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Prenuptial Agreements

By Rich Gordon

Poor Paul McCartney. He worked many one night stands in dank, dark, deserted pubs before being "discovered" as a Beatle. Thereafter he and his band mates recreated the music industry. He became fabulously wealthy and held in the highest of esteem. All of this prior to his ever meeting Miss Heather Mills. Ah, but then love took over and he proposed marriage to this much younger and financially disadvantaged woman. Never was the topic of a Pre-Nuptial Agreement ever raised. This couple, as well as many others, believed that "all you need is love" to make a marriage work. Unfortunately this is not always the case. Now divorce proceedings have been commenced and Sir Paul's vast wealth is under attack by Ms. Mills and her very expensive lawyers.

Having a prenuptial agreement is really like having a will, no one ever wants to use it but we all understand that it is better to have one to decide before the time comes how property will be distributed to save our family the anguish of trying to figure out what we wanted.

Prenuptial agreements are not new. However, they are getting a lot more attention. Not too many years ago they were held in disrepute as being created solely with an expectation of divorce. No longer do judges feel they are against public policy as they once did.  Now, however, with 50% of first marriages failing and 75% of second marriages ending, prenuptial agreements are prudent financial planning.

Prior to 1848, prenuptial agreements were necessary in the United States because once married, a couple was considered one person, and thus not able to make contracts between themselves. Without a contract all property owned by a woman at the time of her marriage and acquired thereafter was the property of her husband, thus if he died or divorced her she could lose everything. In essence, one married, a wife was subsumed into her husband and became a dependant part of him unable to make contracts on her own.  In even earlier history marriages in England were considered contracts between two families to share property rather than between two people. Think of the consequences of that system today the next time you get annoyed with your mother-in-law for telling you how to run your house! The Married Woman's Property Act of 1848 allowed women to continue in ownership and control of their property after they were married as if they had remained single. The Married Woman's Property Act chipped away at the notion that at marriage two had become one by making the two halves more equal.

In the 1970s and 1980s, in reaction to an epidemic of divorce that was sweeping the nation, the law began to evolve   States like California adopted the concept of a "no-fault divorce" which revolutionized the far more traditional human nature ideal of assigning blame in proportion to each party's role in the destruction of the marriage and awarding assets to the least guilty party. State courts began upholding prenuptial agreements as encouraging marriage by relieving parties of anxiety about the future of their businesses or investments.  Also, from fear of a government imposed structure of marriage, the courts took notice that since living "in sin" was no longer the taboo it used to be, financially secure men and women were choosing to cohabitate without the restrictions and responsibilities of marriage.  Courts began to see that marriage may exist in many forms and that when betrotheds are free to define the parameters of their financial responsibilities unconventional couples are encouraged to marry. Thus the Uniform Premarital Agreement Act was promulgated in 1983, which California adopted as Family Code Section 1600 in 1985.

And then came Barry Bonds. Just as his puffed allegedly steroid free physique strikes fear into trembling pitchers, so does his bulk loom over the annals of the evolution of prenuptial agreements. In 1988, Bonds decided to marry Sun, a native of Sweden and a former cocktail waitress.  The couple wished to marry before the beginning of spring training so they planned a small ceremony to take place in Las Vegas.  On the way to the airport to catch the plane to Vegas, Barry turned to his blushing, Swedish bride and informed her that on the way to the airport they were going to make a quick pit stop at his attorney's office.  Keep in mind that this is 1988 when Barry was still 150 pounds, played for the Pittsburgh Pirates, and only made about $106,000 a year so they had to "fly commercial" like everyone else.  The blissful couple arrives at the lawyer's office and a prenuptial agreement is presented to Barry's fiancée along with a pen and a reminder that if they didn't leave soon they would miss the plane and the wedding.  Sun did not have an attorney of her own; an interpreter for the document, or any additional help in understanding what she was giving up other than the attorney's hurried explanation. Sun unwilling to miss her wedding, signed the document and off they went. 

Six years later Barry petitioned for divorce.  Sun contested the prenuptial agreement saying that its terms are unconscionable since they provided her only $30,000 a month in child and spousal support and Barry was making $8 million a year.  The court upheld the agreement under Family Code Section 1600 which only made a premarital agreement void if it was not in writing, not signed voluntarily, or was unconscionable at the time it was executed.  "Unconscionable" includes omitting assets or debts where the other party had no way to know what was hidden unless they waived the right to disclosure of all assets and debts. The court did not find the prenuptial agreement unconscionable because Barry had disclosed all of his assets and debts in the agreement and found that despite all the pressure on Sun to sign the agreement right away she was not induced nor forced to sign.

This decision really annoyed the California legislature who considered it unethical to hold a spouse to an agreement when she was unrepresented, had no time to think about it or to obtain counsel, or at the very least a translator! So the legislature amended the California Family Code to lay out a number of additional requirements which must be met before a prenuptial agreement will be enforced.

1.    That it is in writing and signed by both parties
2.    Both parties must be represented by attorneys or knowingly waive the right to an attorney in writing
3.    Both spouses must have had seven days between the time they were presented with the agreement and the signing to seek legal advice
4.    The support provisions may not be unconscionable at the time of enforcement (as opposed to when the document was signed)
5.    Both parties must be proficient in the language the agreement is written in and understand all the rights they are giving up

Poor Sun! Under any of these provisions the prenuptial agreement she signed would have been thrown out.  Unfortunately martyrs never get to enjoy the fruits of their sacrifice. 

Today premarital agreements have many advantages the chief of which is the avoidance of emotionally taxing and financially draining litigation, especially since over one million children are affected by divorce every year. A prenuptial agreement offers certainty of how property and debts will be divided if the marriage fails and directly addresses the issues which are the most hotly litigated. Cooler heads prevail at the drafting of a prenuptial agreement than at a divorce hearing so it is in the best interests of both parties to have a prenuptial agreement in effect to ensure the proper and fair treatment of each member of the family.

For more information about prenuptial agreements feel free to contact me or visit the "Ask the Mediator" portion of our web site.  www.afairway.com

Other Articles by Richard Gordon

Divorce is never easy, especially for the children
Home for the Holidays
Mediation 101
Mediation of Gay/Lesbian marriages not found in court
Mediator: "It's not about winning or losing"
Prenuptial Agreements