The “7-Day Rule” for Premarital Agreements Revisited and Reinterpreted

Premarital Agreements (“PMA”) can be very tricky. As experienced San Diego family law attorneys, we work hard to keep up with changes to the PMA rules. The rules for “PMA’s are contained in California Family Code Sections 1600-1617. In addition to parties essentially creating their own agreed upon law (within the boundaries set by the PMA Act) for what is to occur in the event a marriage ends, the rules and the courts interpretation of the rules are constantly changing.

PMA’s may cover the following subjects:

• Property rights and obligations, property management and control, and disposition of property;
• Making wills, trusts or other arrangements to carry out the premarital agreement provisions;
• Life insurance ownership rights and disposition of death benefits;
• Choice of law; and • Any other matter, including personal rights and obligations that do not violate public policy or statutes imposing criminal penalties.

Although PMA’s may not limit child support, spousal support may be limited if certain conditions are met. One of the conditions for limiting spousal support in a PMA is the “7-Day Rule,” which requires that PMA’s be presented at least seven calendar days in advance of signing.

California Family Code §1615(a)(1) states that a PMA is not enforceable if the party did not execute the agreement voluntarily. §1615(c)(2) states that a PMA was not executed voluntarily unless the court finds that the party had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed.

The California Court of Appeal recently decided a case interpreting the “7-Day Rule” for PMA’s. In the case In re Marriage of Cadwell-Faso & Faso, the Court of Appeal held that the seven-day waiting period mandated by FC §1615(c)(2) does not apply to parties who are represented by counsel.

In Faso, both parties wanted a PMA. In December 2005, Husband’s attorney drafted the PMA. Husband provided it to Wife and advised her to obtain her own attorney, which she did. Wife requested her attorney prepare an Addendum to the PMA providing money to her in the event of divorce. Husband rejected four different versions of the Addendum. On May 17, 2006, Wife called off the wedding because they could not agree to terms for the PMA/Addendum. The parties subsequently spoke, agreed to terms, and Wife’s attorney prepared a new version of the Addendum. The revised Addendum was faxed to Husband on May 19, 2006 and forwarded to his attorney. The parties signed both the PMA and the Addendum. Prior to signing, Husband was advised by his attorney that the Addendum was not enforceable because it was not being signed seven days after he received it (it was being signed 6 days after). Wife was not told this information. Wife signed the PMA/Addendum and married Husband believing the Addendum was valid. Husband signed the PMA/Addendum believing it was invalid.

Although the trial court condemned Husband’s behavior finding that he “shrewdly” maneuvered Wife to the alter “in a manner that frustrated her desire to reach a mutually acceptable agreement,” it ruled that the Addendum was unenforceable due to the seven day waiting period. The fifth version of the Addendum was not presented to Husband seven days in advance of signing.

Wife appealed and the Court of Appeal reversed, holding that the Addendum was enforceable and that the seven day waiting period only applies to unrepresented parties.

This reinterpretation (or clarification) of the Family Code is just one of the many pitfalls clients and their attorney’s face when preparing, enforcing or disputing PMA’s.

I do wonder if the decision would have been different if the trial court did not find that Husband was the “bad guy”, who hid his belief the Addendum was invalid from Wife and shrewdly maneuvered her to the alter. Under different facts in a future case, the court very well may “clarify” the statute to arrive at a different result, particularly to protect a more innocent party. Also, this “represented party” exception to the seven day rule may not apply to PMA’s signed prior to January 1, 1986, when the Uniform Premarital Agreement Act became effective.