Defining a Post-Nuptial Agreement
A post nuptial agreement is a contract between two spouses after marriage in which they agree to all of the terms of their marriage including financial, support, and property matters in the event of divorce or death. Although related in nature to prenuptial agreements and post nuptial agreements may contain some of the same types of provisions (such as the waiver of spousal support or division of community property interests), a post nuptial agreement is entered into after marriage and is intended to address various issues in the relationship during the marriage , such as support & property issues or maritial cohabitation issues.
Like prenuptial agreements, post nuptial agreements are subject to the provisions of the Uniform Premarital Agreement Act of California (California Family Code Section 170 et seq.). The legal enforceability of a post nuptial agreement like a prenuptial agreement can depend upon various factors such as whether it was entered into voluntarily or as a result of fraud, full financial disclosure, legal counsel of both parties, whether the support provisions are unconscionable upon divorce, etc.
Legal Requisites in California
As with most legal instruments, post-nuptial agreements in California have specific legal requirements that must be met for the contract to be enforceable. First, both spouses must give their consent for the contract to be valid. Simply put, both spouses must participate in the formation of the contract. California Family Code Section 1615 provides for the circumstances in which contractual consent is deemed to be involuntary, e.g. if either party was a minor at the time of contract, was deprived of legal rights/knowledge, or did not have sufficient opportunity to consult with an attorney.
Another requirement is that the agreement must be in writing. Oral post-nuptial agreements are not recognized as valid. Additionally, it is not sufficient for the agreement to be written and signed by the parties. The agreement must be signed by both spouses, and it must be notarized by a notary public. The notary is not allowed to act as a witness for either party to the agreement.
In addition to the general requirements of consent, signature and notarization, California courts will also review the terms of a post-nuptial agreement for "substantial fairness". Family Code 1620 states that: "(a) A premarital agreement shall not be enforceable to the extent that the court finds that: (1) The agreement was not executed voluntarily; (2) The agreement was unconscionable when the execution occurred; (3) The facts that support the conclusion that the agreement was unconscionable were not disclosed to the other party when the agreement was executed and that the other party did not have, or reasonably should have had, adequate knowledge of the appropriate facts. (4) In the case of an agreement both executed and signed under Chapter 2 (commencing with Section 1615), Chapter 3 (commencing with Section 2100) or Chapter 5 (commencing with Section 2320) of Part 4 of this division, the party did not have independent legal representation as described in those chapters. (b) A premarital agreement is not enforceable against a party if, before execution of the agreement, that party, or a dependent of that party, was unilaterally deprived of legal representation, except as provided in Chapter 5 (commencing with Section 2320)."
These terms basically mean that the court will not uphold a post-nuptial agreement if the agreement was not entered into voluntarily; if the terms of the agreement were substantially unconscionable at the time the contract was signed; or if one spouse had no or inadequate knowledge of the material facts. Inherent in the court’s evaluation of whether the spouse had sufficient knowledge of the facts is the issue of legal representation. For the agreement to be valid, it must be demonstrated that each spouse had the opportunity to consult with an independent attorney regarding the agreement. If there is any question that the agreement may somehow unfairly prejudice one spouse, the court will likely find the agreement unconscionable.
Advantages of Post-Nuptial Agreements
The benefits of a post-nuptial agreement are many; not only can the agreement provide security in the event of a divorce a post-nuptial agreement can act as a contract to cement the financial aspects of a marriage. Unlike a pre-nuptial agreement which is often entered into by couples before they marry, a post-nuptial agreement is entered into after the marriage. Couples may choose to enter into a post-nuptial agreement if: It is important to note that California law mandates that both husband and wife have independent legal representation for a valid post-nuptial agreement. In fact, a lawyer with no stake in the outcome of the agreement must draw up both parties’ post-nuptial agreements.
Possible Downsides to Consider
While any agreement can present certain disadvantages, post-nuptial agreements are no exception. For example, a post-nuptial agreement may be unenforceable if the judge finds that there was not a fair disclosure. A valid post-nuptial agreement requires full disclosure of income and assets before it is signed. In addition, post-nuptial agreements are potentially a source of conflict that can place strain on the marital relationship. In fact, the fact that you are asking for a post-nuptial agreement may show a lack of trust or confidence in the marriage. After all, many experts agree that a post-nuptial agreement can be a warning sign of potential divorce.
How to Create a Post-Nuptial Agreement
First and foremost, the parties must each consult with their own independent legal counsel to understand the potential implications of entering into a post-nuptial agreement. An ideal situation is where each party has independent counsel, both of whom discuss the material provisions with the other attorney, so that they are jointly satisfied that neither party is "giving up" anything to which they are otherwise entitled, and that each party has been counseled on the benefits and risks of entering into a post-nuptial agreement. The parties may agree to a waiver of full disclosure by one party as to the other’s income or assets when the parties previously executed a pre-marital agreement. In such cases, the terms of the pre-marital agreement should be disclosed to the other party and the waiver of disclosure should be in writing and specifically set forth.
