A Premarital Agreement is an agreement between prospective spouses made in contemplation of marriage and is effective upon marriage.
Premarital (or “prenuptial”) agreements most always involve a waiver of legal and financial benefits by the lower net-worth partner and they are often criticized as an arrangement that encourages breakups. In view of these factors premarital agreements are closely scrutinized by the Courts.
As with most all life decisions one quick answer does not work universally. Alternatively, a one-on-one proper evaluation of the parties concerns and objectives does work universally. If that is done the premarital agreement will be optimum. In fact, an early and open premarital discussion of financial matters can be crucial to a successful marriage.
There are many reasons one may want a premarital agreement. One may wish to provide for children of a prior marriage in his or her estate planning. Such a premarital agreement can improve family relationships when a stepparent enters the picture by giving children the peace of mind of knowing that their inheritance expectations remain intact. When there is a family business, one’s family members may feel a premarital agreement is necessary to protect the business in the event of a death or divorce. When one has been married and divorced he or she may be reluctant to marry again without a premarital agreement.
Premarital agreements are not only for the very wealthy. Those of modest means may want an agreement to decide in advance how assets accumulated during the marriage will be handled in the event of divorce or when the first spouse dies. Other reasons might be to reassure one another that neither party will seek alimony or to agree that the parties will use mediation or arbitration in the event of marital dissolution. Deciding such matters in advance, before a breakdown in the relationship can significantly reduce legal fees in the event of a divorce and can give both parties peace of mind.
In California premarital agreement’s are dealt with by statute and by a goodly number of appellate case law precedents.
For a premarital agreement to avoid being summarily invalidated it must be in writing, voluntarily and knowingly signed by both parties and each party having their own attorney.
A premarital agreement is enforceable without consideration (i.e. an exchange). This is the language of the law – many may argue that one’s agreement to marry another is without question “consideration”.
California law allows a party to expressly waive their right to a lawyer. As a practical matter it is critical that independent lawyers advise each of the parties to a premarital agreement because the statutory conditions to having a valid waiver are major and Judges routinely invalidate premarital agreement’s that are entered into where both parties were not independently represented.
Add to this that if any provision in a premarital agreement relates to spousal support it is statutorily unenforceable if the party against whom enforcement of the spousal support provision is sought was not independently represented.
Lastly, it is important to know if other state laws may already be accomplishing what you want from your premarital agreement: California is a community property state. Assets owned before marriage are separate property and those accumulated during marriage are community property which is owned equally by the parties.
Other state laws provide for property rights for a surviving spouse, for the division of assets if the parties divorce, and for spousal support for spouses who are unable to support themselves. In this sense, state law is the “premarital agreement” and that may be all that one is seeking in a premarital agreement.
Do contact us to see if we can be of help in this area of the law or any other family law problem that you or loved one may have.