A Premarital

A premarital, sometimes called an antenuptial or prenuptial, agreement, is a written agreement between two people prior to marriage as to what their property and possibly support rights will be when their marriage ends.

The first thing you must understand about these agreements is that they are very important, very powerful, and unless overturned, will control the distribution of property when the marriage ends. The Supreme Court in In re Marriage of Bonds (2000) 24 Cal.4th 1, 99 Cal.Rptr.2d 252, 5 P.3d 815, stressed that the adoption of the Uniform Premarital Agreement Act in California was a step designed to make such agreements easier to enforce:

"The language adopted was intended to enhance the enforceability of premarital agreements and to convey the sense that an agreement voluntarily entered into would be enforced without regard to the apparent unfairness of its terms, as long as the objecting party knew or should have known of the other party's assets, or voluntarily had waived disclosure."

After Bonds was decided, the Legislature weighed in with SB78, which was enacted into law effective 1/1/2002. This legislation put substantial restrictions and procedural requirements on premarital agreements. These include:

  • Advisement to seek legal counsel: Family Code §1615 (c)(1) was added which deems an agreement not to have been executed "voluntarily" unless "the party against whom enforcement is sought was represented by independent legal counsel at the time of signing the agreement or, after being advised to seek independent legal counsel, expressly waived, in a separate writing, representation by independent legal counsel."
  • Time to study agreement: Family Code §1615 (c)(2) requires the court to "deem" that the Agreement was not executed voluntarily unless the party against whom it is going to be enforced had "not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed." This applies whether the party is represented or not.
  • Advising as to effect of agreement: Family Code §1615 (c)(3) requires that an unrepresented party be "fully informed of the terms and basic effect of the agreement as well as the rights and obligations he or she was giving up by signing the agreement." This must be in writing and presented in advance of the signing of the Agreement.
  • Proficiency in English: Family Code §1615 (c)(3) requires that the written explanation and agreement be in a language in which the unrepresented party is "proficient."
  • Full disclosure of assets and debts (unless waived): Family Code §1615 (a)(2)(A) was amended to state that one of the requirements for showing unconscionability is the failure of the other party to provide: "a fair, reasonable and <> disclosure of the property or financial obligations."

Despite these restrictions, premarital agreements remain viable tools.

The next thing to be aware of is that all marriages must end, as a matter of law. If they do not end by an annulment or divorce, they end by the death of one of the spouses. Thus, it is highly likely that the terms of the premarital agreement will eventually come into play in determining the character of the parties' assets and obligations.

Whether a premarital agreement is appropriate for the parties depends upon their circumstances and the purposes that the agreement is to serve.

With the exception of matters relating to children of the marriage, so long as they don't intrude into certain narrow areas that are deemed contrary to public policy these agreements may cover almost the entire gamut of the parties' financial relationship, including spousal support in the event of a dissolution of marriage.

A premarital agreement is not appropriate for every couple. Initially, most people don't need a premarital agreement, as they start out in life with little in the way of assets and relatively low earning ability. Second marriages or marriages later in life are different. Here, most family law attorneys recommend premarital agreements as they can not only protect premarital property but, in many cases, can greatly reduce the cost of attorney's fees that might be incurred fighting about the character of that property should there be a divorce.

If the purpose of the premarital agreement is to protect property acquired during the marriage from community property claims of a spouse, then an agreement is definitely required. Generally, it will be the party with the higher earning potential and/or more property who will want the agreement. However, this is not always true. A wealthy man or woman who has transferred his or her property into trusts for the benefit of his/her heirs and is living off of their income, may not care about a premarital agreement. In fact, s/he may even resist one, as it would force him/her to fully disclose this to his/her spouse. Here, it might well be the "weaker" party who seeks the protections that could be provided through a premarital agreement.

Protecting one's property for children of a former marriage is a common reason for a premarital agreement. A well-drawn premarital agreement can prevent unseemly and expensive lawsuits between the surviving spouse and the deceased's heirs. It can also protect one party from his or her spouse's attempts to set aside gifts that the party may have made to his/her children or other third parties during marriage.

Another important function is protecting against the premarital debts and obligations of one of the spouses. For example, if the husband is coming into the marriage with outstanding tax liabilities, support obligations to a former spouse or children, a pending lawsuit, debts to other creditors, or other such real or potential obligations, a premarital agreement may be helpful in protecting the new spouse's property or earnings from the other spouse's creditors.

Premarital agreements can provide a comprehensive plan for property division or they can deal with just one or a few assets. For example, if the parties want to specify how a house owned by one of them prior to marriage will be dealt with, that would be a proper subject for a premarital agreement. Likewise, if they want to agree how all of their property will be divided in the event of death or divorce, that's okay too.

Premarital agreements can also provide certainty as to the law that will be applied to the property division when the marriage ends. One of the most constant features about California marital property law is that it is constantly in a state of flux. With a premarital agreement, the parties can have certainty in the division of their property by protecting themselves from changes in the law or changes in their attitudes.

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