Articles Posted in Premarital Agreements

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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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Premarital Agreement - PenThe date of a premarital agreement (commonly referred to as a “prenup”) will determine the law applicable to its enforcement and validity. The law related to the validity and enforcement of premarital agreements has changed substantially throughout the past 30 years. Divorce attorneys are frequently asked the question:

“Is my prenup valid?”

Any premarital agreement executed after January 1, 1986 is subject to the Uniform Premarital Agreement Act (UPAA). However, prior law continues to govern any pre-1986 premarital agreements. In 2002, portions of the UPAA were significantly amended. Again, those changes do not apply retroactively so the 1986 version of the UPAA applies to all premarital agreements executed between January 1, 1986 and January 1, 2002. So, considering all of these timelines, the following is a list of differences to examine:

Premarital Agreement Executed Between 1/1/1986 and 1/1/2002

  • Relaxed statutory disclosure standards – Spouses are held to a lower duty to make a fair, reasonable, and full disclosure regarding property or financial obligations
  • Burden of proof – The party claiming the premarital agreement is unenforceable bears the burden of proof on that contention.
  • Representation of counsel – No requirement that party against whom enforcement is sought was represented by an attorney at the time the premarital agreement was executed.
  • Waiting period – No mandatory waiting period between presentation of premarital agreement to a party and the date it is signed.
  • Spousal Support Waiver – Relaxed statutory requirements applied to spousal support waiver.

Premarital Agreement Executed Between 1/1/2002 and the present

  • Heightened statutory disclosure standards
  • Burden of proof – Burden shifts to party attempting to enforce the premarital agreement to prove it was executed voluntarily.
  • Representation of Counsel – Party against whom enforcement is sought must have been represented by independent counsel or signed an express waiver of representation in a separate document.
  • Waiting period – There must be at least seven days between the date a party is first presented with the premarital agreement and the date it is signed.
  • Spousal Support Waiver – A spousal support waiver in a premarital agreement must meet strict statutory standards in order to be enforceable.

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A New York appeals court is making waves throughout the family law community as a result of its recent controversial ruling. Before Elizabeth Cioffi-Petrakis and Peter Petrakis got married, they entered into a premarital agreement, commonly known as a “prenup”. At trial, the court ruled that the premarital agreement was void. On appeal, the trial court’s decision was upheld. Many attorneys throughout the U.S. believe that this case may have enormous implications on every premarital agreement case in the future. Divorce attorneys are surprised that the premarital agreement was held void and by the court’s rationale.

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The basis for voiding the premarital agreement in the divorce proceeding was “fraud in the inducement.” Just four days before her wedding to Mr. Petrakis, Ms. Cioffi was presented with a prenup and an ultimatum. Although Ms. Cioffi’s parents had already spent $40,000 on the wedding, Mr. Petrakis told Ms. Cioffi that he would not marry her unless she signed the agreement. Moreover, Mr. Petrakis orally promised to tear up the agreement and put her name on title to their home as soon as the couple had children. In reliance on Mr. Petrakis’ oral assurances, Ms. Cioffi signed the prenup. Once the couple had children, Ms. Cioffi pushed Mr. Petrakis to follow through with their oral agreement and he refused.

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At the time Ms. Cioffi signed the prenup she was represented by an attorney and all other typical enforceability requirements were undisputedly met. The written agreement also contained a provision specifically stating that both parties were precluded from relying on all prior or contemporaneous oral agreements. Notwithstanding that provision, both courts ruled that the premarital agreement void by applying the contract principal of fraud.

In Del Mar and across California, if both parties are represented by counsel from the onset of negotiations, there is no required waiting period that must pass before the parties can sign an enforceable premarital agreement. However, if only one party is represented by counsel, the unrepresented party must consider the agreement for a minimum of seven days before signing it. As long as these and the additional statutory requirements are met, many family law attorneys feel that premarital agreements are extremely difficult to set aside.

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In a 1938 California case, the court determined fraud is an appropriate basis for setting aside a post-marital agreement. It would seem that New York was not too far off the mark when it applied the generally accepted contract defense of fraud to family law. More and more, divorce lawyers are seeing the stricter standards applied to civil litigation at large are being applied in family courts.
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divorce-attorney-proxy-marriage.jpgIn the past few years internet dating and the concept of online love connections has exploded. It has become increasingly more socially acceptable to find a mate online than when the concept first arose with the invention of the internet. Recently a new trend has emerged: internet marriages.

