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PREMARITAL AGREEMENTS - IS THERE EVER A GOOD TIME TO REQUIRE SUCH AN
AGREEMENT?
By:
Robert C. Brandt, Certified Specialist - Family Law (The State Bar
of California, Board of Legal Specialization), of
Feinberg, Mindel, Brandt &
Kline, LLP
In our progressive society, it has become recently common for men and
women intending to marry to require that there be a written agreement
prior to the date of marriage. Often the intent of one party requesting
the writing is to avoid the same type of problems that party may have
encountered from a prior marital divorce in which he or she was required
to turn over significant sums of money and/or to pay support to the
other. In other situations, one party may be concerned about preserving
family assets or property owned before the marriage. Based upon recent
changes in the law, a party may also want to limit future exposure
relating to spousal support.
Currently, California law generally provides that properties and/or
assets earned or received between the date of marriage and the date of
separation are presumed to be community. This means that in the event of
a divorce all such assets are to be equally divided. The law also
provides that a party to a divorce or legal separation proceeding can
seek alimony or spousal support from the other. Under current law,
subject to full and complete disclosure as well as compliance with
statutory requirements, parties can make contracts prior to marriage
which will affect their obligations in the event of a divorce or
separation.
The current statutes with regard to premarital agreements are found in
Family Code Section 1600 and its subparts. If a party to a marriage is of the
inclination to require a written contract with the other party prior to
marriage it is most important to move forward as quickly as possible as
there are timing requirements. If a Premarital Agreement is prepared and
executed by the parties without compliance with statutory requirements
the agreement may very well be subject to unenforceability and could be
set aside in the event of a divorce or legal separation proceeding by
one party based upon the failure of both parties to execute and prepare
the Premarital Agreement in a timely fashion and with respect to other
requirements.
A Premarital Agreement is enforceable if the following factors are
shown:
That the party against whom enforcement is sought proves that he or she
did not execute the agreement voluntarily or that the agreement was
unconscionable when it was executed and before execution all of the
following apply to that party:
1. The party was not provided a fair, reasonable and full disclosure of
the property or financial obligations of the other.
2. That the party did not voluntarily and expressly waive, in writing,
any right to the disclosure of the property or financial obligations of
the other party beyond the disclosure provided.
3. That party did not have or reasonably could not have had, an adequate
knowledge of the property or financial obligations of the other party.
It is also important to note that if one party seeks to set aside the
Premarital Agreement in the event of a divorce or legal separation
proceeding, typically the court will find that the Premarital Agreement
was not executed voluntarily unless all of the following is found:
a. The party against whom enforcement is sought was represented by
independent counsel at the time of the signing of the agreement or,
after being advised to seek independent legal counsel, expressly waived,
in a separate writing, representation by independent counsel.
b. The party against whom enforcement is sought had not less than seven
(7) calendar days between the time that party was first presented with
the agreement and advised to seek independent legal counsel at the time
the agreement was signed.
c. The party against whom enforcement is sought if unrepresented by
legal counsel was fully informed of the terms and basic effect of the
agreement, understood the language, and acknowledged having understood
the language and terms of the agreement.
d. That the agreement was not executed under duress, fraud or undue
influence and that the parties did not lack capacity to enter into the
agreement.
In situations where a waiver of spousal support is required, the Family
Code specifically provides, in pertinent part, that any provision in a
Premarital Agreement regarding spousal support, including, but not
limited to, a waiver of support, is not enforceable if the party against
whom enforcement of the spousal support provision is sought was not
represented by independent counsel at the time the agreement containing
the provision was signed, or if the provision regarding spousal support
is unconscionable at the time of the enforcement.
There are a number of other requirements that may need to be complied
with in order to make certain that the Premarital Agreement is binding.
The reader should not assume that the information contained herein is
inclusive of all the rules to be followed.
Clearly, there are specific and, for the most part, intricate
requirements with regard to securing an enforceable premarital agreement
that will withstand the test of time and the change in the law. While a
litigant is not required to retain legal counsel with regard to
proceeding forward with divorce and/or legal separation proceedings, the
law currently indicates that it is far preferable to have the benefit of
independent legal counsel representing a party with respect to the
execution of a Premarital Agreement. While the execution of a Premarital
Agreement is certainly not the most romantic transaction a party can
engage in prior to marriage, a full and complete understanding of the
process may help to lessen the tensions of dealing with future financial
issues rather than solely deciding where the wedding ceremony will be
held, who will be invited and what will be on the wedding menu.
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