A big California case came out this week and it’s a juicy one. It also shed some light on an important spousal support issue. Specifically, it clears up some confusion as to when a prenuptial provision limiting spousal support can be invalidated based on unconscionability.
Let’s begin with a little history lesson. In 1986, California adopted the Uniform Premarital Agreement Act (UPAA) (located at Family Code section 1600). Couples were able to enter into premarital agreements as long as they were not contrary to public policy (plus a few other restrictions). Importantly, at that time, spousal support limitations could not be enforced if they were unconscionable at the time the agreement was executed.
Fast forward to 2002. The legislature amended section 1612, altering the rule regarding unconscionability of spousal support agreements. Previously, agreements could be invalidated if they were unconscionable at the time the agreement was executed. After the amendment, spousal support agreements could now be invalidated if they were unconscionable at the time of enforcement (i.e. during separation/divorce). This change was clear. What wasn’t clear was if this change applied to pre-2002 prenups. Enter the Zucker case!
Mr. and Mrs. Zucker married in 1994. Prior to marrying, Mr. Zucker insisted on a premarital agreement as he was wealthier than his soon-to-be wife. There was also an educational disparity between the couple, potential mental health issues that Mrs. Zucker struggled with, and at the time, Mrs. Zucker was pregnant (check out all the drama here!). The prenup contained a provision limiting Mrs. Zucker’s potential spousal support to $6,000 per month with a one-time payout of $10,000. Mr. Zucker would also get to keep the family home in the event of divorce.
Seventeen years later, the couple called it quits. Importantly, Mr. Zucker’s net worth had grown to $32 million at this point. Mrs. Zucker, on the other hand, had been unemployed for the entirety of the couple’s marriage while she raised the couple’s six children. This resulted in a huge disparity of wealth.
Mrs. Zucker attacked the validity of the couple’s prenup arguing that it was presently unconscionable. Mr. Zucker, however, sought enforcement of their agreement. He argued that the agreement was conscionable at the time that it was executed and because it was a pre-2002 prenup, Mrs. Zucker could not challenge the validity based on unconscionability at the time of enforcement.
At the end of the day, the court agreed with Mrs. Zucker. It would be virtually impossible for Mrs. Zucker to maintain any semblance of the lifestyle established during the 17-year marriage absent spousal support. In fact, it would take approximately $37,000 per month for Mrs. Zucker to maintain that lifestyle. The $6,000 a month provided by the prenup just wasn’t going to cut it. Therefore, the spousal support provision was invalidated.
So, how did the court arrive at this conclusion and why is it important? While the court determined that the 2002 amendment (which changed the conscionability analysis to whether the agreement was unconscionable at the time of enforcement) only applies to prenups from 2002 on, it found another avenue to invalidating unconscionable spousal support provisions.
Above, we touched on the fact that couples cannot enter into prenups which are considered contrary to public policy. Well, the Zucker court considered the spousal support provision in that case (which was unconscionable at the time of enforcement) to be contrary to public policy. Bingo! The provision could now be invalidated. The court has authority pursuant to section 1612 (a)(7) to shape public policy regarding premarital spousal support agreements. And, that is just what the court in Zucker did.
The moral of the story is: (1) California courts can invalidate spousal support agreements that are determined to be unconscionable at the time of enforcement (i.e. separation/divorce) for all prenuptial agreements from 1986 on. So, while drafting your premarital agreement, you and your future spouse need to think about what your situation, financially and otherwise, will look like down the road to ensure that your agreement will be considered conscionable at the time of enforcement.
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Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected]