Do I Need a California Prenuptial Agreement?
If you’re planning to get married, a prenuptial agreement (also known as a “premarital agreement,” or sometimes simply a “prenup”) might be the last thing on your mind. On the other hand, if it isn’t your first marriage, or if you have significant property or savings built up, you may already be wondering if a prenup would be a good idea. Whatever your situation, a premarital agreement can provide you and your new spouse with clarity regarding what will happen with your property and finances if the two of you split up in the future. Having a premarital agreement can save time, stress, and money that would otherwise be spent attempting to determine who will retain what assets. To ensure that your premarital agreement is drafted correctly, it is important to retain an experienced family law attorney who can make sure that all of the legal requirements are fulfilled.
Legal Requirements of California Prenuptial Agreements
The Uniform Premarital Agreement Act (UPAA) has applied to California prenups since 1986. In general, this law states that written prenuptial agreements signed by both parties will automatically become effective once the couple marries. An agreement can cover a couple’s present and future property rights, as well as other matters related to the marriage, but it can’t negatively affect a child’s right to child support, or take away a court’s power to control child custody and visitation after marriage.
Principles of general contract law also apply to prenuptial agreements. Agreements require valid consent, meaning that a person must have the mental ability to consent, and that consent cannot be the result of fraud, inappropriate influence, or mistake.
Amendments to the UPAA that apply to California prenuptial agreements made after 2002 state that agreements will be enforced against a spouse only if that spouse:
- Received complete information about the other spouse’s property and finances prior to signing the agreement
- Had at least 7 days between first receiving the agreement and signing it (to allow enough time to have an attorney review the agreement), and
- Was represented by a separate attorney when signing the agreement, unless the spouse:
- received full information in writing about the terms and basic effect of the agreement, including any rights and obligations the agreement would nullify, and
- signed a separate document acknowledging receipt of such information, identifying the person who provided the information, and expressly waiving the right to an attorney.
Even if all of the above requirements are satisfied, unless the spouse was represented by an attorney, any provision in the agreement affecting rights to future spousal support (alimony) will not be enforceable.
Terms a Prenuptial Agreement Can Include
Provided that the above requirements are met, the couple can agree to modify, or even completely give up, rights to spousal support in the event of divorce, as long as the result is not “unconscionable”—meaning extremely unfair—at the time of enforcement. It isn’t clear exactly how unfair the results would need to be, but if a situation is extreme—for example, if one spouse would be forced to turn to welfare while the other still had ample means to provide support—the court would probably not uphold the agreement. Courts have also stated that any waiver of alimony will generally be enforced only between spouses of fairly equal education and intelligence, who were both self-sufficient in property and earning ability at the time of the agreement.
In addition to waiving spousal support, each spouse can agree to change the nature of separate or community property. For example, if one spouse owned a house separately before marriage, that house would ordinarily remain the spouse’s separate property in the event of divorce, but the couple can agree to make it community property instead.
Spouses can also agree that “community property,” such as earnings during marriage, which would ordinarily be divided equally in the event of divorce, remains separate property. Spouses can also agree to waive inheritance rights and include certain provisions in a will or trust, provided that such agreements don’t negatively impact the support rights of any minor children. Parents with children from previous marriages often want a new spouse to waive inheritance rights to make sure that assets will be passed on to the children.
Terms a Prenuptial Agreement Cannot Include
There are certain rights that can’t be conclusively bargained away in a prenuptial agreement because of other legal requirements. For example, a future spouse can’t waive the right to share in an ERISA governed employee benefit plan because federal law states that only a current spouse can do that. In order to accomplish this, couples have to complete the necessary documents after they’re married.
The agreement also can’t include anything that is illegal or against “public policy.” Making sure that children’s rights remain under the control of courts that will act according to the “best interests of the child” is one such public policy. In other words, you can’t contract away your future (or current) children’s rights – courts will always have the authority to make child-related decisions in a divorce.
A couple can agree, however, to provide a child with more support than the law requires. For example, they can agree on how to divide responsibility for a child’s future college expenses or whether to provide other support for an adult child. Agreements between parents about how to raise children won’t generally be binding either. For example, a court probably wouldn’t enforce a premarital agreement to raise the children in a certain religion in the event of divorce.
Since California courts don’t consider either spouse’s misconduct or fault in the division of property or award of spousal support in divorce, any agreement that tries to penalize one spouse for “fault” during marriage will not be enforceable. A spouse also can’t waive the financial and property disclosures required in divorce beyond any waiver already allowed by law.
In addition, public policy prohibits agreements that would alter the relationship duties of marriage. Marriage includes duties of mutual respect, fidelity and support. So for example, an agreement to pay compensation for “domestic services,” or “companionship” isn’t valid, because those services are already duties of marriage.
In the past, courts have stated that any agreement that “promotes dissolution of marriage” (divorce) is unenforceable. This position is somewhat inconsistent with the UPAA, since to some degree any change in property rights might make divorce relatively more attractive to one spouse. Still, a court is likely to closely examine any agreement where one spouse receives a large sum of money or an award of valuable property simply as a result of the divorce. If there is some balancing interest, for example, if the spouse to receive the award sacrificed the right to spousal support from a previous marriage to enter into the new marriage, the agreement is likely enforceable.