What Makes a Prenuptial Agreement Legally Binding?

Flicker, Kerin, Kruger & Bissada LLP

Prenuptial agreements, also called premarital agreements or “prenups,” are increasingly common in many demographics. Individuals from millennials to people getting remarried later in life are using these contracts to set the terms that will dictate their marital finances in advance. However, as with any other contract, premarital agreements must be carefully written to ensure they meet the standards of validity and enforceability set by the state courts. 

In California, prenuptial agreements are presumptively valid but held to high standards as set forth in the Family Code and case law. In this guide, we clarify these standards, what it takes to meet and exceed these standards, and what couples can do to ensure their agreement will be considered enforceable in the future. 

Purpose of a Prenuptial Agreement

The California Family Code includes many code sections setting forth how a married couple’s finances will be governed during marriage and in the event of a divorce. In the absence of a prenuptial agreement, these default laws apply. Not all couples want these rules to apply to their marriage. With this in mind, the Family Code permits the use of prenuptial agreements to alter the specific details of how a couple’s assets will be combined and divided, among other issues. 

One of the most common uses of a prenup is to create exceptions to California’s community property laws. These laws state that all assets a couple acquires during their marriage are considered community property, over which both parties have equal ownership, with very specific exceptions. Each party has the right to half of the community property in the event of a divorce. Couples can use a prenup to name certain assets or asset classes as separate property, so they won’t be subject to division. They may declare that they will divide property according to a different ratio or methodology. In addition, a prenup can be used to settle issues such as spousal support. These contracts may even make your marriage stronger.

What Is Required for a Prenuptial Agreement to Be Legally Binding?

A prenup must be valid and enforceable, or it will not be helpful in court. To meet these standards, the agreement must fulfill the following requirements, as set forth in Family Code Section 1615:

  • Both parties must execute the prenup voluntarily. Each party must be represented by independent counsel or waive the right to counsel in a separate writing. To prevent accusations of duress or coercion, give your partner sufficient time to review the agreement with independent legal counsel before signing it
  • The prenup cannot be unconscionable when it is executed. Of note, limitations on spousal support or evaluated for conscionability at the time of a divorce. Prenups allow spouses to waive their rights to community property, but they must still be conscionable or fair. Unconscionable agreements that leave one spouse without the means to support themselves can be found to be unenforceable.
  • The parties must provide a fair, reasonable, and full disclosure of their property and financial obligations, and waive the right to further disclosure beyond what the other party provides. . Prenups require both parties to fully disclose their finances, including all assets and debts. Disclosures ensure neither party hides details of their finances that the other person would want to address in the agreement. Failing to provide honest and comprehensive disclosures may render the agreement unenforceable.
  • Seven Day Waiting Rule: There must be not less than seven days between presentation of the final agreement and when it is signed, even if both parties are represented by counsel.

How Long Does It Take to Draft a Premarital Agreement?

Creating a valid and enforceable prenuptial agreement can take time. Meeting the requirements listed above while ensuring the agreement accomplishes your goals can be time-consuming and complicated. If you want to ensure your agreement is written correctly, it is in your best interest to begin the process well before your wedding. 

Depending on the complexity of your finances, the number of deviations from the default law the prenup will include, and how well you and your fiancé’s preferences align, the process generally takes at least several months to complete. Ideal timing is not less than three months before a wedding date, and preferably six to nine months out. To ensure that your agreement is complete and signed before your wedding, it is in your best interest to start the process shortly after you get engaged. This reduces the risk of feeling rushed and pushing for compromises in quality or content. 

What to Do If You Do Not Have Time to Develop a Prenuptial Agreement?

A premarital contract is not the only option for couples who wish to alter their finances during the marriage. If there is not enough time to write a satisfactory contract, you may also consider a postnuptial agreement

Postnuptial agreements are not necessarily a substitute for prenuptial agreements because the presumptions of validity are opposite of a prenuptial agreement, and married spouses are subject to fiduciary duties. Additionally, the law does not support limitations on spousal support in postnuptial agreements the same way parties can do so in prenuptial agreement. Finally, post-nuptial agreements are subject to a presumption of undue influence if one spouse is materially advantaged over the other.

Create a Legally Binding Prenuptial Agreement With Flicker, Kerin, Kruger & Bissada LLP

Prenuptial agreements are an excellent tool for couples who want to set their own terms for their marriage. If you are interested in developing a legally binding agreement with your partner, the expert attorneys at Flicker, Kerin, Kruger & Bissada LLP are available to assist you. Our dedicated lawyers have decades of experience working with clients to draft prenuptial agreements that satisfy both parties and stand up to legal scrutiny. Reach out online to start the process of developing your prenup today.

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