In recent years, we have seen a significant increase in the number of engaged couples deciding to conclude premarital agreements. Also called a prenuptial agreement, these agreements are contracts between future spouses who are thinking about getting married.
In the past, premarital agreements were typically used in situations in which one party had significantly more assets than the other party. More recently, couples from across the income spectrum are choosing to conclude premarital agreements.
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.
Drafting A Prenup That Will Hold Up In Court
A premarital agreement is a way to circumvent or modify California’s community property laws, but a mistake when drafting an agreement can render it invalid. At our law firm, we have experience and take great care when preparing premarital agreements; working diligently to protect our clients’ rights.
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.
For a premarital agreement to be valid under California law:
- Each party must have their own lawyer or be notified and given an opportunity to retain a lawyer.
- There must be full disclosure by both parties of their respective assets and debts.
- There must be no coercion or pressure during the process.
- Sufficient time must be provided from the presentation of the premarital agreement until the date it is signed so that each party can review the document and consult with counsel.
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 premarital agreement gives rise to the presumption of undue influence.
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.
That last point is very important. Do not wait until the last minute before speaking with a lawyer about getting a premarital agreement. Having sufficient time before the marriage can allow us to identify key issues and request information from the other lawyer so that we can fully protect your rights.
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.
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 waive in writing the right to seek legal advice.
Learn About Your Options
Contact our law firm today at 562-439-9001 if you or someone you know needs the help of an experienced family law attorney. We will be there when you call. Schedule a free consultation!
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