Premarital Agreements have become increasingly popular because people are entering marriage with property from a prior marriage, as well as children. Many wish to preserve their pre-existing property rights and interests for their children and heirs, and avoid problems in the event the new marriage doesn’t work out. There is no “one-size fits all” when it comes to Premarital Agreements (or PMA). Each agreement should be tailored to the needs and concerns of the parties. It is important to seek the advice of competent counsel experienced in the drafting of PMAs to ensure that the Agreement will accomplish the goals and address the concerns of the individual. In addition, it is equally important to seek the advice of counsel if one is presented with a proposed PMA, to determine how one’s rights and obligations may be modified by signing it.
So long as the agreements are entered into voluntarily and without deception, coercion or undue influence, Premarital Agreements are favored and will be upheld by the courts, however, not all provisions may be upheld if they are contrary to public policy, for example, if they attempt to limit the court’s power to adjudicate child support, or if the Agreement purports to control the religious upbringing of children (Marriage of Bonds (2000) 24 C4th 1, 25.
Premarital Agreements are governed by the Uniform Premarital Agreement Act (Family Code Section 1600 et seq.) Those agreements executed on or after January 1, 1986 are subject to the Act, which deals with the parties’ present and future property rights and other related matters incident to the marital relationship.
Those interested in having a Premarital Agreement intend for it to avoid or alter the applicability of California community property law to assets already owned by each of the parties as well as income to be acquired or earned during the marriage. For example, a PMA may provide that the earnings and accumulations of the parties during the marriage will remain that party’s separate property, free of any claims, community or otherwise. Usually, absent a PMA, all earnings and property acquired during the marriage are community property, with each party having a 50% interest. By entering into a PMA, the parties can contract around that in order to preserve their interests and avoid litigation over those assets.
Some people may wish to include a waiver of spousal support in the event of divorce. This will be upheld provided that the party waiving receiving spousal support has sought the advice of an independent attorney, and that the waiver is not unconscionable at the time of enforcement. (Family Code Section 1612 (c). Circumstances at the time the PMA is sought to be enforced might make enforcement “unjust.” One can never be sure what the circumstances will be when the court is forced to look at this provision and determine if it is unconscionable, and that is why it is important to have a severability clause included in the PMA, such that it does not affect the validity of the rest of the Agreement.
In short, there are many ways to fashion a Premarital Agreement to meet the needs of the parties, and ways to ensure that the Agreement is upheld should it be challenged. While it is not the most pleasant thing to deal with in light of a pending marriage, it is often an important way to limit the litigation and protect oneself in the event the marriage breaks apart.