Premarital Agreements
PREMARITAL AGREEMENTS
IN GENERAL
The purpose of a premarital agreement is to establish in advance of a possible divorce the resolutions to the financial issues addressed in the agreement. Not all financial issues need be settled by the premarital agreement. Another way to say it is that a premarital agreement is designed so as to limit the financial risks and costs of divorce. One issue a premarital agreement should not attempt is to set child support in advance. California has specific child support guidelines which every court must calculate before making any decision about child support. Setting child support in advance of a court calculating guideline support simply cannot be done. Further, the right to support is the child's and the parents have no authority to bargain between each other concerning the child's rights.
Spousal support may be established or waived by a premarital agreement. However, whether any limit on spousal support will be ordered at the time of dissolution depends on the facts at that time, the time of enforcement. California statutes specifically declare that if facts at the time of enforcement establish the unconscionability of the premarital spousal support level, the court may make its orders based on the present circumstances. The statutes further state that "unconscionability" is a matter of law, that is, it is determinable only by a court and may not be determined in a premarital agreement.
KEY RULES AND CONDITIONS
There are certain procedural rules which must be followed in the preparation of premarital agreements. Other conditions would likely affect the validity or the enforceability of an agreement. Below are the key rules and conditions, which, if not followed, could easily lead to a court disregarding the premarital agreement, in whole or in part.
1. Both parties must be represented by independent counsel unless one party waives this rule knowingly, intelligently and freely. A waiver of spousal support is unenforceable if the spouse to receive spousal support was not represented. Many lawyers, including this writer, will not represent a party in a premarital agreement unless the other side is represented.
2. The premarital agreement may not be signed until at least 7 calendar days from the final amendment being made to the premarital agreement.
3. A premarital agreement will not be enforced if it was signed under duress, by virtue of a fraud or undue influence.
4. A court could find a premarital agreement unconscionable, in whole or in part, at the time of its attempted enforcement.
5. If property characterized in the premarital agreement as separate was not maintained as separate during the term of the marriage, it might be treated as community property.
6. If one party fails to disclose fully or accurately required financial information within the premarital agreement.
7. A change in the law could affect the terms of a premarital agreement, in whole or in part, at the time of enforcement.
8. If no copy of the premarital agreement is available at the time of enforcement.
9. If there are multiple but textually different copies of the same premarital agreement or copies of different premarital agreements between the same parties.