Compliance with statutory rules ensures premarital agreement enforceability

Premarital agreements may be negotiated either directly by the parties or through counsel, but the negotiations are rarely contentious. The explanation is simple: Both parties are motivated to conclude an agreement and focus on their upcoming wedding.

The sense of urgency to get an agreement signed is compounded because the vast majority of couples postpone the negotiation and documentation of their premarital agreement until a month or two before their scheduled wedding. Getting it done before invitations are sent out -- which lawyers consider the best practice -- is relatively rare.

Given that one out of two marriages ends in divorce (and the absence of any evidence that premarital agreements make divorce less likely), the parties who enter into premarital agreements are essentially making a bet. If the parties never divorce, the premarital agreement may be irrelevant as a practical matter.

If the parties do divorce, the party who was disadvantaged by the premarital agreement (typically Wife) invariably wants to know if the agreement is enforceable. Assuming the lawyers representing the parties have complied with the statutory scheme that governs the preparation of premarital agreements, the answer is virtually certain to be yes. For that reason, lawyers who prepare these agreements are well advised to observe the statutory requirements strictly.

Section 1615 of the California Family Code mandates dull disclosure of each party's assets and debts. An agreement that was unconscionable when it was executed is unenforceable if the party challenging it proves that she was not provided a fair, reasonable and full disclosure of the other party's property and financial obligations, she did not waive any disclosure beyond the disclosure provided, and she did not have or reasonably could not have had adequate knowledge of the other party's property and financial obligations.

Lawyers should err on the side of over-inclusion, and estimates of values should be on the high side, not the low side. A mutual waiver of disclosure beyond the disclosures provided should be incorporated into the agreement, or preferably a separate document signed immediately prior to the agreement.

The agreement is unenforceable if the party against whom enforcement is sought was not represented by independent legal counsel at the time of signing the agreement. See Section 1615(c)(1). The alternative procedure contemplated by the statute is cumbersome and rarely used. See Section 1615(c)(3). As a practical matter, both parties must be represented by independent legal counsel, and the representation must be effective.

A lawyer has a professional obligation to explain the meaning and legal effect of the agreement to the party the lawyer represents. A common recitation in the attorney certification typically appended to premarital agreements is that the attorney has explained the material provisions of the agreement. For good measure, conscientious attorneys often provide a one-sentence-per- paragraph summary of the agreement, which creates evidence that the attorney in fact explained the agreement. What a party is giving up and getting in exchange should of course be the subject of a letter that the party countersigns to acknowledge receipt. Finally, some attorneys prepare a list of understandings for the client to sign confirming that he or she has been told the meaning and legal effect of the agreement.

Taken together, these supplemental documents serve multiple purposes: To the extent possible, they ensure that the party is fully informed. They also guard against the possibility that that party will someday have buyer's remorse and blame the attorney; they constitute evidence that the attorney's representation was not merely pro forma. One of the elements of a cause of action for legal malpractice is "the [failure] of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise." Coscia v. McKenna & Cuneo, 25 Cal. 4th 1194, 1199 (2001). Merely signing off on a premarital agreement does not meet that standard.

In addition, the party against whom enforcement is sought must have had at least seven calendar days between the time she was first presented with the final agreement and the time the agreement was signed, regardless of whether that party was represented by legal counsel. See Section 1615(c)(2)(B). Conscientious lawyers should document the date the parties received the agreement in final form.

A naked recitation that a party was represented in the negotiation and preparation of a premarital agreement is insufficient, as is a recitation that seven calendar days elapsed between the time the agreement was in final form and the time it was signed.

Many agreements recite that both parties were represented by independent legal counsel and incorporate a reference to Section 622 of the California Evidence Code that provides as follows: "The facts recited in a written instrument are conclusively presumed to be true as between the parties thereto, or their successors in interest." If an attorney's representation was pro forma, it is doubtful that Section 622 would preclude inquiry into whether that representation was effective.

In Marriage of Clarke & Akel, 19 Cal. App. 5th 914 (2018), the court of appeal reasoned that former Section 1615(c)(2) was "obviously designed to protect parties who enter into a premarital agreement without legal representation, and this policy would be thwarted if the rule could be satisfied by the inclusion of boilerplate language that did not reflect the true facts."

Along the same lines, if the agreement was signed fewer than seven calendar days after it was in final form, Section 622 would not force the court to accept a fact that was demonstrably untrue.

This principle was recently reaffirmed in Knapp v. Ginsberg, 67 Cal. App. 5th 504 (2021), in which the premarital agreement at issue recited that "each party has been represented by and relied exclusively on independent counsel of his or her own choosing and paid for with his or her own funds in the negotiation of this Agreement; this Agreement has been explained fully to each of the parties as to its meaning and legal consequences by such party's independent legal counsel; and each of the parties understands the terms of this Agreement and its legal consequences." Based on the plaintiff's contention that none of those recitations was true, the court of appeal concluded that plaintiff had raised triable issues of fact.

Ensuring strict compliance with statutory requirements is part and parcel of the skill, prudence and diligence that the courts expect from the attorneys who represent the parties to premarital agreements.