A Key Element of a Sophisticated Marriage or Estate Plan
The (in)famous premarital agreement, the implications of which are illustrated humorously in the movie Intolerable Cruelty, can legally, if enforceable, preempt California law being applied to the terms of a divorce settlement and from the standard presumptions written in the California Family Code. The prenuptial agreement may also include terms that apply at death prior to a divorce, or even during the marriage upon a defined event or condition. Some agreements may become void after a certain time period by its own terms. The premarital agreement is also a key element of a sophisticated marriage or estate plan. Parties are free to agree to almost anything in their prenuptial contract, including how to raise their children, how to bank together, how to file tax returns, how to save, how the house will be owned (or not), and how the retirement funds will be owned, (or not)! These terms are commonplace.
Spousal Support May Be Addressed...
Even more controversial provisions related to spousal support, thanks to the Bonds case, may legally be included into the terms of a premarital agreement. FC 1612 provides this: 1612. (a) Parties to a premarital agreement may contract with respect to all of the following: (1) The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located. (2) The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property. (3) The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event. (4) The making of a will, trust, or other arrangement to carry out the provisions of the agreement. (5) The ownership rights in and disposition of the death benefit from a life insurance policy. (6) The choice of law governing the construction of the agreement. (7) Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty. However, the right of a child to support may not be adversely affected by a premarital agreement and any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, 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 enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel.
Was Not Executed Voluntarily...What is This?
FC 1615 (c) provides that for the purposes of subdivision (a), it shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record all of the following: (1) 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. (2) The party against whom enforcement is sought 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. The practice followed by most attorneys is to insist that both sides have attorneys and to observe the 'cooling off period' strictly. A premarital agreement is not enforceable if the party against whom enforcement is sought proves either of the following: (1) That party did not execute the agreement voluntarily. (2) The agreement was unconscionable when it was executed and, before execution of the agreement, all of the following applied to that party: (A) That party was not provided a fair, reasonable, and full disclosure of the property or financial obligations of the other party. (B) That party did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided. (C) That party did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party. The rigors of this section have numbed the interest of many attorneys to negotiate premarital agreements. Those that still do, insist on having an attorney on both sides for both parties. The seven-day day cooling-off period also prevents the surprise presentation of a premarital agreement on the night before the wedding. FC 1615(c) protects the weaker party.
Effective Upon Marriage
Prenuptial agreements are typically effective upon marriage. The Code may be deficient as no reason exists why domestic partnership registration should not also be included. Parties who sign prenuptial agreements but never marry or register, are not subject to the contractual terms unless the prenuptial agreement perhaps amounts to a cohabitation agreement, and the parties live together. Cohabitation agreements are dealt with elsewhere in this site.