The idea that a marriage can occur without the physical presence of one spouse is not so new and trendy. A proxy marriage is a legal ceremony which occurs when one (or both) spouses are not physically present. If both spouses are not present, the wedding is called a “double proxy wedding”. Usually a “stand in” will be present in the absent spouse’s place. Generally, proxy marriages are not legally recognized throughout the United States except in limited circumstances such as for military personnel. In Del Mar, the courts recognize proxy marriage as valid in certain circumstances. California is in the minority of states in this respect.

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While proxy marriages were traditionally entered into mainly by active duty military, they are now being used between people who met online and may have never seen each other in person. Weddings are literally being conducted over the internet through services such as Skype and Google Hangout. The purpose of requiring both parties to be present and to conduct a ceremony in the presence of a witness is to ensure the voluntariness of the marriage. The main concerns of the states which do not allow proxy marriages include: facilitation of fraud by those attempting to gain U.S. citizenship and the possibility that they will be used by human traffickers to bring women into the U.S. Although individuals are generally interviewed when they apply for citizenship and questioned about the details of their wedding, the Times reports that officials working for Homeland Security and the State Department do not specifically ask if the wedding occurred by proxy.

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Although many stats disallow proxy marriages, generally every state recognizes marriages legally conducted abroad. This means that if two parties legally marry in a foreign jurisdiction in accordance with that jurisdiction’s laws, their marriage is generally recognized in any state. The recognition of marriages legally conducted abroad is being used as a loophole to circumvent the restrictions on proxy marriages. As divorce lawyers are aware, if a proxy marriage occurs pursuant to the marriage laws of a foreign country and that country recognizes the legality of proxy marriages, the proxy marriage will be legally recognized in any state.
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If you have as much money as Tiger Woods, maybe it can buy you love. After a massive cheating scandal broke in late 2009, Elin Nordegren filed for divorce from her successful golf star husband, Tiger Woods. In a record-breaking settlement, Nordegren walked away from her marriage with $750 million. In return for her cash pay-out, Nordegren agreed to never publicly speak out about Woods’ affairs with over twenty different women. Despite their incredibly public divorce, just over two years after the couple reached a global settlement, Woods’ again proposed marriage to Nordegren.

Tiger.JPG Apparently Woods is not satisfied with his not-so-new found single lifestyle. His friends say he is incredibly unhappy without his family and has not managed to hold a steady girlfriend since Nordegren. Although Woods has dated several other models since his divorce, he hasn’t recovered from his split with Nordegren. On or around Christmas 2012, Woods got down on one knee, presented her with a ring, and “re-proposed” to his former wife. Nordegren is considering Woods’ proposal, but only on the condition that he agree to include a $350 million anti-cheating clause in their prenuptial agreement. Reportedly, Woods has no problem agreeing to Nordegren’s condition despite the fact that his accountants think he is crazy. Woods is ready to sign on the dotted line, set a wedding date, and return back to his former married life.

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Another Housewife is getting divorced. Bethenny Frankel, creator of the Skinnygirl franchise, is divorcing her Husband Jason Hoppy after only two years of marriage. For months Frankel has been fighting rumors that the couple is splitting but she has finally confirmed that a divorce is on the horizon. Frankel released the following statement regarding the divorce, “It brings me great sadness to say that Jason and I are separating. This was an extremely difficult decision that as a woman and a mother, I have to accept as the best choice for our family.”

Skinnygirl_Frankel_Divorce.jpgIn 2008, Frankel agreed to join the cast of Bravo’s The Real Housewives of New York. At that time, only four short years ago, Frankel had a “mere” $8,000 in her bank account. To Frankel, The Real Housewives was an opportunity for her to build her own brand and advertise her Skinnygirl line of alcoholic beverages. It seems as if her plan worked because currently Skinnygirl is the number one fastest growing spirit in the United States. In addition, Frankel is now also a best selling author with her own skin, clothing and health products. Further, Frankel received a $40,000 check for each episode of her reality show. Considering the size and diversification of Frankel’s fortune, the first question surrounding her divorce is whether she will have to split everything with her husband. Because the Frankel and Hoppy signed an enforceable premarital agreement, all of Frankel’s empire should be safe from division.

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