Premarital Agreements

In California, the law determines the characterization of assets, obligations and income of married persons. Essentially, everything acquired after the date of marriage by either spouse is considered to be jointly owned by both spouses.

The law allows persons who intend to marry to change how their assets, obligations and income will be characterized by Pre-Marital Agreements. These agreements are contracts between persons who intend to marry.

Pre-marital Agreements vs. Post-martial Agreements

Spouses who are already married can also enter into similar agreements. Theses are called post-marital agreements. The main difference between the two is the level of duty owed to each other when reaching the agreement. After persons marry they have a fiduciary duty to each other that people who are not married do not have. Therefore, if a spouse hides anything from the other spouse when reaching the agreement, it is more likely that the agreement will be overturned by the court in the event of a dispute.

Enforceability of Pre-marital Agreements

Although persons who intend to marry do not have the same duty to each other as married persons, a pre-marital agreement may still be overturned by the court in the event of a dispute if the court finds any of the following:

• One person did not fully disclose information relating to his or her assets or obligations to the other
• Undisclosed information could not have reasonably been known
• Further disclose was not waived
• Both persons did not have his or her own attorney
• Both persons could not read and understand the agreement document
• Duress, fraud or undue influence was involved

Therefore, if pre-martial agreements are to be enforceable, it is important that pre-marital agreements are carefully drafted and executed under circumstances which eliminate any appearance of unfairness.

Estate Planning Use of Pre-marital and Post-Marital Agreements

There are many circumstances where pre- and post marital agreements are useful in estate planning, because the law creates rights for spouses on death that are not appropriate for all families. A common example is when one spouse is ill and on Medi-Cal and the family's assets are needed to support the other spouse. Spouses can agree to characterize all the assets as the separate property of the spouse who is not on Medi-Cal, thereby avoiding a claim for reimbursement after death. Another example is that when persons who have substantial assets marry, they may agree to avoid the laws that apply to married persons at death will not apply to them, or only apply under circumstances.

We can help you determine if a pre or post-marital agreement will help meet the needs of you and your family, and we can draft them so that they will be more likely to be enforced in the event of a dispute.

For specific information and legal advice regarding pre-marital or post-marital agreements, please call and schedule your free initial consultation with a Van Sickle & Rowley Estate Planning Attorney.