California Prenup Basics

Although it may not seem romantic, investing in an enforceable premarital agreement can be one of your smartest wedding preparations.  Statistics show that the national divorce rate is about 50%.  In California, it’s about 60%.

Public Policy on Premarital Agreements

Premarital agreements, commonly known as “prenups”, are governed by the Uniform Premarital Agreement Act (UPAA), codified in California by Family Code §1600 et seq.  In fact, forty-eight states have codified the UPAA into their statutes, showing that general legislative policy supports premarital agreements.  While some critics still contend that premarital agreements encourage divorce, California courts tend to view them as mutual, voluntary agreements between spouses (in advance of actual marriage) “intended to foster or perpetuate conditions that will help preserve a forthcoming marriage.”

Enforceable Terms of a Premarital Agreement

Under California law, prospective spouses may contract as to the following issues:

  • Property rights upon separation, divorce, death or the occurrence/non-occurrence of any event;
  • The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
  • The execution of other arrangements to carry out the provisions of the premarital agreement;
  • The ownership rights and benefits from a life insurance policy;
  • The choice of law governing the construction of the agreement; and
  • Any other matter that does not violate public policy or constitute a crime.

Prospective California spouses may NOT contract terms that:

  • Waive the obligation of mutual respect, fidelity and support between spouses during marriage;
  • Waive full disclosure obligations;
  • Agree to pay for domestic services or companionship;
  • Dictate the religious upbringing of children;
  • Waive or limit the statutory right of child to receive support from each parent;
  • Provide large conditional payments or other terms that might tend to promote divorce; or
  • Provide penalties for “fault” during marriage.

Requirements for a Valid Premarital Agreement

In order for a premarital agreement to be enforceable, both prospective spouses must enter the agreement voluntarily.  “Voluntarily” means several things.  First, it means that each party is an adult (or emancipated minor) and has mental capacity to contract. Second, prospective spouses may not subject the other to fraud, menace, duress or undue influence.

Each prospective spouse must provide fair and full disclosure of the existence and valuation of their assets, debts, income and expenses to the other prospective spouse.  Each spouse must have at least seven calendar days to review the premarital agreement before signing it.

Premarital agreements must be in writing, signed by both parties, and cannot be unconscionable.  “Unconscionability” refers to elements of oppression, unfair surprise or unreasonable one-sidedness. Unconscionability is assessed at the time of execution, except for issues of spousal support, which are also assessed at the time of challenge to enforcement.

Under California law, each spouse must either obtain independent counsel to advise them of their legal rights, or waive the right of independent counsel in a separate written waiver after being fully advised in writing of the rights and obligations that they may be giving up by entering into a premarital agreement.

Effectiveness of a Premarital Agreement

A premarital agreement becomes effective and is conditional upon the eventual marriage of the parties.  Therefore, if parties decide NOT to marry, the premarital agreement is enforceable only to the extent necessary to avoid an inequitable result.  After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by both spouses.

The information contained in this article is intended as general information and does not constitute legal advice.  If you are considering entering into a premarital agreement, you and your prospective spouse should consult with independent legal counsel in the state whose laws you want to govern your agreement.

Lisa Fiance, Esq. is a licensed California attorney, formally trained mediator, and the owner of Epiphany ADR.  Submit the form below to learn more about CA premarital agreements.Epiphany Head Shot (700 kb)

Advertisements