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Prenuptial Agreements

Prenuptial agreements (also called antenuptial, premarital agreements, or prenups, for short) are contracts between future spouses, who are thinking about getting married. In America, they gained popularity in the eighties, but reportedly, even ancient Romans used them.

Why choose a prenup? California law regulates the mutual rights and obligations of spouses and domestic partners. However, some of these rights can be altered by agreement. If the spouses want to handle their property division during marriage or in the event of a dissolution, or death of a spouse differently than the default under the current state law, a prenuptial agreement might be an appropriate option for achieving the desired result.

A prenup only becomes effective upon marriage. Should the marriage be annulled, a premarital agreement might not be enforced at all, or only to a minimal extent. In respect to domestic partnerships, the date of registration is equivalent to the date of marriage.

To be valid, the premarital agreement must be in writing, and signed by both parties. A prenup can be modified or revoked after the couple is married, but again, only in writing, with signatures by both spouses. Notably, because of the special, intimate relationship husbands and wives share, any postmarital agreement gives rise to the presumption of undue influence. This presumption might provide advantage to a party seeking to invalidate a postnuptial agreement in court.

California Family Code establishes that the confidential, fiduciary relationship between spouses “imposes a duty of the highest good faith and fair dealing on each spouse.” The courts can penalize a breach of fiduciary duty by awarding the full value of an undisclosed asset upon divorce to the misled spouse. Fiduciary relationship does not yet exist between partners contemplating marriage. Thus, a presumption of undue influence does not apply to prenuptial agreements.

SCOPE OF PREMARITAL AGREEMENTS

Prenups can address matters such as interests of the future spouses in their separate or community property. Such interests include the right to buy, sell, lease, or mortgage real estate. Even the making of the will or a trust, or allocation of a death benefit from a life insurance policy can be validly limited by a prenuptial agreement. Frequently, and with the most notoriety, a prenup is invoked in the context of a separation or a divorce. A spouse, who would be under California law entitled to alimony following a divorce, can validly waive the right to future spousal support in a premarital agreement.

But, some important limitations exist regarding the subject matter of prenups: California statute expressly states that “[t]he right of a child to support may not be adversely affected by a premarital agreement.” Courts will only enforce provisions limiting spousal support, if the spouse whose rights are limited, had independent legal representation at the time of signing. Also, should the courts find the waiver of spousal support unconscionable, they will not allow it. An agreement between future spouses or future domestic partners may not violate criminal laws or public policy. So-called life-style clauses “curtailing visits from in-laws or how often you have sex” are usually not enforced by courts.

VALIDITY OF PRENUPS

In general, courts look upon premarital agreements favorably. But, there are situations, when the prenup will not be enforced: for example, if one of the spouses did not sign the agreement voluntarily. Coercion at signing, if proven, will invalidate the agreement. There are also some less apparent legal requirements that affect the validity of a prenuptial agreement. For the court to deem the signature was voluntary, the party presented with the prenup must either seek advice from an independent legal counsel, or must in writing waive the right to seek legal advice.

Under California law, the future spouse must be given at least seven days to consult a lawyer, before signing a prenuptial agreement. The spouses must provide each other with “fair, reasonable, and full” disclosure of their respective obligations and property, unless they waive the right to such information in writing. If a wife has no legal representation at signing, she must also be given appropriate explanation as to the contents of the prenup.

PRENUP: THE OPINIONS

A prenuptial agreement might produce some unexpected effects. There are those who believer that the requirement to bare it all and discuss the couple’s finances in full before the marriage forces honesty about things, which if undisclosed initially, might lead to a divorce down the road. As some financial liabilities cannot be effectively limited by a prenuptial agreement, the discussion about such debts induced by the required disclosures can prevent some headaches down the road.

There are also lawyers who find prenups “corrosive” with respect to a first marriage. This comment was made in the context of a debate over the high-profile Petrakis divorce, when a prenup was invalidated, due to involuntariness and fraud. In the same debate, one view proposed that “every married couple already has a prenup whether they want one or not. The laws covering marriage and divorce in every state are nothing more and nothing less than premarital agreements.”

THE LAW

For relevant California Statutes, please see The Uniform Premarital Agreement Act.

Speak with a Los Angeles Prenuptial/Postnuptial Agreement Attorney Today

At Fernandez & Karney, we have over 100 years of combined experience helping couples seeking a prenuptial or postnuptial agreement. We are Certified Family Law Specialists, which means you will have highly experienced attorneys working on your family law matter. Call today for a free consultation.