With the recent nuptials of Mark Zuckerberg and Priscilla Chan, there has been speculation as to whether the billionaire Facebook CEO had Ms. Chan sign a premarital agreement. We may never know the answer to that question — at least not if the marriage is a successful one — but we do know that premarital agreements are recognized under California law. But that doesn’t mean you can agree to anything in a premarital agreement; there are some things that you just can’t sign away.
A premarital or preregistration (for registered domestic partners) agreement is an agreement between prospective spouses that is made in contemplation of marriage and is intended to be effective on marriage. Fam C §1610(a). Parties may contract in a premarital agreement with respect to “any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.” Fam C §1612(a)(7). These agreements are most frequently used to alter property rights that would otherwise accrue under California community property laws once the parties marry.
A premarital agreement can cover the following (Fam C §1612(a)):
- The rights and obligations of each of the parties in any of the property of either or both of them, whenever and wherever acquired or located;
- The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in mortgage, encumber, dispose of, or otherwise manage and control property;
- The disposition of property on separation, dissolution, death, or the occurrence or nonoccurrence of any other event;
- The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The choice of law governing the construction of the agreement; and
- Any other matter, including the spouses’ or registered domestic partners’ personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
Permissible subjects of premarital agreements may also be found outside the Family Code. For example, a waiver of the Prob C §141 inheritance rights of a surviving spouse or registered domestic partner is permissible in a premarital or preregistration agreement. Prob C §140.
But just because a premarital agreement is an enforceable contract doesn’t mean the parties can contract about anything they choose. In fact, the law precludes the parties from including certain provisions in three specific categories: children, religion, and personal behavior. Here are examples of provisions that are impermissible in California:
- Provisions that purport to require certain religious practices or instruction, particularly with respect to children. Marriage of Weiss (1996) 42 CA4th 106, 117, 49 CR2d 339.
- Provisions that adversely affect the right to child support. Fam C §1612(b). Also, provisions about child custody and child-rearing aren’t binding on the court.
- Provisions regulating or punishing personal behavior, or requiring or rewarding personal services between the parties. Diosdado v Diosdado (2002) 97 CA4th 470, 474, 118 CR2d 494 (provision for liquidated damages for sexual infidelity during relationship held unenforceable as contrary to public policy underlying California’s no-fault divorce laws); Marriage of Mehren & Dargan (2004) 118 CA4th 1167, 13 CR3d 522 (provision imposing financial penalty if party’s drug addiction recurs).
Premarital agreements can be effective tools to preclude the creation of community property interests, but heed the limits on any efforts to use them to regulate personal conduct. The law hasn’t gone there, at least not yet.
CEB provides excellent help with drafting premarital agreements, including many sample provisions, in its California Marital Settlement and Other Family Law Agreements, chap 17. The issue of premarital agreements is as important to estate planners as it is to family law practitioners, as explained in CEB’s Crossover Issues in Estate Planning and Family Law, chap 2 and in CEB’s program Marital Agreements, the Third Rail of Estate Planning, available On Demand.
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