Over the years, Premarital Agreements have become increasingly popular. While Premarital Agreements may have once been considered a “taboo,” they are now a common part of the wedding-planning checklist prior to marriage.
Premarital Agreements are generally designed to contract outside of community property law in California to protect a person’s property and/or income. However, a recent modification to the Family Code may have a significant impact on the enforceability of Premarital Agreements.
If you executed a Premarital Agreement prior to January 01, 2020, the Family Code required a non-represented party to wait seven (7) calendar days from the date the unrepresented party was firstpresented with the first iteration of the agreement to the date the unrepresented party signed the agreement. Case law declined to apply this rule to parties who were represented by counsel. Meaning, this seven (7) day rule did not apply to those individuals who executed Premarital Agreements while both parties to the transaction were represented by counsel.
The law has since changed. Effective January 01, 2020, the Family Code mandates that for agreements executed between January 01, 2002 and January 01, 2020, the party against whom enforcement is sought must have at least seven (7) calendar days between the time he/she reviewed the final agreement and the time he/she signed the agreement. This amendment does not apply to nonsubstantive amendments that do not change the terms of the agreement. The amendment to the Family Code is silent as to whether this provision applies to represented parties.
Until there is a change in the Code for clarification purposes or a published opinion addressing this issue, there is a high likelihood that at the time of enforcement, it will be argued by the party who is arguing against enforcement, that the amendment to the Family Code applies to represented parties. Meaning, if neither party was provided seven (7) days to review the final agreement before execution, the party will argue the agreement is unenforceable. If your agreement is unenforceable, then California’s default Community Property law applies – meaning, generally, any property acquired during marriage, other than by gift or inheritance, is considered community property, divided 50/50 in divorce proceedings.
Currently, there is no authority directly addressing this issue. Under existing law, it can be argued that this new law should not be retroactively applied and that the court, in its discretion, should deny such application. There is no guarantee what the Court would ultimately order and the costs of litigating this issue could be substantial.
Since there has been a substantial change in the law and it is unclear at this time if the change in the law applies to represented parties, all who are affected by this new law should consult with an experienced family law attorney to determine whether reaffirming a Premarital Agreement to strengthen its enforceability through the preparation and negotiation of a Post-Nuptial Agreement is recommended.
Of course, the procedure for Post-Nuptial Agreements will need to be followed and again, there will be no guarantee as to enforceability, but this added step can show that even after some time in the marriage, the Premarital Agreement terms were reaffirmed in a Post-Nuptial Agreement.
This article is not intended to provide legal advice. Every issue is unique, and all readers should always consult with the appropriate professionals prior to taking any action/inaction.
Contact the offices of Bremer Whyte Brown & O’Meara LLP today to learn more about the change in the family code and how it could affect the enforceability of your Premarital Agreement.