Traditional Premarital Negotiations

Premarital Agreements

A premarital agreement (“PMA”) is an agreement between spouses that is made in contemplation of marriage and intended to be effective upon marriage. Such agreements are also sometimes referred to as “antenuptial” or “prenuptial” agreements. Traditionally PMA’s are used:

  • To preclude the creation of community property, either entirely or with specific exceptions
  • To maintain the character of separate property
  • To waive or limit spousal support
  • To plan for what will happen in the event of divorce
  • To plan for what will happen in the event of death
  • To change the character of property from community to separate, or from separate to community, or from one person’s separate property to the other’s separate property

To find out more about general community property law. Please see Summary of Premarital Agreement Law (prepared by Catherine Conner, conner@clr829.com, used with permission).

Traditional PMA Negotiations

In traditional negotiations, a draft PMA covering the above items is prepared by the lawyer for one of the parties and that draft is presented to the other party. The other party then retains a lawyer and the parties, through their lawyers, negotiate what the final agreement will be, often working from the initial draft.

This can work well. It is more likely to be successful if, well in advance of the marriage and prior to either party retaining a lawyer, you and your fiancée have educated yourselves about the basics of California community property law, and have shared what is important to you and what your goals and concerns are as you plan a life together.

Unfortunately, what happens all too often is that people don’t talk about these things because they find it uncomfortable to do so; the preparation of the PMA is left to the very last minute; and the outcome often unfairly advantages the person who initiated the process. One commentator has described the kind of PMA’s that result as “the bomb” and “the box”.

“The Bomb”: In this model, one spouse-to-be (usually the one with more assets and more often than not, the husband) delivers a draft PMA to the other 6-8 weeks before the wedding. The PMA prepared  requires her to opt out of the community property system – no sharing of earnings and no acquisition of joint property. When informed of this by her lawyer, wife-to-be either becomes extremely upset, since they have never discussed the terms, or totally accepting (“We love each other and I am not marrying him to get rich”).

In the first instance, the lawyer must inform opposing counsel that this one-sided deal is not acceptable and persuade him or her to begin a process of negotiating an agreement that will work for both parties. Meanwhile, the document has damaged the trust between the couple and cast a cloud over preparations for the wedding. In the second instance, the lawyer must either explain, in writing, that the PMA leaves her worse off than if there were no agreement, and require her to sign that writing before the lawyer will sign off on the PMA, or choose not to continue to represent her. In neither case is the fiancée well-served.

“The Box”: In this model the spouse with fewer assets is sent a draft PMA that contains generous provisions for her, allowing her to “acquire” a share of husband’s separate property over time and to receive a generous bequest upon his death. She is delighted with her “Tiffany box” – it feels like a great gift.

In the case of the “Tiffany box”, the process often leads to a successfully completed PMA. It fails, however, to create a foundation for the relationship – it has failed to give the wife any power to determine what her future will be, or to participate in planning for the couple’s future.

NOTE: The “bomb/box” metaphors and discussion  are derived from the article “The Practical Pre-Nup” by Belinda Hanson and Mu-En Steeg, www.hansonflg.com, used with permission.”