Articles Posted in Premarital Agreements

 

wire-puzzle

In Family Law, tracing is the method by which a party proves that funds in a particular account are, or were, used to acquire separate property.  Family Code section 760 holds that all property acquired during a marriage, regardless of source, is community property, it can sometimes be a difficult and expensive endeavor to try to perform a tracing. In California Family Law, there are three ways to prove a tracing: 1) Direct Tracing; 2) Exhaustion 3) Total Marital Recapitulation.

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Elvis

On June 13 Lisa Marie Presley filed for divorce from her fourth husband, Michael Lockwood. While Lisa Marie isn’t the only star we’ve written about to go through multiple divorces, her specific case highlights a common and sometimes very complicated issue in divorce which occurs when one spouse has taken control of the finances and the other has little to no involvement in financial matters (the so-called “out spouse” is the one who stayed out of financial matters during the marriage).   Continue reading

Don_McLean_in_2012After a 30-year marriage, Don McLean and wife Patrisha have finalized their divorce. The “American Pie” singer’s divorce followed his January 2016 arrest on domestic violence assault charges, for which he plead not guilty. The divorce paperwork filed by Patrisha after this incident cited “adultery, cruel and abusive treatment, and irreconcilable differences.” Continue reading

depp-heard-divorce

The latest Hollywood divorce drama comes as Amber Heard files for divorce after a 15-month union with Johnny Depp. Heard alleged an incident of domestic violence just days before she filed for divorce, and pictures later surfaced of her with a black eye. The media is abuzz with discussions of whether the abuse actually happened, or whether it was just a ploy on Heard’s part to gain sympathy and secure more money from the divorce.

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getting-married

Getting engaged is an extremely happy time for any couple.  The act of showing off the ring (and for millennials posting hundreds of pictures of the ring to various social media accounts) fills a bride-to-be with an amazing sense of excitement and joy for the upcoming nuptials.

What often gets forgotten in all the excitement of a wedding is, what happens after the ceremony; after all of the gifts have been open, the guests have left and you are sitting in a home with your new partner.  This moment should be marked as the beginning of a long and fulfilling relationship, but unless you lived with your spouse before you were married, you may find yourself wondering just who you are married to.

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divorce-cake

Kaley Cuoco became the second-highest paid TV actress (2nd to Sofia Vergara), after signing a $72 million dollar 3-year contract for her role in CBS’s hit show The Big Bang Theory. Yes, that’s $1 million dollars per episode for 72 episodes….and yes, now I’m reconsidering my chosen career path. Ahem, sorry, I guess that’s beside the point.

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kim-kardashian-kanye-west-lg.jpgKim Kardashian and Kanye West are currently scheduled to get married on May 24th in a non-televised Paris ceremony. Rumors are flying that the wedding will not take place unless both Kardashian and West have signed their premarital agreement (commonly referred to as a “pre-nup”). Apparently, only two week before the wedding, the power couple has not finalized their pre-nup. The Kardashian-West premarital agreement is allegedly much friendlier than Kardashian’s previous premarital agreement which was signed prior to her marriage to NBA star Kris Humphries. Therefore, the holdup does not appear to be the result of disagreement of the parties regarding the terms of the agreement. Likely the delay is the result of West’s recent management change which has caused additional complications and changes to the agreement.

As long as the parties sign their agreement prior to the wedding, does it really matter when it gets signed? The answer to that question is “yes”. Timing of the execution of premarital agreements is crucial especially if the agreement contains spousal support waiver provisions. In order to limit some of the objections to enforcement of premarital agreements, the party against whom enforcement is sought should be presented with the agreement and advised to seek independent legal counsel at least seven (7) calendar days before the date the agreement is signed. This procedure will ensure the parties had enough time to thoroughly consider the legal ramifications of the premarital agreement rather than just signing it immediately upon receipt.

prenup-agreement.jpgAlthough Kardashian and West will likely sign their premarital agreement just days before they walk down the aisle, their agreement will likely not be held invalid due to the timing of its execution. As long as Kardashian and West had ample time to review the agreement and seek the advice of counsel, they should be able to count on enforceability if a challenge were to be made on that basis. Further, although a court may conclude that the execution of a premarital agreement was done appropriately, the premarital agreement may be held invalid for a number of other reasons.

In particular, parties should be cautious to enter into agreements which seem “unconscionable” or especially unfair to one party. The unconscionability of a premarital agreement can invalidate the agreement if the agreement was unconscionable when executed or even if it has become unconscionable at the time one party is seeking enforcement. Competent legal representation of both parties at the time of negotiation and execution of a premarital agreement can save both sides significant time and money in the event of divorce if one of the parties has a reasonable basis to invalidate the agreement.
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paltrow-divorce.jpgAfter ten years of marriage, actress Gwyneth Paltrow announced her separation from Coldplay star Chris Martin. According to Paltrow’s website, the couple was working hard (separately and together) on their marriage for the past year without any success. Although neither party has officially filed divorce paperwork, the media speculates that a divorce is well underway. Some celebrities such as Kim Kardashian have litigated their personal family law matters in the public eye. However, more private celebrities tend to keep their personal issues out of the public court system.

Private mediation is a great option for celebrities who want to keep the details of their divorce confidential. Although private mediators are available for any family law litigants, not just celebrities, they tend to be too expensive for most cases. Private mediators in San Diego often charge between $400 and $750 per hour for their services. In addition, when you factor into the cost of private mediation the hourly rate for two attorneys (at least one for each party), the cost of private mediation can cost each party thousands of dollars per day. Some cases inevitably drag on for months or even years because the parties have reached an impasse on one or more issues. In those instances, the parties might agree that private mediation is worth the cost.

