Many couples choose to make agreements with their spouse – most often about who owns what property. While prenuptial agreements are the most well-known marital agreements, couples can also make agreements during their marriage and when getting divorced.
Prenuptial Agreements – Agreements Made Before Marriage
When you get married, California law affects your property rights. For example, it makes most income earned during marriage the property of both spouses and it changes who gets what after you die if you don’t have a will. Making a prenuptial agreement with your spouse before you get married allows you to decide these marital property issues for yourself, rather than allowing state law to decide for you. Prenuptial agreements are most often used by wealthy couples and couples going into second or subsequent marriages. However prenuptial agreements can be useful for any couple that wants to control their property rights.
In California, the Uniform Premarital Agreement Act (Family Code §§1610-1617) governs what kinds of things you can include in your agreement. For example, your agreement may address property rights (including rights incident to property such as rents and appreciation), earnings during the marriage, and other assets such as business ownership. However, it may not include an agreement that negatively affects a child’s right to receive child support – that is, you may not agree to waive child support. Also, while you can make an agreement about spousal support, it will only be valid if the spouse who declines support is represented by a lawyer at the time you sign the agreement. Finally, a court will not enforce any provision in a prenuptial agreement if it is “unconscionable.” A court will find a provision unconscionable if one of the spouses was not fully aware of the other spouse’s assets or debts. You can learn more about Prenuptial Agreements on Nolo.com.
Because prenuptial agreements must abide by the law to be enforceable, it’s a good idea to have an experienced lawyer write your agreement. But there is no rule requiring that a lawyer do it for you. If you decide to make a an agreement without a lawyer, make sure to get dependable legal information – for example, Prenuptial Agreements
How to Write a Fair & Lasting Contract, by Shae Irving (Nolo).
Marital Agreements – Agreements Made During Marriage
After you are married, you and your spouse may enter into a marital agreement (also known as a postnuptial agreement). Couples can agree to change their marital rights, both during their lifetime and even after their death.
The big difference between prenuptial agreements and marital agreements is the fiduciary or confidential relationship the spouses have to one another, created by the marriage. (You can read about this in Family Code §§ 721(b) and 1100(c)). During marriage, each spouse becomes a fiduciary to the other. As such, imposed on each spouse is the duty of highest good faith and fair dealing with the other spouse, and neither spouse can take any unfair advantage of the other. So when spouses make an agreement during marriage, both spouses must provide the other with full disclosure of any and all information pertaining to issues contained in the agreement. By contrast, there is no fiduciary relationship presumed between prospective spouses, and accordingly, there is no presumption of undue influence created by a fiduciary relationship if a prenuptial agreement is later challenged.
If the spouses make an agreement that includes rights after death (usually waiver of rights set forth in the California Probate Code), they must make sure the agreement complies with the applicable sections of the Code. Further, if spouses are making agreements affecting their respective rights to pension benefits, they must comply with the United States Code (federal law). These can be complicated issues and it is generally best to have an attorney familiar with the law draft the agreement.
One example of a marital agreement is a transmutation agreement, in which spouses agree to change the character of a property from community to separate or separate to community. For instance, if the husband owned a house before marriage, (his separate property) and after the marriage he wants to make the house a community asset (so that he and his wife own the house jointly), an agreement to make the change from separate to community is called a transmutation agreement. The law regarding transmutation agreements is very specific, and unless specific the conditions are met, the agreement can be set aside at a later time.
Another type of marital agreement is an immediate separation agreement, in which a separating couple enters into a written agreement providing for an immediate separation and support pending a divorce.
Marital Settlement Agreements – Agreements Made When a Marriage Ends
The third type of marital agreement is a marital settlement agreement, commonly referred to a "MSA". This is an agreement entered into by couples upon divorce. As part of the divorce judgment, the MSA contains provisions resolving the divorcing couple’s property issues, parenting schedules, support amounts, and any other topic affecting the couples’ rights after the marriage. As with the other agreements discussed in this article, it is generally best to have a knowledgeable attorney or attorneys prepare the agreement. California has quite cumbersome and specific requirements for an MSA, and not doing it right could cause problems down the road.