Prenuptial, Postnuptial & Cohabitation Agreements

In California, unmarried parties who live together, parties who intend to marry, and parties who are married can enter into valid agreements creating or altering certain rights, interest, and obligations.

Although the rules relating to the validity and enforceability of these agreements vary widely, all such agreements are designed to provide certainty and predictability to the parties in the event their relationship terminates.

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Often, parties intending to marry wish to define and preserve the separate property character of assets they own and to determine the disposition of that property and property acquired during marriage upon separation, marital dissolution, or death. Frequently, they wish to address their obligations for support, if any, to each other in the event the marriage dissolves.  Married couples often wish to clarify, define, or redefine the character of property in the event of the dissolution of their marriage. Agree or through their conduct may impliedly agree to the treatment of their assets and/or income upon termination of their relationship.

Enforceable agreements can be reached between parties before they marry (prenuptial agreements) conditioned upon their marriage, or after they marry (postnuptial agreements).  Most postnuptial agreements are, in effect, transmutation agreements wherein the parties seek to change the character of property from community to separate, from separate to community, or from one’s separate property to the other’s separate property. Transmutation agreements must be in writing to be enforced and must contain an express declaration by the spouse adversely affected.

Additionally, couples who live together and engage in sexual relations may enter into contracts which define their rights and obligations, if any, owing to each other as a consequence of their cohabitation. The enforceability of cohabitation agreements was recognized by the California Supreme Court in Marvin v. Marvin (1976) 18 Cal.3d 660). Unlike premarital agreements and transmutation agreements, cohabitation agreements need not be in writing to be enforceable.  In fact, such agreements may be implied from the conduct of the parties. Non-marital cohabitants are permitted to enter into enforceable agreements regarding their earnings and property rights.

California Family Code §1600-1617 is cited as the Uniform Premarital Agreement Act.  Because premarital agreements are negotiated and executed by parties not yet married, they are considered “arm’s length” transactions, the underlying fairness of which is considered in only limited circumstances. Where premarital agreements nullify, limit, or otherwise define obligations relating to spousal support, the party adversely affected by such provision(s) must be represented by counsel for such provision(s) to be enforceable. Additionally and notwithstanding the representation by counsel, if such provision is deemed unconscionable at the time it is sought to be enforced, it will be deemed invalid. “Conscionability” has not been defined by statute nor clearly by case law. Therefore, premarital agreements remain susceptible to challenge even after its terms are negotiated in good faith.

Once spouses marry, they owe fiduciary duties to each other, including the duties to act fairly and in good faith to each other. Accordingly, if, as a result of an interspousal transaction, one spouse gains an unfair advantage over the other, a presumption arises that such advantage was gained as a consequence of coercion or duress. In such event, the party seeking to enforce the provision has the burden of proving that the advantage was not obtained as a consequence of duress or coercion.

Rules regarding the creation and enforceability of premarital agreements and transmutation agreements are prescribed by statute. Cohabitation agreements and other post-marital agreements are subject to contractual interpretation, case law, and public policy application. In all instances, careful draftsmanship is necessary. It is recommended that parties seeking a premarital agreement arrange for the drafting and negotiation of its terms as far in advance of the intended marriage as possible. Factors giving rise to urgency or pressure to marry can affect the subsequent interpretation of the validity of the agreement. Full disclosure of assets, income, and obligations are essential to the validity of these contracts.

All three types of agreements described can substantially impact a party’s rights in the event of a termination of his/her relationship with a spouse or cohabitant. The validity and enforceability of these contracts may be considered many years later under far different circumstances than existed at the time of execution. Both sides should have competent legal counsel.

Call 949-644-4007 or contact us online to discuss your situation with one of our family law lawyers and find out whether a prenuptial agreement, postnuptial agreement, or cohabitation agreement is right for you.

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