California Prenuptial Agreement Info
California Prenuptial Agreements
Generally speaking, the definition of a prenuptial, premarital, antenuptial agreement (yes, those are three names for the same thing) is a contract drafted between two soon-to-be spouses that is not effective until marriage. More specifically, a Prenuptial Agreement (more formally called a Premarital Agreement in Cali) is again, a legal contract that is drafted between two parties prior to getting married, and in California, like most states, is effective upon marriage. California’s Uniform Premarital Agreement Act (UPAA) is the law of the land in California as pertains to prenups, and outlines the rules and requirements for a valid agreement. The terms of a prenup agreement may outline the rights to property acquired prior to or after marriage – including but not limited to, assets, debt, inheritance, gifts, real estate, income and earnings, as well as future interests. A prenup agreement will also specify what will happen to this property while married, in the event of separation, divorce, or death. Your Premarital Agreement can also contract to the rights of spousal support, including the waiver of support, but cannot contract to child support. If you intend on waiving or specifying how spousal support may be paid in the future, make sure to read the details below. California’s UPAA outlines rules on how this must be done. What is the UPAA and how does it apply to prenups? Here’s an explanation.
What to include in a valid California Prenup
For a California prenup to be considered valid, you should keep in mind the following:
- The Agreement must be in writing
- The terms must be lawful
- Signatures from both parties (HelloPrenup recommends initialing each page, and having your signatures notarized!)
- Signed voluntarily (without being under duress, intimidation, deceit, etc.)
- Notarized signatures (no, you cannot skip this step!)
- There should be seven days in between receipt of the final agreement, and signature. This is to allow enough time to retain counsel if you would like legal advice or representation.
- Full disclosure of all financial assets *Do not skimp on this*
- If a party is waiving their right to spousal support, they must have had representation at the time of signing the agreement in order for that provision to be enforceable. See below to read the fine print, straight from the source.
- Both parties should be represented by their own attorneys, unless there is a written statement of waiver; (HelloPrenup offers this written waiver as an option!)
What to exclude from your California prenup
To make sure that your prenup comports with California law, make sure not to include…
- Child custody or child support
- Excluding the right to counsel
- Incentive to commit illegal acts
- Incentive for divorce
- Unfair, unjust, or deceptive terms
- Be aware that if you or your future spouse plan to waive or modifying spousal maintenance, then the Party waiving these rights should be represented by independent counsel.
- Clauses that are not financial in nature, like demanding that one spouse loses weight or changes their appearance
California courts will not enforce verbal prenuptial agreements. If you and your boo want the terms of your prenup to be enforceable if needed in the future, you must have a written, signed and notarized legal document.
Statutes & terms to understand for a California Prenup
*Before diving into the deep end, let’s go through some terminology and phrases that will be used in your prenup – that way you don’t go cross-eyed trying to decipher the legal jargon and miss something.
California Premarital Agreement Statute
If you would like to get a prenuptial agreement in California, you must comply with the following:
- The agreement must be entered into voluntarily and cannot be unconscionable;
- Signatures should be notarized
- Full disclosure of all financial assets (this is important!)
- If one or both parties choose not to obtain attorney representation, the party waiving that representation must sign a written statement of waiver; (HelloPrenup offers this written waiver as an option!)
- If a party is waiving spousal support, they must have had an attorney at the time they signed the agreement for that waiver to be enforceable
- There must be at least 7 days in between the final agreement and when the parties sign it. This requirement is important to provide parties enough time to obtain legal representation if they want it. Here is a helpful write up on this subject by a California attorney.
The California Family Code contains the California Premarital statute, also known as the California UPAA: Cal Fam Code §1610-1617
California’s “7 Day Rule”
- The California Family Code states that there must be at least 7 days in between the final version of the agreement to when they sign it. This requirement is important to provide parties enough time to obtain legal representation if they want it. Here is a helpful write up on this subject by a California attorney.
How the Barry Bonds Case Changed California Prenups Forever
The Barry Bonds case is a California Prenuptial Agreement case that was decided in 2000 by the California Supreme Court. The Bonds case is considered one of the most (in)famous prenup cases in California because it forever changed how prenups in the state would be drafted. Why is this case so important? It changed how prenups in California must be drafted.
