Articles Posted in Premarital Agreements

Child superstar Miley Cyrus recently got engaged to fellow actor Liam Hemsworth.  

The couple first met in 2009 on the set of the film The Last Song. Although their relationship has been a bit rocky, Cyrus, 19, and Hemsworth, 22, agreed it was time to get married. Much of the recent media attention has been critical of the pending nuptials for the young couple. The main argument against the marriage is that Cyrus is not old enough to make such a commitment. Newly engaged couples are eternally optimistic and excited for the future; however, much talk is already surrounding a potential Cyrus-Hemsworth divorce.

In New York, a man is suing his ex-fiancé for contributions made in contemplation of their upcoming nuptials. Specifically, Steven Silverstein is asking for $19,000, which she allegedly withdrew from their joint bank account prior to the most recent split, $28,000 in rent to represent her ½ contribution for the apartment they shared, and $27,000 he spent in nonrefundable deposits a wedding photographer, hotel rental, videographer, and furniture rentals. The couple was engaged for two years during which Kendra Platt-Lee broke off the pending wedding twice.

Platt-Lee has since moved to San Diego and is pursuing a career in marketing. According to her lawyer, Platt-Lee denies all allegations and even plans to file a countersuit against Silverstein for failure to return her personal belongings. It is her position that relationship was resolved when she returned the $32,000 engagement ring he had given to her. The question for the Manhattan Supreme Court is whether the cash, the rent, and the deposits were all gifts from Silverstein to Platt-Lee or whether he has a right to reimbursement now that she has cancelled the wedding.

On May 19, 2012, Priscilla Chan married the creator of Facebook, Mark Zuckerberg. The couple met in 2003 at a fraternity party at Harvard where they both attended college. The wedding ceremony took place at the home they share in Palo Alto and most of the details are still being kept private. However, the wedding date has sparked the most media attention. Mark and Priscilla tied the knot just one day after Mark’s company went public. On his wedding day, Mark owned 503 million shares of Facebook, which at the time, was worth an estimated $17 billion. Sources indicate that Priscilla has no interest in Mark’s fortune. In fact, she recently graduated from medical school at the University of California, San Francisco and plans to pursue a career as a pediatrician.San Diego is located in one of the few states that have adopted community property laws. In community property states, any property acquired prior to marriage is separate property. Separate property will be awarded to the owner upon divorce without offset. Anything acquired after marriage is community property and generally distributed equally upon divorce. According to these laws, any property owned by Mark or Priscilla prior to marriage is their respective separate property and will be distributed to the owner upon divorce. However, after marriage, any earnings of Mark or Priscilla will become community property. In other jurisdictions, courts apply the equitable division rules. Under this statutory scheme, all property owned by either party at divorce is divided equitably by the courts regardless of ownership prior to marriage.

Although Mark has made it clear that his Facebook fortune is his separate property by marrying Priscilla the day after his company went public, the distinction between separate and community property can become blurred over time. Once separate property becomes commingled with community assets, the spouses must keep diligent records of the source of the funds or risk transforming once separate property into community property.

The main question upon the Zuckerberg divorce would be whether Priscilla is entitled to the increased value, if any, of Mark’s Facebook stock. The general rule in California is that stock acquired prior to marriage remains the owner separate property upon divorce or legal separation. However, the Zuckerberg case will be different because it is Mark’s job to continue to contribute to the growth of Facebook as well as its stock. So this situation begs the question – is the increased value of the Facebook stock merely stock or Mark’s earnings during the marriage? One possible solution to this gray area would be the creation of a premarital agreement. Prior to marriage, Priscilla and Mark had the option of determining how the increased value would be divided upon divorce. In the past, Priscilla had Mark sign a “relationship agreement” outlining the details of their relationship before she would agree to move to California to be with him. Considering the massive fortune at stake and the previous history between the parties, it is likely that the parties executed a premarital agreement prior to marriage.

A New York Court recently granted the state’s first contested no-fault divorce. While New York’s no-fault divorce law is only one year old, California enacted no-fault divorce over 40 years ago, in 1970.

Wife filed for divorce under New York’s year old no-fault divorce law on the grounds that her marriage was “irretrievably broken.” Wife testified that she has not had marital relations with her Husband for over five years, they slept in separate bedrooms and never ate meals together. Although she is in poor health, she testified that her Husband had not taken her to her doctor’s appointments in the last five years or even asked about her health for the past ten years. She further testified that she had “no hope for the marriage … and that her only wish is for a divorce so that she can have one-half of her marital assets and leave them to her four children before her demise.”
Husband contested the divorce because he wanted to remain married saying he “worked hard to acquire everything the parties had” and didn’t want to lose it in a divorce.

The Court applied the new no-fault law and granted Wife’s request for a divorce stating, “[I]t is this Court’s determination that the parties’ relationship has so deteriorated irretrievably …the plaintiff is entitled to a judgment of absolute divorce,”

In California, a no-fault divorce allows for a divorce without requiring either party to present evidence of wrong doing or breach of the marital contract. The idea behind a no-fault divorce was that removing the fault requirement would also remove some of the bad blood from the divorce process, and allow couples who wanted to break up to do so without having to make false allegations to justify the divorce to the court. No longer would couples, or even just one party, who wanted a divorce have to choose between lying under oath in open court or remain married.

