What Is a Premarital Agreement?
Premarital Agreements are generally defined by state law. This Article focuses on California law. Premarital Agreements are defined by Section 1610 of the California Family Law Code as an agreement made by a prospective couple that takes effect on marriage. The Agreement must be written. Section 1612 of the California Family Law Code details the issues that can be addressed such as property ownership, income rights, and related financial issues. Section 1612 of the California Family Law Code also provides that issues relating to child support, child custody, or even obligations regarding household chores or infidelity may not be addressed.
Provisions regarding spousal support will not be enforced unless the person whose receipt of spousal support is limited or waived and had independent counsel before entering into the Agreement. Provisions regarding spousal support will not be enforced if they are unconscionable at the time of enforcement. The question of unconscionability is determined by reference to the facts and circumstances at the time of enforcement. Nevertheless, the Courts give strong deference to a clear provision regarding spousal support.
Section 1613 of the California Family Law Code provides that a premarital agreement becomes effective upon marriage.
Section 1614 of the California Family Law Code provides that you may amend or revoke your prenuptial agreement in California after you get married, following similar procedures as the initial creation of the Agreement.
Who Needs a Premarital Agreement?
Premarital Agreements are no longer just for the exceedingly wealthy. A discussion of some of the circumstances that indicate a Premarital Agreement can be important for you or your family are as follows:
- Preserve Rights to Property Owned When First Married. Many people are waiting to marry at an older age. As a result, married partners now have significant separate property holdings at the time that they get married.
- Provide for Children From Prior Marriages. A married couple with children from prior marriages may wish to use their respective separate property to provide for their children in the even of his or her death. Without a prenuptial agreement, a surviving spouse may .claim a larger share leaving less for a spouse's children.
- Identifying Property Interests and Rights. Married partners may want to have some certainty as to the ownership of property or rights after the marriage.
- Creditor Protection. A premarital agreement can also be used to insulate or protect one spouse from the debts or claims against the other spouse.
- Estate Planning. A premarital agreement can also be used to establish the right to use a deceased spouse's unused estate tax exemption (DSUEA). The DSUEA was created in the 2010 tax act and is an important planning consideration for married couples that have a taxable estate for estate tax purposes. This planning opportunity could be lost in a second marriage upon the death of a spouse if the deceased spouse's children or other family members fail to cooperate.
Requirements for Enforcement
Detailing all of the requirements for a valid premarital agreement is beyond the scope of this Article. However, the following requirements are critical for the enforcement of the Premarital Agreement if challenged in the divorce court:
- Written Agreement. The Agreement should be written, dated, and signed by both spouses.
- Separate Counsel for Each Spouse. Each spouse should be independently represented by a separate lawyer. If either spouse does not have legal representation, a claim may be possible that he or she did not fully understand its provisions and that could be a basis to have the Agreement set aside.
- Full Financial Disclosure. Each spouse should fully disclose their respective assets and liabilities. Failure to fully disclose may be a basis for the Agreement to be set aside.
- Don't Wait to the Last Minute. The final version of the Agreement should be presented with a request to obtain independent legal review at least seven (7) days before the Agreement is signed. Insufficient time for review may be a factor in determining whether the Agreement is enforceable.
- Next Step. If you are considering a Prenuptial or Premarital Agreement, call our office so that we can discuss your wishes and how to proceed.