surviving spouse under a community property
agreement. The heirs asserted that the agreement was void
because the decedent was not represented by independent counsel
at the time of its execution. The heirs argued that because the
decedent was elderly and suffering from health problems when
the agreement was executed, the court should impose the
requirement for independent counsel. The court, however,
refused to require independent counsel without evidence that
the decedent failed to understand the agreement or was coerced
into signing it.
¶23 Here, Ms. Zier alleges she did not understand the
ramifications of the status agreement. However, Mr. Simpson
testified he explained in detail the effect of the agreement on
the parties' property during their lifetime. He specifically
warned the Ziers if problems existed in their marriage, they
should not sign it. The trial court specifically found Ms. Zier
not credible on this point. Credibility determinations are for
the trier of fact. Morse v. Antonellis, 149 Wn.2d 572,
574, 70 P.3d 125 (2003). Ms. Zier's assertion she would not
have chosen to enter into the agreement had she been given an
opportunity to talk to a different lawyer is unpersuasive.
Moreover, having signed the stockholders' agreement before the
status agreement, Ms. Zier had a nearly impossible burden of
showing fraud or mistake.
¶24 Mr. Zier requests attorney fees on appeal under RAP
18.9(a), arguing Ms. Zier's appeal is frivolous. An appeal is
frivolous "if there are no debatable issues upon which
reasonable minds might differ, and it is so totally devoid of
merit that there was no reasonable possibility of reversal."
Streater v. White, 26 Wn. App. 430, 435, 613 P.2d 187
(1980). In view of our analysis, we cannot say the issues were
not debatable. Therefore, attorney fees are denied.
KULIK, J., concurs.
¶26 SWEENEY, C.J. (dissenting)
We review de novo a trial court's characterization of
property to be divided in dissolution proceedings. In re
Marriage of Marzetta, 129 Wn. App. 607, 616, 120 P.3d 75
(2005), review denied, 157 Wn.2d 1009 (2006). Here, we
should review two agreements and we should answer two essential
questions. First, did Donna and Kelly Zier, by executing the
status agreement, intend to transfer their individual shares to
the community? The intent of the parties to an agreement is a
question of fact. See, e.g., In re Marriage of Boisen,
87 Wn. App. 912, 920-21, 943 P2d 682 (1997) (separation
agreement). Here, there is no serious dispute that the parties
did intend a transfer — what was separate property was
now owned by the community.
¶27 Second, does the plain language of Telect, Inc.'s
stockholders' agreement, signed by Donna and Kelly as a
condition of receiving their individual stock, preclude any
legally effective transfer without an affirmative vote of
66-2/3 percent of Telect shareholders? Again, the language
restricting stock transfers is plain. And we should not
disregard it. Wagner v. Wagner, 95 Wn.2d 94, 101,
621 P.2d 1279 (1980). Nor should we rewrite the agreement under the
guise of construing it. Id.
¶28 By the plain language of the agreement, no stock
transfer can occur without an affirmative two-thirds vote of
the shareholders. This means that neither Donna nor the court
can transfer Donna's separate ownership of her stocks to the
community based on tacit approval. The court made no finding of
shareholder approval for transferring Donna's ownership
interest to the marital community.
¶29 Therefore, the court erred as a matter of law in
(a) that the status agreement constituted an
effective transfer and
(b) that the court had the power to
effect a stock transfer that the parties themselves could not
The result was that the court mischaracterized separate
property as community property.
¶30 Now, until a judge correctly characterizes the
property in a dissolution action as community or separate, I do
not know how she can make any "fair and equitable"
distribution. Where the classification of stocks is crucial to
the distribution, "we must remand so the trial court may
exercise its discretion with the correct character of the
property in mind." In re Marriage of Shui,
132 Wn. App. 568, 587, 125 P.3d 180 (2005).
¶31 Here, the mischaracterized stock was this marital
community's major asset. I do not know how we can pass upon the
court's exercise of discretion when that discretion is based on
an error as to who owns what. Only when the property has been
correctly categorized as separate or community may the court
exercise its wide discretion to divide the property as seems to
the court to be fair and equitable. In re Marriage of
Brewer, 137 Wn.2d 756, 766, 976 P.2d 102 (1999).
¶32 I disagree with the statement that "a dissolution
court's mischaracterization of property is rarely a proper
basis to reverse the court's property distribution." Majority
at 46. The case cited for that proposition, In re Marriage
of Gillespie, does not say that. In re Marriage of
Gillespie, 89 Wn. App. 390, 399, 948 P.2d 1338 (1997). And
I can find no case that does say that.
¶33 There is some discussion in In re Marriage of
Shannon to the effect that we will affirm notwithstanding
a mischaracterization of property if we can divine that the
trial judge would have divided the property in the same way
despite the error. In re Marriage of Shannon,
55 Wn. App. 137, 141-43, 777 P.2d 8 (1989). The authority for that
statement is, for me, questionable. It is certainly at odds
with the pronouncements by our Supreme Court. Brewer,
137 Wn.2d at 766. But, even if it were correct, we have no
indication on this record that, if Donna Zier's separate
property had not been erroneously characterized as community
property, the judge would have divided the correctly identified
separate stocks in the same way. The judge may have. But she
may not. I do not know.
¶34 I, therefore, respectfully dissent. I would reverse
and remand to give the trial judge the opportunity to
reconsider the distribution of this property using the correct
characterization of the stock in light of the stockholders'
Review denied at 162 Wn.2d 1008 (2007).