Barry Bonds, the San Francisco Giants baseball player and his then-wife Sun married in 1988. Before the couple married, Bonds asked Sun to sign a prenuptial agreement, stating that Sun would waive the right to any of Bonds’ income, earnings, or acquisitions during their marriage. At the time, Bonds was earning a significant sum.
Bonds hired an attorney to draft the prenuptial agreement, and Sun signed the agreement without consulting or hiring an attorney. Fast forward six years and two children later, and the couple filed for divorce. At the time of divorce, Bonds’ salary had increased significantly. On the other hand, Sun did not work during the marriage. Prior to the marriage, she had worked as a waitress and bartender, and had at some training in cosmetology. However, none of these jobs were likely to earn her income approximating that of her husband, a famous baseball player. Even though Sun had been unemployed at the time she signed the premarital agreement, she had voluntarily waived any interest in her husband’s earnings over the course of the marriage.
As expected, Sun fought to have the California prenup declared unenforceable and to have alimony instituted. Her attorneys argued that the provisions of the agreement could not be enforced because she had no lawyer at the time she signed the agreement. The Superior Court upheld the prenuptial agreement, and Sun appealed. The decision of the lower Court was reversed. After an appeal by Bonds to the Supreme Court of California, the case was decided in favor of Bonds and the Prenuptial Agreement was enforced. The Court concluded that the agreement was valid and was voluntarily entered into by both parties prior to their marriage, and thus should be enforced. This decision lead to wide media coverage and an outcry of public opinion in favor of Sun.
Life before Bonds…
Before the Bonds case, California courts recognized prenuptial agreements if they were signed by both spouses, even parties were not represented by their own attorneys. The Bonds case received notable press, and the public sided very clearly with Sun. Since the Bonds case that inspired change in California law, prenuptial agreement requirements in California are now much more clear. The case spurred a change in legislation in California, and the California Family Code Section 1615 was born.
Term used for Divorce: “Dissolution of marriage”
“Dissolution of marriage” is the term used in California to refer to a divorce. A dissolution of marriage occurs when two people, who have been legally married, begin the court process to have the marriage ended. In some states, the term “dissolution of marriage” refers to the general process of a divorce. In other states, the term “dissolution” is used in reference to a “no-fault” divorce, whereas the term “divorce” refers to a “fault” divorce. Now, we do not mean to confuse you with the varying meanings and uses of these terms. Rather, it is important you understand that certain legal terms can refer to certain processes that differ greatly per state. In California, the term “dissolution of marriage” is often used in place of the more commonly used term “divorce.”
Below we outline some more specifics about divorce in California. Although you may never need to use this information, we think it is important to understand. The more you know…
The following excerpt is taken from the CA Family Code, s.2010:
In a proceeding for dissolution of marriage…or for legal separation of the parties, the court has jurisdiction to inquire into and render any judgment … concerning the following:
(a) The status of the marriage…
(b) The custody of minor children of the marriage.
(c) The support of children for whom support may be ordered, including children born after the filing of the initial petition or the final decree of dissolution.
(d) The support of either party.
(e) The settlement of the property rights of the parties.
(f) The award of attorney’s fees and costs.
How to end a marriage in California
The 3 ways that a couple can legally end a marriage is through divorce, legal separation, and annulment. Only one party needs to begin the process of ending a marriage (but don’t get us wrong, it takes two to make it work!) If one party wants to divorce the other party, it is within their sole right to do so and the other non-participating party does not have to agree in order to begin the process. If a non-participating spouse does not partake in the proceedings, a default judgment will be entered and force the divorce to proceed.
Each state has residency requirements that must be fulfilled before you can divorce in that state. In California, these are the residency requirements:
- You or your spouse must have been a resident of California for at least six months prior to filing for dissolution
- You or your spouse must have lived in the county where your dissolution will be filed for at least three months prior to filing
No Fault Divorce
By default, California is a “no fault” divorce state – meaning, either party can file for a divorce without having to prove that the other party did something “wrong” to justify the dissolution of the marriage (these are called “fault grounds.”) Unlike some states, California does not have a minimum legal separation period required before filing for a dissolution of marriage. To proceed with a no fault divorce, only one party of the marriage needs to state that the marriage is not working out, and thus claiming “irreconcilable differences.”
