Agreements Flashcards
What is the first thing to look at when facing an agreements question?
Look to whether the agreement was made prior or during the marriage.
What are premarital agreements generally?
Premarital agreements allow a couple to marry while avoiding CA’s community property system. Premarital agreements are also known as prenuptial and antenuptial agreements.
Which agreements are controlled by the Uniform Premarital Agreements Act? (UPAA)
any CA prenup made on or after January 1, 1986.
What are the general considerations for prenups under the UPAA?
A premarital agreement must be:
- In writing
- Signed by both parties, and
- is enforceable without consideration.
NOTE: in CA prenups fall within the statute of frauds (i.e. both parties must sign the writing)
CA prenups fall within the statute of frauds; when can an oral prenup be enforceable despite that?
An oral prenup may be enforceable when:
- the promise was fully executed by the promisor, and
- the promisee has relied to her detriment on the oral agreement.
What are the permissible subjects of an oral agreement?
Parties to a prenup may K with respect to all of the following:
- Property (including rights)
- Choice of law governing the construction of the agreement (including what SP and CP mean)
- The making of a will, trust or other arrangement to carry out the agreement.
- The ownership rights in and disposition of the death benefit from a life insurance policy, or
- Any matter, including their personal rights and obligations that are not in violation of public policy or criminal statute.
What are impermissible subjects of prenups?
The only subject matter that is specifically prohibited by CA law is child support. However, prenups should not promote divorce (though modern courts don’t really care about this as much).
What are the defenses to enforcing a prenup?
There are two methods to invalidate a prenup: FINISH
Whwat are the defenses to the enforceability of prenups?
`1. Not executed voluntarily
2. Unconscionable terms
When is a prenup unenforceable because it was not executed voluntarily?
Apparently just when it was not voluntary in general if the prenup was executed between 1986 and 2001. During or after 2002, the amendments to the Uniform Premarital Agreement act specify that an agreement was NOT entered into voluntarily unless all of the following are present:
- Party against enforcement was sought had independent legal counsel or, after having been advised to get counsel they expressly waived, in a separate document, that counsel,
- Party against whom enforcement is sought had not less than seven calendar days between being presented with the terms and advised to seek counsel and the time the agreement was signed.
- The party against whom enforcement is sought, if unrepresented, was fully informed of the terms and basic effect of signing, including the rights being given up, in a language they can understand. The agreement must also be in a language they understand,
- The agreement and other required writings were not executed under duress, fraud or undue influence and the parties did not lack capacity to enter the agreement, and
- any other factors the courts deem relevant.
When is a prenup unenforceable because it is unconscionable?
An agreement is unconscionable when it was executed, and before it was executed, all of the following were true:
- The party was not provided a fair, reasonable and full disclosure of the property or financial obligations of the other party,
- Above knowledge was not voluntarily waived in writing, and
- The party did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other
What is the key time constraint regarding the unconscionability of prenups?
The agreement must have been unconscionable when executed, so even if circumstances change after marriage, the prenup is still valid if it was conscionable when executed.
What are the amendments to the Uniiform premarital agreement act generally?
Premarital agreements made on or after 2002 are controlled by the 2002 amendments to the CA version of the Uniform Premarital Agreement Act. Like the 1986 Act, the amends are not retroactive. The 2002 amends mainly address spousal support and voluntariness.
What were the 2002 amends to the UPAA re spousal support?
Any provision in a prenup regarding spousal support will NOT be enforceable if:
- The party against whom enforcement is sought was not represented by independent counsel at the time prenup was signed, or
- The provisions regarding spousal support is unconscionable at the time of enforcement, even if the party against whom the enforcement is sought was represented by independent counsel.
NOTE: an otherwise unenforceable provision in a prenup re spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel.
What is a transmutation?
A transmutation refers to the changing nature of property. Generally, in such transactions, spouses owe a fiduciary duty of confidentiality to one another. Further, if one spouse has any type of advantage over the other spouse, then there is a presumption of duress or undue influence. Spouses may not use transmutation for fraudulent conveyances.
