What is a Premarital Agreement?
A Premarital Agreement, sometimes called a Prenuptial Agreement, is a set of rules created by an engaged couple to govern their financial lives during their marriage and to determine what will happen in terms of property division and spousal support if they should divorce. They believe that they can create their own rules to fit their unique situation, rules that will be preferable to those imposed by California Family Law.
The enforceability of a Premarital Agreement (and sometimes by analogy a Postmarital Agreement) is governed by California Family Law section 1600 et. seq. (Uniform Premarital Agreement Act). The rationale behind the legal requirements rendering a Premarital Agreement valid and enforceable is to ensure that no one is rushed, that signing is voluntary, and that both parties “know what they are doing.”
The statute provides that a substantively “final” draft needs to be in both parties’ hands for at least seven days before they sign it. Theoretically, then, the couple could get the draft on a Friday, and sign it on their wedding day if it is one week later. Recent case law even suggests that if both parties have attorneys, this rule may not be so important. This, though, does not really cure the appearance of a “rush” or an “involuntary signing” and in fact suggests the opposite (that it is rushed and coerced). Therefore, most attorneys prefer to have a seven-day cushion on both sides of the signing: they try to get the draft to the parties at least seven days (preferably more) before the couple signs it, which signing is at least seven days (preferably more) before the wedding.
When making rules about spousal support that differ from existing Family Law, the statute seems to require that each party have an attorney in order to satisfy the “I know what I’m doing” principle. Whether or not there are new rules about spousal support in the Agreement, when each party has his or her own attorney in the process who signs off on the Agreement, it is presumed that they both “know what they are doing.” Choosing not to have your own attorney, then, can be risky, in any case.
Why Have a Premarital Agreement?
There are many important and legitimate reasons why some couples choose to enter into Premarital Agreements. One of the spouses may be part of a family business, which needs to stay uncomplicated and separately owned and managed. The couple may be moving into a home owned by one of the spouses, who wishes to protect his or her separate interest in the property. One of the spouses may have gone through an extremely prolonged, costly and painful divorce, and wishes to create clear “divorce rules” to avoid a potential repeat of this difficult experience. Some couples simply want to plan carefully for their financial future, and wish to have their own set of rules that suit them better than those imposed by existing Family Law statutes. Some couples are very happy with California Family Law, but may contemplate moving to another state and wish to adopt California rules as their own, regardless of where they reside.
Traditionally, the request from one of the spouses or intended spouses for a Premarital Agreement was the beginning of a painful process that often drove a wedge between two people who were supposed to love each other. It was handled only by attorneys, and the process began with what was usually an extremely one-sided draft being presented by the requesting fiancé or spouse as a fait accompli to his or her fiancé or spouse. The attorneys then exchanged and battled over drafts of the “Agreement,” creating a “we-they” situation that felt adversarial and threatening, building mistrust and disharmony in an otherwise secure marriage or on the eve of what was supposed to be the happiest day of parties’ lives. Often, the spouse being asked to sign a Premarital Agreement felt that the Agreement was being forced on him or her and felt mistrusted, unprotected and uncared for by the other spouse. The spouse requesting the Premarital Agreement then interpreted the reluctant spouse’s objections as being greedy and selfish.
Even if the request itself did not create this atmosphere of mistrust, the ongoing battle between the attorneys robbed the couple of their own voice, and made what should have been a joint planning process into an adversarial one. Many simply succumbed to the exhaustion of the process and signed in the end “just to be done.” Mediation and Collaborative Practice are tailor-made for drafting Premarital Agreements, as mediators and collaborative attorneys are trained in mediation and interest-based collaborative negotiation. These processes encourage both parties to develop their goals for the relationship and one another, and to take one another’s concerns and goals into account. These two processes are also well suited in that the parties create and draft their Agreement together, more as a planning process than an adversarial one.
What Does the Process Look Like?
Before a first draft is created, both parties are provided with their “default” Premarital Agreement (according to existing California Family Law), which sets out the rules that would apply if they did not create their own Premarital Agreement.
In mediation, the couple meets with the mediator together - in the collaborative process both parties and their respective attorneys meet together - to discuss which of the “default” community property, separate property and/or spousal support rules the couple wishes to modify in order to respect the following:
Each person’s goals for the marriage;
Each person’s goals for himself or herself;
Each person’s goals for the other person;
Each person’s concerns giving rise to his or her belief that a Premarital Agreement is needed; and
Each person’s concerns about the consequences of a Premarital Agreement in terms of his or her own need for security and for being cared for by the other person.
The mediator or one of the collaborative attorneys usually drafts the Premarital Agreement based on discussions with the couple, and presents the first draft to the parties for their review and comments. Once the couple has provided their input, the Agreement is finalized.
In the Collaborative Process, each party has his or her own attorney to provide advice and support. In mediation, because of the stringent requirements for enforcing these Agreements, most professionals prefer that both parties have their own advising attorneys to educate them as to their legal rights, to support them in the process, to review the final Agreement with the client, and to countersign it. In cases where people are making their own rules about potential spousal support, most professionals agree that it is mandatory that each party has his or her own attorney, and that these attorneys sign the final Agreement.
What About the Rest of the Team?
In a mediated or collaborative Premarital Agreement process, adding professionals other than the attorneys to the team can enhance the process and strengthen the relationship. Working with a financial professional can help the couple understand their finances and make better plans and rules to live by—and also take the fear out of the commitment they are making and the Agreement they are drafting. Working with mental health professionals in the process can prepare the couple for healthier negotiations and for their new life together, particularly when they are blending families and working with difficult emotional issues in the drafting of the Premarital Agreement.