The media is buzzing with speculation regarding the Paltrow-Martin split. A lot of the dialogue surrounding this divorce is focused on how simple the dissolution process can be when the parties agree to avoid litigation. Media outlets claim Paltrow and Martin will simply put a rubber stamp on their premarital agreement and end their case. However, the divorce process is not that easy – even for celebrities. In California, family law litigants are required to exchange disclosure documents (consisting of an Income and Expense Declaration and Schedule of Assets and Debts) at the outset of the case. In cases where the parties’ income and/or assets are complex, the exchange of disclosure documents can be a lengthy and expensive process. Inevitably, celebrities will spend a significant amount of money up front on attorney fees incurred for the preparation of their disclosure documents.

In addition to spending large sums of money and a lot of time in order to adequately complete their disclosure documents, celebrities will also inevitably require extremely specific and complicated settlement agreements – even if a valid and uncontested premarital agreement is in place. Each divorce case must end either by trial or through the filing of an agreed-upon judgment. Preparation of the judgment will likely require multiple drafts and settlement conferences between attorneys. Due to the complexity of celebrity divorce cases, it is not uncommon for celebrities to walk away from their marriages with six figure legal bills.
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benefits of a pre-nupMany engaged couples in San Diego contemplate getting a premarital agreement (otherwise known as a prenuptial agreement) before they take their walk down the aisle. However, many future brides and groom never bring the subject up with their future spouse for a variety reasons. For example, parties often misunderstand many elements of the premarital agreement process, are afraid of their partner’s reaction, and resent the stigma that getting a premarital agreement equates to a lack of faith in the marital relationship. However, there are many benefits to getting a premarital agreement as explained below which should also be considered by those contemplating a premarital agreement.

Unintended Outcome
All couples who marry in California without signing a formal premarital agreement have entered into a different type of premarital agreement known as the California Community Property Law. If parties to do not contract otherwise, the default family code provisions governing property division and spousal support will apply upon divorce. There are so many rumors, myths, and misconceptions floating around about California divorce law that many divorcing couples are surprised about their legal rights upon divorce. By discussing a premarital agreement with an experienced family law attorney prior to marriage, both parties can become informed regarding default legal provisions. More importantly, the parties can reach agreements to create the outcomes they intend and expect upon divorce.

Uncertainty
Many laws regarding spousal support and the division of marital property contain many elements and factors. Further, California family court judges have a lot of discretion to determine fair and reasonable outcomes. Considering these two facts together, the outcome of a California divorce is nearly impossible to predict. A premarital agreement can provide certainty and peace of mind to parties considering divorce. Premarital agreements provide parties with the opportunity to protect businesses, family assets, and future income.

Cost
A premarital agreement is relatively inexpensive compared to a contested divorce which is litigated due to the upset expectations of the parties and uncertainty in family law. As recently modeled by California celebrity divorces, the dissolution process can be so lengthy and drawn out that sometimes it can extend longer than the underlying marriage. One disputed issue can result in multiple hearings or even a trial which can cost tens of thousands of dollars. Depending on the complexity of the case, the cost of a premarital agreement will not likely exceed the cost of just one hotly contested issue in a divorce case. Litigating a divorce also comes at a high emotional cost. By resolving the distribution of property and spousal support prior to (or even during) marriage, parties can avoid the emotional turmoil that accompanies divorce litigation.
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Kelly Clarkson marries with no prenupAmerican Idol winner Kelly Clarkson married fiancé Brandon Blackstone on October 20, 2013 in a quiet Tennessee ceremony. Although Clarkson has won 3 Grammys, 4 American Music Awards, and 13 Billboard awards throughout her successful singing career, no premarital agreement was reported before her wedding. Clarkson has been known to frequently “Tweet” about her happy relationship with Blackstone; however, even the happiest couples sign premarital agreements in some cases.

A premarital agreement, often referred to as a “pre-nup,” is a contract containing spousal support and/or property division terms that would control in the event of a divorce. Without a premarital agreement, the community property laws of the State of California control property division upon divorce. Celebrities and high powered business people are the first ones to come to mind when discussing pre-nups; however, divorce attorneys report a jump in these agreements between people from all walks of life over the past ten years.

Many family law attorneys attribute the rise in premarital agreements to the fact that more people remarry later in life and are now looking to protect existing separate property assets. In addition, considering that many people are marrying for the second and third time as they get older, they also enter into premarital agreements to protect their children from their first and/or second marriages. Premarital agreements become more crucial when people enter into marriages with a significant amount of wealth or property. However, they can be entered into by any couple when they marry and can be altered over time as the parties acquire wealth and property.

If a couple marries without a premarital agreement but later wish they had taken that legal step, they have the option of entering into a post-nuptial agreement. A post-nuptial agreement can serve the same purposes as a premarital agreement. The only major difference between a premarital agreement and a post-nuptial agreement is that a post-nuptial agreement is signed after marriage. Therefore if Clarkson and Blackstone would like to reach a legally binding agreement regarding property and/or spousal support in the event of divorce, they could easily do so by signing a post-nuptial agreement.

Many couples avoid premarital agreements
because of the stigma attached to signing one. Engaged couples considering a premarital agreement may not discuss it with their significant others or family in order to avoid accusations that they don’t believe their marriage will last. Singing a premarital agreement does not mean that the parties are already considering divorce or that they don’t trust each other. In fact, a premarital agreement can be a great tool to get couples talking about financial issues and improve communication on these topics.
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