Premarital Agreements – An Interstate Issue?

The main purpose of a premarital agreement is to predetermine the treatment or division of property in case of death or divorce.In addition to predetermining the treatment or division of property in case of death or divorce, premarital agreements may also restrict spousal support payments once the divorce has been finalized. You may come across a variety of different prenups or premarital agreements. Some of them completely eliminate community property while substituting it with an alternate plan. On the other hand, other agreements state what both partners bring to the marriage (independent property). These agreements also make room for sharing the income earned over the course of the marriage.

In the drafting of premarital agreements, it is critical to foresee that the prenup might be subjected to litigation in a different state(s). It is sometimes possible to predict the places in which the parties may finally settle on the basis of factors like accessibility of close contacts or ownership of vacation homes in certain states.

In an attempt to protect clients, divorce attorneys often advise them to hold on to counsel in such jurisdictions and seek their help in drafting the premarital agreement. If this is not done, then the client should be warned that the prenup might not be validated in other states or countries. Living in a highly modern and dynamic society, it isn’t uncommon for a client to shift base to a state where the premarital agreement might not be applicable.


Changes to Premarital Agreement Legislation in California

There has been a dramatic change in the premarital agreement legislation in California over a period of time. The premarital agreement legislation underwent transformation because of two different cases in the year 2000: The Marriage of Fireman and Pendleton (24 Cal 4th 39), and the Barry Bonds case, In re Marriage of Bonds, handled by the California Supreme Court.

In the year 2002, a statute was passed by the state of California in order to deal with these cases in the Supreme Court. This statute limited the time of entry into premarital agreements. Premarital agreements have become increasingly popular, especially among partners (cohabitating or married) who might have dramatic differences in income, wealth, family businesses, children from earlier marriages (security of inheritance rights), and pension rights.

The new premarital agreement legislation in California requires you to present the agreement to your partner a minimum of seven days before the signing. Further, it also states that the limitations related to spousal support will be established during the trial and that these limitations will applicable in case there is no counsel representing the parties during the trial.


Interstate Issues Related to Premarital Agreements

In California, there are no specifications with regards to dealing with premarital agreements that are formulated and entered into in other states (and may not be in line with California legislation). Such an agreement needs to state that it will be enforceable in accordance with the law of the particular state in which it is established. However, the handling of the agreement will still vary depending on the Courthouse Judge in California, so the results might be fairly unpredictable.

If your partner has presented you with a premarital agreement, it may be a good idea to get acquainted with your rights and duties before signing the agreement. Seeking the guidance of an experienced attorney is advisable when reviewing the contents of a premarital agreement. This will allow you to make necessary changes before the agreement is finalized.

Premarital agreements can serve as important tools for couples, particularly those holding significant property and other assets before marriage. Careful and thoughtful consideration of the premarital agreement is important to ensure that your financial and emotional security is safeguarded under all circumstances in the future.

Shulman Family Law Group

Maya Shulman, Esq.