What You Need to Know About Prenuptial Agreements

Introduction: Prenuptial Agreements (“Prenups” or Premarital Agreements) are becoming more and more popular. Initially only popular among people that were previously married, many more getting married for the first time are realizing the benefits of a Prenup.

Question: Dear Mr. Cheng – I am getting a divorce. I do not understand why I am being told by my attorney that the prenuptial agreement I signed with my husband is invalid. He is claiming that if he knew how wealthy I was he would not have signed an agreement in the first place. My attorney says that the judge may throw out the agreement. I am totally confused. I paid an attorney to draft it and my husband signed it willingly. Why should I have to pay for him? He cheated on me with my secretary and now he wants to cheat me out of my money. Can you help me? Cindy – San Marino

Answer: Dear Cindy, thank you for your question. A Prenuptial Agreement is essentially a contract between two people. When examined they are viewed like any other contract with some additional requirements based on various family law statutes.

I explain prenuptial agreements like insurance. No one buys auto, life, or property insurance with thehopes of using it. In the same vein, no one should write a prenuptial agreement with the hopes of divorce. However, like any insurance, if you get a divorce without a prenuptial agreement, life can become very expensive. A typical non-contested divorce can be about $3,000-$4,000.00. A contested divorce can be substantially more expensive. I have seen some divorces cost as much as large corporatelitigation. Family law attorneys are some of the most profitable attorneys out there because not only is it expensive, but family law divorces are very emotional. Many times, emotions drive lawsuits when they really should be settled.

Prenuptial Agreements Help Settle Future Disputes. One of the things I tell people is that a prenuptial agreement can settle future disputes without much cost. Like I stated earlier, a Prenup is like a contract. Hence, a Court will adhere as closely to the contract as possibly, disregard any things that are ambiguous against the drafter, and throw out the contract entirely if it unconscionable. Hence, many issues can be settled years in advance. For example, spousal support or alimony can be settled in the prenuptial agreement so that when divorce takes place the Court can rely on the parties’ contractual decision andnot have to make a decision for them.

Courts Support Premarital Agreements. When I used to work for judges in the Los Angeles Superior Court, they were always happy when a premarital agreement was presented to them because they were left with very few issues to resolve. Provided the agreement was freely entered into by the parties (no deception, duress or undue influence) and not violative of public policy, premarital agreements are favored in family law dissolutions. S

uggestions to Prevent a Void Premarital Agreement. Many agreements are written so poorly that many judges have no choice but to void portions of a Premarital Agreement or throw out the entire contract entirely. The following are suggestions to keep that from occurring:

(1)Do not raise issues about children. Premarital agreements cannot make decisions about children. For instance, child support, legal decisions for children, etc. Any statements made about children areeasily stricken, and sometimes raise an eyebrow in the judge’s mind that this is a voidable contract.

(2)Have an attorney represent the other side. The chance of a person raising an argument that the agreement is unconscionable substantially increases when the person signing it is not represented.

(3)Give the person reviewing it another 30 days after all changes have been done. By law, the person reviewing the agreement needs 7 days to review it. However, I always recommend additional time so that no one can say that they were forced into an agreement.

(4)Have it translated into a language they understand. I do not know why if you are looking to protect your assets, you would risk a person arguing to a judge that he/she did not have the ability to read it. It makes absolutely no sense. Enough said.

(5)Always favor disclosure versus vagueness. If you are going to spend the time and money to write a Prenup why would you want certain clauses or information to remain ambiguous? The purpose of a Prenup is to give people full information so they know what they are giving up. If you are debating between full disclosure and partial or no disclosure at all, give it up.

Most Prenuptials are Voidable for the Same Reasons. Remember, courts want to enforce agreements. But many times they cannot or will not. There are essentially two bites at the apple when it comes to overturning prenuptial agreements. But no matter when a person seeks to overturn the prenuptial agreement the argument usually is that the agreement itself is unconscionable. A premarital agreement is unconscionable when it is proven:

(1)The party was not provided a "fair, reasonable, and full disclosure" of the other party's property or financial obligations;

(2)He or she did not voluntarily and expressly waive in writing any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and

(3)He or she did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Conclusion. Premarital Agreements are awesome. They give people the flexibility and cost savings that are needed to ensure that should dissolution occur the monies paid are reasonable and not just outrageous attorney fees. Make sure if you get one that it is done by a reliable and reputable attorney. The way a Premarital Agreement is written can substantially change the outlook of any family law dissolution.

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