Should I get a prenuptial agreement before I get married in San Diego, California?

The most recent controversy in Hollywood is the split between multi platinum recording artist, Katy Perry, and movie actor, Russell Brand, who announced the end of their marriage on December 30, 2011 after only 14 months. Rumor has it that the couple did NOT have a prenuptial agreement. Katy Perry made a record breaking $45 Million during the marriage. Russell Brand only made about $7 Million. In California, which is a community property state, assets are split evenly among the couple if there is no pre-nup, meaning Perry stands to lose over $20 million not including the two homes the ex-couple purchased together during the marriage.

A prenuptial agreement is a contract between two people about to get married that spells out how assets will be distributed in the event of divorce or death. Premarital agreements or “pre-nups” establish the property and financial rights of each spouse.

At one time, a premarital agreement that was not made in contemplation that the parties would remain married until death was considered to be against public policy in California and other jurisdictions, but the CA Supreme Court concluded in 1976 that the validity of a premarital agreement “does not turn on whether the parties contemplated a lifelong marriage” and in 1985, the California Legislature adopted most of the provisions of the Uniform Premarital Agreement Act. Pursuant to Family Code section 1615, a premarital agreement will be enforced unless the party resisting enforcement of the agreement can demonstrate either (1) that he or she did not enter into the contract voluntarily, or (2) that the contract was unconscionable when entered into and that he or she did not have actual or constructive knowledge of the assets and obligations of the other party and did not voluntarily waive knowledge of such assets and obligations.

The most important factor of a solid premarital agreement is honesty. Both parties must fully and completely disclose of their assets. If it turns out either person was hiding something, a judge can throw out the entire contract. The document should be signed as early before the nuptials as possible to avoid the appearance of coercion, another key reason why some agreements are rendered null and void by the court. A valid pre-nup should also be “fair” and will not leave one of the parties destitute.

You should consider getting a pre-nup if you fall into any of the following categories:

• You have assets such as a home, timeshare, stock or retirement funds
• Own all or part of a private or family business
• You may be receiving an inheritance
• You have children and/or grandchildren from a previous marriage
• You or your spouse is much wealthier than the other
• One of you will be supporting the other through college
• You have loved ones who need to be taken care of, such as elderly parents • You have or are pursuing a degree or license in a potentially lucrative profession
Generally, a prenuptial agreement can deal with the following:

(a) Division of property on divorce;
(b) Whether particular items are considered community property or separate property;
(c) Ownership of the marital residence;
(d) Responsibility for premarital debts;
(e) Distribution of property upon death;
(f) Spousal support obligations (in most States);

Although most states permit prenuptial agreements to deal with spousal support, a court is allowed to invalidate the spousal support provisions if the judge believes them to be unjust. This will normally occur in long term marriages if there is a great disparity between spouses’ incomes and there is little or no support being paid.

(g) Financial responsibilities during the marriage;
(h) Under which state’s law the pre-nup is valid (otherwise it will be the state of the divorce and not the state of the marriage);
(i) How disputes about the pre-nup are to be resolved (for instance through mediation or arbitration); and (j) Sunset clause – many couples allow that their prenuptial agreement will not be valid if they are married for a certain number of years.

However, there are a number of limitations to prenuptial agreements.

Prenuptial agreements cannot deal with the following:

(a) Custody of the children (this includes things such as in what religion to raise the children, their schooling, etc.);
(b) Visitation to the children;
(c) Child support;

A pre-nup cannot include child support or child custody issues. The court has the final say in calculating child support. The court determines child support based on a “best interest of the child” standard, with several factors at play. A court would never uphold a provision of a prenuptial agreement that dealt with child support, child custody, or visitation, because these are issues of public policy. The court retains the power to decide what is in the child’s best interest and will not deny a child the right to financial support or the opportunity to have a relationship with a fit parent.

(d) Anything “illegal” (as with most contracts);
(e) Anything “unconscionable” (unfair); and (f) Anything that is thought to encourage divorce.

Under section 1611 of the California Family Law Code, a premarital agreement in California must be in writing. The next section, California Family Law Code section 1612, sets out what can and can’t be in a premarital agreement in California. This is fairly similar to most other states. Generally any financial issue can be dealt with in a premarital agreement. Issues relating to children, including child support and child custody are not permitted as stated above. California has special provisions regarding spousal support in premarital agreements. Basically, provisions regarding spousal support will not be enforced unless the person whose receipt of spousal support is limited or waived had independent counsel before entering into the agreement.

Probably the most important part of the California Uniform Premarital Agreement Act is found in section 1615, which sets out when a premarital agreement in California is enforceable, and when it is not. The usual caveats apply here: there must be financial disclosure, the premarital agreement must not be unconscionable, there must not be any coercion, and the parties must understand what they are signing. California requires that there be at least seven days between when a party is first presented with an agreement and when the agreement is signed.

Finally, although items that deal with particular aspects of married life, such as the division of household responsibilities, are allowed to be in a prenuptial agreement, including these may actually increase the likelihood of a prenuptial agreement being invalid. If this sort of thing is important to you and your spouse, it is best to put them in a separate agreement.

Contact a Family Law Attorney today to discuss your options. Divorce attorney, Nancy J. Bickford is the only Certified Family Law Specialist in San Diego with an MBA and CPA. Call 858-793-8884 to make an appointment.