Prior to no-fault divorce in California, a divorce could be obtained only through a showing of fault. This requirement meant that one spouse had to plead that the other had committed adultery, abandoned them, was cruel, or some other culpable acts. To get a divorce, parties often lied, colluded and committed fraud upon the court in order to get around the statutory limitations of the fault based requirement. Prior to the enactment of no-fault divorce, many prominent attorneys and judges in California believed that the “legal fictions” used by parties to satisfy the requirements for divorce made oaths meaningless and threatened the integrity of our legal system by encouraging perjury. Without committing perjury, many couple could not obtain a divorce, even if both parties wanted a divorce.

California’s no-fault divorce law provided a straightforward ground for ending a marriage – irreconcilable differences. Not only did California’s no-fault divorce laws eliminate the fault requirements to obtain a divorce for spouses seeking a divorce by mutual consent, but also in cases where only one party to a marriage wanted a divorce.

No-fault divorce ushered in other changes to divorce laws. Under no-fault divorce, gender-based responsibilities such as the Husband always being responsible for child support while the Wife was always responsible for custody gave way to gender-neutral responsibilities such as both parties being eligible for custody and responsible for child support.

As an interesting side-note, California’s no-fault divorce policy even invalided a Marital Agreement that was intended, after Husband had an affair, to “preserve, protect and assure the longevity and integrity of an amicable and beneficial marital relationship between them.” In the Diosdado case, rather than divorcing, the parties agreed to be subjected to a legal obligation of emotional and sexual fidelity to the other. If either party volitionally engaged in certain acts with any person outside of the marital relationship, that party would be in breach of the Marital Agreement, which provided for liquidated damages should the obligation of sexual fidelity be breached. Damages included that the party in breach would be: (1) required to vacate the family residence, (2) solely responsible for all attorney fees and court costs, and (3) pay $50,000 over and above any settlement or support obligations. Of course, Husband had another affair and Wife sued for breach of contract, seeking to enforce the liquidated damages clause of Marital Agreement. However, the Trial Court granted Husband’s judgment on pleadings, because the Marital Agreement was contrary to the public policy underlying California’s no-fault divorce laws. Wife appealed, but the Court of Appeal affirmed stating, “Here, where the agreement attempts to impose a penalty on one of the parties as a result of that party’s ‘fault’ during the marriage, it is contrary to the public policy underlying the no-fault provisions for dissolution of marriage. [See Family Code §2310, Family Code §2335.] For that reason, the agreement is unenforceable.”
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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 Continue reading

According to FOX news, former NFL superstar Deion Sanders has filed for divorce. His wife, Pilar Sanders, filed a response this week in which she alleges Deion was unfaithful. “She accuses him unkind, uncaring, insensitive, cruel and unusual treatment, as well as physical, mental and emotional abuse of her and their three children.” The response urges the court to punish Deion for “immoral, corrupt, lewd, perverted, unnatural, sinful conduct.” Ironically, the response is similar to that filed by Deion’s first wife Carolyn. Carolyn also accused Deion of adultery and “cruel treatment.”

Pilar is requesting that the judge throw out the couple’s prenuptial agreement and instead grant her most of the marital estate. As grounds for this request, Pilar alleges she was under duress when she signed the agreement. Prenuptial agreements, otherwise known as premarital agreements, must be carefully drafted in order to be enforceable in a California family courts.

California Family Code section 1615(a) states that a premarital agreement is unenforceable if not entered into voluntarily. A premarital agreement is presumed involuntary if the party had less than seven calendar days between the day the party was presented with the contract and advised to seek independent legal counsel and the time the party signed the contract. However, it is important to note that this rule does not apply to a party represented by legal counsel throughout the premarital agreement process. Therefore, if a judge concludes that Pilar was in fact under duress when she signed the premarital agreement, the judge is likely to find the agreement unenforceable.

A fundamental element of any contract formation is freely given consent of the parties. This consent is defeated if one of the parties enters into the contract under duress. Duress often appears in California law as a defense to any type of contract actions. It is crucial when drafting and executing premarital agreements to ensure no party signs the contract under duress.
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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;

As a San Diego attorney, clients with premarital agreements often ask whether the spousal support waiver provision in their premarital agreement is enforceable. Whether my client wants to enforce the agreement or have it not enforced, the answer is – it depends.

The Premarital Agreement Act applies to premarital agreements executed after January 1, 1986. For a spousal support waiver to be valid, it must pass the “representation by counsel” and “not unconscionable” requirements.

If the party against whom enforcement of the spousal support waiver provision was not represented by independent counsel at the time the premarital agreement was signed, then the spousal support waiver is not valid. This means: (1) if the parties prepared the agreement themselves without legal counsel, the waiver is not valid; or (2) if Party A wants to enforce the waiver against party B, and Party A was represented by independent legal counsel but Party B was not, the waiver is not valid.

As reported by NBC SanDiego.com, professional skate boarder Tony Hawk recently filed for divorce in North San Diego County. Hawk filed for divorce from third wife Lhotse Merriam. Hawk and Merriam were married in 2006; they have one child.

Raised in San Diego, Hawk is well known for a videogame series based on his skateboarding. Tony Hawk: Ride, a game which involves riding on a skateboard shaped controller, was launched in 2009. Because the game was launched during Hawk’s marriage to Merriam, one question that may arise during the divorce process is whether any intellectual property rights Hawk may have in the game are community property to be divided in the divorce.

Absent a prenuptial agreement to the contrary, intellectual property rights (e.g. patents, copyrights, trademarks, trade secrets) are property to be classified and, if appropriate, divided in a divorce. In a divorce, property is generally classified as either separate property or community property. Property that is classified as community property is then divided between the spouses.

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