The terms of a post-nuptial agreement may include any disposition of property that both parties desire to include. The parties can agree to defer child support and even spousal support when it is tragically impossible to predict with absolute certainty whether the marriage will end. In such case, the parties could agree that should govern any or all aspects of their family law case. The parties can also provide for disposition of marital debts (debts incurred during the marriage) and even debts incurred prior to marriage. A post-nuptial can even provide for an agreement that if either party desires a divorce, the other party will uphold certain financial obligations even after the dissolution .
As in any judicially required contract, a post-nuptial agreement should specifically address the means by which the contract could be amended so that there would not be a dispute in the future. The general practice is by mutual consent in writing with disclosure of all material assets. In contrast, most contracts require an oral or written communication of the contract terms, with or without acceptance of the terms themselves. In this instance, both parties agree that they do not want to follow that procedure.
It is important to remember that should the post-nuptial agreement not pass the scrutiny of the preliminary determination regarding its validity and enforceability. The court must clearly find that the parties each voluntarily entered into the agreement and that it is not unconscionable, that is, off-the-charts unfair to the point that it shocks the conscience. I have seen clients who believe they need extra protection in the post-nuptial because the parties are having children. That is simply not necessary, as the court’s standard of review is to determine whether waivers for child support and spousal support are fair, given the facts and circumstances, and the general premise that courts seek to avoid financially punishing the "primary parent" with limited ability to bring in personal income in exchange for her role in caring for the children by his economic choices.
Common Terms and Provisions
Post-nuptial agreements in California, like those executed in other jurisdictions, often contain several common clauses and provisions. For instance, a property division clause is one of the most common inclusions in a post-nuptial agreement. In general, California law is that property acquired by either spouse after the date of marriage is community property. In such an event, this property will be divided in the event of a divorce. However, with a post-nuptial agreement, the spouses can decide that property will be acquired as separate property or decide which party will own their property upon divorce. For example, one of the spouses may have a previous business that they want to retain so they can use it to start a new one after divorce. While a spouse cannot waive his or her alimony rights prior to marriage, if a spouse has the option to waive alimony after the marriage by entering into the post-nuptial agreement, he or she can do so.
Debt responsibility and responsibility for reimbursement is another common inclusion addressed in a post-nuptial agreement. In California, marital debt is the debt acquired during the marriage. This debt could be medical bills, education expenses, business debts, credit card bills and bills for home improvements among others.
Alimony or spousal support is another common inclusion in post-nuptial agreements. The burden of proof is high when it comes to spousal support, so it is a good idea to enter into a post-nuptial agreement that outlines what the requirements of spousal support will be if the marriage ends. However, both parties must have the same amount of wealth and assets. If the wealth and/or assets of spouses are vastly different and they both enter into the post-nuptial agreement, the courts may view it as enough of a reason to nullify the agreement. Even if both parties do have the same amount of wealth and assets, both must consent to the agreement. Therefore, the best thing to do is to meet with an experienced rocky mountain lawyer in Georgia to discuss the requirements of presenting a fair post-nuptial agreement.
Enforcement of Post-Nuptial Agreements in Court
Enforcement of Post-Nuptial Agreements in Court
When a dispute arises regarding the terms of a post-nuptial agreement, California courts will examine both procedural and substantive requirements to determine whether to enforce the agreement. Procedural requirements focus on the formation of the agreement itself, while substantive requirements refer to the terms and agreements in the contract.
Procedural requirements focus on whether:
In particular, California family law judges will review the procedural requirements set forth at Family Code section 1615 to ascertain whether the agreement is enforceable. In general, the court must find that the agreement was entered into voluntarily by both spouses, with full and fair disclosure by both parties of all assets and liabilities, and without duress, fraud, or undue influence.
In examining substantive elements, judges will review the terms and stipulations in the agreement to determine whether the agreement is substantively conscionable. In order for the court to deem the agreement as conscionable , there must be fair and reasonable provisions for spousal support in the event of marital dissolution, as well as a fair and reasonable division of property that takes into account the circumstances of each party. While post-nuptial agreements are generally acceptable under California law if voluntary and conscionable, if the agreement fails to provide for spousal support, the court may make additional provisions for spousal support by applicable law.
If, after reviewing the requirements for procedural and substantive elements in making its determination of whether to enforce the terms of a post-nuptial agreement, the court finds that all requirements have been met, and thus, orders enforcement of the post-nuptial agreement. Conversely, if the court fails to find that the procedural and substantive requirements have all been met, the court may decide not to enforce the terms of the post-nuptial agreement or it can limit enforcement to the provisions that meet the procedural and substantive requirements.