>> For the entire fine print review Cal Fam Code §2024
Official term for property not considered part of the marital estate
Separate property in California by default is property owned before the date of marriage, acquired after the date of legal separation, acquired during the marriage by way of inheritance or gift as far as “gift” defined by the California Family Code. If this is not to your liking, you’ll need to specify it clearly in a legal document (such as a prenup or postnup) otherwise.
Official term for Spousal Support (also commonly known as Alimony) Upon Dissolution of the Marriage or Legal Separation
California offers a few different types of spousal support, including: temporary support, rehabilitative support, reimbursement support, and permanent spousal support.
A supported spouse who may request temporary spousal support, to be granted by a judge.
Under the California UPAA (the California Prenuptial Agreement statute), if you or your future spouse plan to waive your rights to Spousal Support, or agree to terms relating to Spousal Support that differ from California law, it is imperative that the waiving party be represented by an attorney at the time the agreement is signed. If that party is not represented by a lawyer, the agreement is at risk of future enforcement and the Spousal Support waiver will not be enforced. Now, California is pretty clear on this point, which is why we want to highlight it for you. In most states, there is a higher likelihood that any waiver of Spousal Support will be set aside, and whether or not this is the case will heavily depend on the financial circumstances of the parties at the time of divorce and whether or not one party will be left destitute. California is unlike many other states, because it’s UPAA spells out exactly what will happen to the Support provision if the waiving party is not represented.
Ok, so now how can you use HelloPrenup to create your prenup?! Many engaged California love birds choose to use the HelloPrenup platform to negotiate and draft their prenup, and then choose to seek legal counsel prior to signing.
Circling back…The requirement of “access to independent counsel” represents the view that representation by independent counsel is crucial for a Party waiving a right as important and life altering as Spousal Support in a California prenuptial agreement. The California Family Code does require representation for an agreement to be enforceable. See California Family Code § 1612(c) linked below for the full text.
See subsection (c) of the California Family Code relating to this provision:
“(c) Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel.”
An Important Case Relating to California Spousal Support
In January of 2013, the California Court of Appeals ruled on the case In re Marriage of Facter, 212 Cal. App. 4th 967, that the spousal support waiver that was present in the Facters’ prenuptial agreement was unenforceable because it is unconscionable. This holding set a precedent for California courts moving forward. In the Facter case, at the time the Premarital Agreement was signed, the wife was an unemployed high school graduate and single mother of two children. Meanwhile, the husband was an accomplished Harvard educated attorney who earned about $500,000 per year at the time of the prenuptial agreement. To get a better handle of the scope of this prenuptial agreement, here are some of the provisions it included.
1. None of the property acquired during the marriage would be considered community property.
2. Section 2 of the agreement detailed that upon dissolution of the marriage, wife would receive $100,000, plus an additional $100,000 dependent on certain factors. The factors included that if the marriage lasted at least 15 years and the husband was a partner at his law firm for at least seven years, wife would receive one half of the equity in the marital home, minus husband’s down payment and costs of sale. Wife would also receive the household furnishings and a Jaguar.
3. The agreement stated that wife would waive her right to spousal support.
4. The agreement also stated a limit on the amount of any child support, and stated that each party would pay their own attorney fees.
When the prenup was challenged in court by the wife, the California court held that the waiver of spousal support was unconscionable because of the dramatic disparity in the husband and wife’s “respective incomes and assets at the time they entered into the Agreement,” and the court further reasoned that there existed “a significant inequality of bargaining power.” The court reasoned that the husband and wife’s financial situations if the contract was enforced would also make the spousal support waiver “unjust.” The court detailed their reasoning, citing that the husband had amassed approximately ten million dollars in assets and earned one million dollars per year at the time of divorce, while the wife remained unemployed and had no separate assets of her own during the marriage.
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