Making Premarital Agreements Stick

Premarital agreements are notoriously easy to attack and difficult to defend. With more and more couples considering premarital agreements, it is helpful to understand some of the basic provisions that must be covered to ensure your premarital agreement is valid.

As outlined in the article "Making It Stick" by Willard H. Dasilva in the ABA publication, "Family Advocate" Winter 2011 issue, there are five factors that must be addressed in order for a premarital agreement to have the best chance of being upheld:

1. FULL FINANCIAL DISCLOSURE

The first requirement in any valid premarital agreement is that each party makes a full financial disclosure to the other party. This financial disclosure process may occur in a variety of ways such as the preparation and exchange of detailed financial statements that may be attached to the premarital agreement itself, or it may simply be a statement of each party's respective assets and debts set forth within the premarital agreement. Whatever shape the financial disclosure may take, it is imperative that the premarital agreement acknowledge that such a financial disclosure has taken place in order to be valid.

2. TIME ELEMENT

The "time" factor considered in constructing a valid premarital agreement begins with commencement of negotiations and ends when the parties sign the agreement. According to the article referenced above, "the agreement should be consummated before the caterer is booked for the wedding and before the wedding invitations are sent out to prospective guests." Although this warning merely stresses the point that valid premarital agreements are drafted and signed after each party has had sufficient time to review and consider all provisions of the agreements, the Uniform Premarital Agreement Act (UPAA), as enacted in California on January 1, 2986, sets forth specific time sensitive requirements. Family Code Section 1615(c)(2), states that a premarital agreement will not be found to have been entered into voluntarily if it is found that, "The party against whom enforcement is sought had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent counsel and the time the agreement was signed." Whatever time requirements your jurisdiction may impose, one thing is certain: if the premarital agreement is presented for the first time and signed the night before the wedding, it will likely be vulnerable to attack later on.

3. SEPARATE LEGAL REPRESENTATION

Each party having separate legal representation is one of the primary ways to protect the validity of a premarital agreement. Although it may not be required in every jurisdiction, parties wishing to ensure that their premarital agreement is upheld, would be wise to obtain individual counsel, the reason being that, "the mere claim that a party did not have proper understanding may be the basis for litigation to set aside the agreement." In order to further protect an agreement from future attack, there should be no direct contact between one party and the attorney for the other party. In situations where one party has greater financial resources than the other and wishes to pay for the party in the inferior financial position to have legal representation, the financially superior party should give the other party the money so that he/she may then select his/her own attorney as opposed to the financially superior party selecting and paying for an attorney for the other party directly.

4. PROPER ACKNOWLEDGMENT

Jurisdictions vary on the specifics of this factor, but like any legal document, proper procedures should be followed with respect to any given jurisdiction's requirements. For example, some states require that premarital agreements be signed in the presence of a notary. Parties should consult with an attorney to determine what their respective jurisdiction requires in the execution of a premarital agreement.

5. BASIC FAIRNESS

Finally, premarital agreements, like any other contract, must possess the element of "basic fairness." The agreement may favor one side over the other on any given issue or issues, but it must not be so egregiously one-sided that it awards one party everything and leaves the other party with nothing. The above-cited article reminds readers of the basic principle of law that, "agreements that are subject to enforcement must be fair when made and not unconscionable at the time of enforcement." A good way to protect a premarital agreement that awards many benefits to one party and leaves the other party with very little is to include a "sunset provision" which sets forth a timeline for when the given benefits or provisions will expire. Another helpful provision to add to a premarital agreement that awards one party substantial benefits not otherwise entitled to him/her by law is to specifically include at least one element of fairness directed toward the other party so as to show that the agreement is not completely one sided.

These five factors are merely basic considerations to make when contemplating or drafting a premarital agreement and are by no means sufficient to ensure a valid premarital agreement in any given circumstance. To ensure that your premarital agreement is drafted so as to give it the best chance of withstanding future attack, both parties should consult with independent legal counsel to draft and/or review their premarital agreement.