The Importance of Using a Specialized Attorney to Prepare Relationship Agreements

Flicker, Kerin, Kruger & Bissada LLP

Having a relationship agreement in place provides valuable financial protection for both parties. Contracts like premarital (also called pre-nuptial) agreements, post-nuptial agreements, and cohabitation agreements permit couples to set their own terms for property ownership and support during and after their relationship. However, these contracts must be written carefully, or they may expose one or both parties to unexpected financial liabilities.

Some people use friends, the internet, or non-family law attorneys to prepare their agreements. The problem is that these resources do not offer the same in-depth expertise or personalized support a family law specialist provides. Statutes and case law have made the complete disclosures of assets and debts in advance of any agreement critically important. Having a specialized attorney, who is familiar with these statues, prepare these documents is essential in avoiding mistakes that could significantly reduce or increase one party’s financial entitlement at the end of the relationship. 

Why Work With an Attorney to Draft Your Pre- or Post-Nuptial Agreement?

An attorney with a firm grasp of California’s Family Code is essential for drafting comprehensive, enforceable premarital and post-nuptial agreements. The attorney’s specialized knowledge ensures that they do not make legal errors that could substantially alter the enforceability of these contracts. Three crucial issues for which the counsel of an experienced family law attorney matters most include:

Waiving Spousal Support

Spousal support is a common topic for premarital agreements, and the laws have changed significantly over the years, which can have a substantial impact if an agreement was written years ago. Premarital agreements that include waivers of spousal support may be difficult to enforce if the language used is not clear or fair enough to address public policy standards. It is increasingly important to use an attorney that is adept in these issues to ensure that sufficient disclosures are prepared and appropriate language is used so the agreement is enforceable. 

Waiving Potential Reimbursement Rights

Another question that must be answered in a marital contract is whether the couple intends to waive their Family Code Section 2640 claims. These claims permit reimbursements for contributions made from either community or separate property to acquire or improve another type of property. The difference can be a major departure in the division of assets. 

Examples of reimbursement claims are:

  • Right to seek reimbursement for separate property contributions to community property or debts (i.e., equity in a separate property home before placing spouse on title)
  • Right to seek reimbursement for community contributions to a separate property asset (homes, businesses, etc.) 

Some agreements do not waive reimbursements, but the parties believe they are waived until a divorce occurs, at which point it is too late to revise the contract. A contract can be customized to waive Section 2640, but only if the person drafting the agreement knows the necessary waiver language. Whether you want to preserve or waive your claims, the correct language must be used, or the clause may not be enforceable. 

Waiving Breach of Fiduciary Duty Claims

A couple cannot waive breach of fiduciary duty claims in a marital contract. However, an experienced family law attorney will explain to their client the importance of full financial disclosures and ways to reduce a future breach of duty claim. They will ensure the agreement meets fiduciary requirements and avoids a breach claim that might invalidate the contract. 

Below are common breaches of fiduciary duty that a party should consider when approaching a marital agreement or considering marriage:

  • Hiding marital property from the other spouse. 
  • Failing to list the accurate value of a business or other assets. 
  • Mismanaging or wasting marital assets
  • Using marital money to pay off separate debts instead of using separate assets for this purpose
  • Transmuting the character of property from community to separate in an attempt to reduce the amount the other spouse receives
  • Refusing to allow the other spouse access to financial records
  • Giving away or selling marital assets without the other spouse’s permission

Why Attorneys Matter When Drafting Cohabitation Agreements

Married couples are not the only parties who benefit from drafting a contract regarding their financial rights. In California, unmarried couples may develop cohabitation agreements to achieve many of the same goals as pre or post-marital contracts. 

A civil claim made by one romantic partner against the other is known as a Marvin Action or Marvin Claim. These are legal actions filed by one party against another to enforce expressed or implied agreements made during their relationship. Former romantic partners can use these actions to pursue financial support or property division after ending their relationship.

A cohabitation agreement drafted by an experienced family law attorney can significantly simplify Marvin Actions. With skilled legal counsel, couples may choose to waive the right to Marvin Claims entirely. They can use their contract to address the case law and customize how the agreement will treat the division of property and support, thereby significantly reducing or avoiding litigation at the end of the relationship. 

Flicker, Kerin, Kruger & Bissada LLP Offers Specialized Family Law Support

Any couple preparing to marry or cohabitate may benefit from implementing a premarital or cohabitation agreement. If a couple is already married, they can use a skilled attorney to prepare a post-marital agreement. Schedule a consultation with the experienced attorneys at Flicker, Kerin, Kruger & Bissada LLP to discuss how we can provide specialized assistance with relationship agreements in California.

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