Agreements

Question 1

Requirements for a valid premarital agreement

Answer 1

1. Writing: Premarital agreements must be in writing and signed by both parties and consideration is not required.
2. Enforceable: NOT enforceable if they were made involuntarily, are unconscionable, or lack full disclosure

Question 2

Premarital Agreements are deemed involuntary unless the court finds that the party against whom enforcement is sought was:

Answer 2

1. Represented by independent counsel at the time the agreement was signed or advised to seek independent counsel and waived it in a separate writing.
2. Presented with the agreement and advised to seek independent counsel seven days before signing it.
3. Fully informed in writing of the terms and rights of the party is giving up, in a language in which he is proficient and declared in writing that they received such information and from whom they received it.
4. Not under duress, fraud, undue influence and did not lack capacity; and
5. Any other factors the court deems relevant

Question 3

Child Support and Spousal Support

Answer 3

1. Child support cannot be waived by a premarital agreement.
2. Spousal support can be waived by a premarital agreement if independent counsel represented the spouse against whom enforcement is sought at the time the agreement was signed and the provision is not unconscionable.

Question 4

Transmutation

Answer 4

An agreement between spouses to change the characteristic of an asset. (For example changing property from CP to SP).

Question 5

Requirements for Transmutations

Answer 5

Before 1/1/1985: Transmutations could be oral, written, or inferred from the conduct of the parties.
After 1/1/1985: Transmutations of real and personal property must be in writing by an express declaration that is made or consented to by the spouse adversely affected.

Question 6

Gifts between Spouses

Answer 6

Transmutations do not apply to gifts between spouses that are for tangible articles of a personal nature and that are not substantial in value taking into account the martial circumstances.

Question 7

Transmutations with 3rd Parties

Answer 7

A transmutation is not effective as to third parties.

Question 8

Effect of Statements in a Will

Answer 8

These are not admissible as evidence of a transmutation of the property before the death of the person who made the will.

Question 9

Widows election

Answer 9

Spouse has an election at death- take under the will and receive residual estate or take against the will by claiming 1/2 of CP, but the relinquish all testamentary gifts in her favor.

Question 10

Community credit presumption

Answer 10

Funds borrowed during marriage, and goods purchased during marriage, are presumptively community credit.

Question 11

Primary intent of lender rule

Answer 11

Borrowed funds (and credit purchases) are classified according to the primary intent of the lender. Courts looks at where the lender is looking for satisfaction of the debt.

Question 12

What would be the result if the lender was primarily relying on husband or wife’s general standing in the community or personal creditworthiness?

Answer 12

Community Property

Question 13

Presumption of Undue influence

Answer 13

Spouses are subject to fiduciary duties that arise out of their confidential relationship, imposing a duty of the highest good faith and fair dealing with each other. If one spouse gains an advantage from one transaction, a presumption of undue influence arises. That spouse has the burden of proof to show that she did not breach her fiduciary duties.

Question 14

Grossly negligent and reckless investment of community property funds can be

Answer 14

a breach of a spouse’s fiduciary duties

Question 15

Exceptions to Writing Requirement for Premarital Agreements

Answer 15

1. Oral agreement is executed (fully performed)

2. Estoppel based on detrimental reliance.

Question 16

Waiver of spousal support in premarital agreement unconscionable when:

Answer 16

1. party challenging was no represented by independent legal counsel at the time signed, or
2. Provision is unconscionable at the time of enforcement

Question 17

Waiver of anything else in premarital agreement unconscionable when:

Answer 17

Agreement is enforceable if unconscionable when made AND (i) no full and fair disclosure of other party’s property or financial obligations, (ii) right to disclosure not waived in writing; and (iii) party challenging had no adequate knowledge of other party’s property or financial circumstances.

Question 18

Exception to writing requirement for transmutations after 1985

Answer 18

gifts of tangible property of personal nature (e.g., inherited jewelry) which “are not substantial in value taking account the circumstances of the marriage.”

Question 19

Effect of transmutation statements in a will

Answer 19

By statute, in any proceeding commenced before the death of the person who made the will or created a revocable trust, a statement in a will or revocable trust as to the character of the property is not admissible as evidence of transmutation.