When parties enter into premarital agreements or postmarital agreements there may be issues of interpretation and/or validity in a future divorce proceeding. There are specific presumptions that apply to these agreements. Some of these presumptions are rebuttable and can be overcome with sufficient evidence. The law has changed several times over the years relative to what issues may be agreed to in a premarital agreement. It is critical to know the law as it existed on the date the remarital agreement was executed (IRMO Melissa). If the parties do not agree as to the validity of an agreement, the divorce court will determine the validity. Trials on these issues can be extensive and may involve issues including unconscionably, the nature of the relationship between the parties when the agreement was executed, undue influence, voluntariness, lack of accurate disclosures, compliance with family code requirements relative to the execution of the premarital agreement and issues of contractual interpretation.
Replacement of Certain Family Code Provisions
A premarital agreement allows parties to alter many of the rules that will apply if they elect to divorce in the future. These agreements, if held to be valid, essentially replace community property laws that are addressed in the agreement.
They can convert what would have been community earnings to separate property earnings. Separate property income is generated before marriage, after separation or from separate property assets during the marriage.
Separate property is property acquired before marriage, after separation or during marriage by the way of inheritance, qualified gifts, or acquired with other separate property. Premarital agreements may alter these laws.
To be valid, gifts between spouses must meet the specific qualifications of the California Family Code. A clear intention, by itself, to give an item to the other spouse, may not replace or overcome the requirements of the Family Code. There are no restrictions relative to gifts of wearing apparel, jewelry or other tangible articles of personal nature solely or principally used by the recipient spouse that are not substantial in value considering the economic circumstances of the marriage.
A vehicle of any price cannot be characterized as a gift in that it is not a tangible article of a personal nature. Whether items of art or furniture can be items solely or primarily used by one spouses are a question of fact.
Premarital agreements may alter the rules relative to the definition gifts.
Child Custody and Child Support
The terms of a premarital agreement cannot bind a divorce court relative issues related to child custody or child support. The parties cannot bind the family law court to follow a specific standard of review, relative to future child custody matters. The parties cannot bind the family law court relative to move away/relocation issues (IRMO Abrams) or the standard of review for the modification of child support (IRMO Cohen).
To be valid a valid premarital agreement, a number of requirements must be complied with. Premarital agreements must be “acknowledged” or its equivalent. (Irmo Cleveland). There must be at least seven days between the premarital agreement being first presented with the premarital agreement being signed (IRMO Cadwell-Faso & Faso and IRMO Clarke & Akel).
Not Valid As To A Second Marriage
A premarital agreement executed before the first marriage does not apply to a second marriage with the same person (Barham v. Barham).
Waiver of Full Disclosure
There must have been an opportunity to see the full extent and nature of the assets and net worth of the opposing party. Each party is to disclose all material facts and information relative to his or her estate and net worth. However, one court ruled that if a spouse waives the opportunity to investigate the extent of the estate in a property settlement, a post-marital agreement will not be set aside unless there was a misrepresentation or concealment of the facts.
Promotive of Divorce
A premarital agreement will not be enforced if it is promotive of divorce (IRMO Dajani). However, a property settlement in a divorce that creates a substantial benefit to one spouse will be enforced when it is clear that the marriage is over. (Glickman v. Collins). A court held that a provision in a premarital agreement awarding one spouse $100,000 if a divorce occurred was enforceable in that the payment was, in effect, a replacement for the spousal support that the wife would forfeit if she married the husband (IRMO Bellio).
A California divorce may involve a premarital agreement entered into in another state which may raise unique issues relative to the invalidity and/or enforceability of the premarital agreement or portions of the agreement. As an example, a New Jersey Court upheld the parties’ stipulation entered into in California to be bound by an arbitration order (Delorean v. Delorean).
Reward or Penalty Provisions Invalid
There are certain subject areas that cannot be addressed in a premarital or postmarital agreement. For example, the parties cannot provide for a penalty to a spouse for being sexually unfaithful (Diosdado v. Diosdado). The parties cannot provide for forfeitures related to conduct like using illegal drugs (IRMO Mehren & Dargan).
The law now allows for parties to contract with each other relative to the terms of a spousal support in a divorce. This changes the prior prohibition of addressing spousal support in a premarital agreement (In re Nelson’s Estate).
Pending the determination of the validity of a premarital agreement, a divorce court may grant temporary spousal support (Gromeeko v. Gromeeko).
Depending on the circumstances, a parties’ failure to perform certain obligations under a premarital agreement may be a defense to enforcement of the premarital agreement. (In re: Warner’s Estate).
Divorce courts can consider the intent of parties when interpreting provisions of agreements that are vague. This principle has also been addressed in the context of a marital settlement agreement (IRMO Schu).
A party must have sufficient mental capacity to enter into a premarital agreement, which is a contract. The courts have addressed mental capacity and the different levels necessary for different transactions and decisions (IRMO Greenway).
Premarital and postmarital agreements are contracts. Contracts that are not well written may be misinterpreted or held to be void or unenforceable. The court In Re Marriage of McCourt offered very specific and detailed advice on drafting agreements.
The fairness of agreements is measured as of the date when the agreements are executed (Ferguson v. Yaspan). However, the fairness or unconscionability of a spousal support waiver or limitation is measured at the time of a divorce.
If a party has full access to all of the financial and property information and material facts, he or she cannot later complain that the agreement should not be enforced unless the other party concealed facts or made misrepresentations (IRMO Burkle).