Altering Character of Assets by Agreement

Question 1

Opt Out

Answer 1

CA allows parties to opt out of SP and CP by agreement either as to particular assets or all acquisitions

Question 2

Premarital Agreement

Answer 2

Can agree to just about anything except for contribution to furnish child support

Must be in WRITING, VOLUNTARILY SIGNED, and NOT UNCONSCIONABLE

Oral agreements invalid

Question 3

Exceptions to writing requirement for premarital agreements

Answer 3

(1) oral agreement is executed (fully performed); or (2) estoppel based detrimental reliance

NOTE: marriage alone is NOT sufficient performance to make it an exception to the writing requirement (rationale – would eliminate a writing requirement completely). Still can be admissible evidence of the existence of a premarital agreement though

Question 4

Defenses to enforcing premarital agreements (Involuntary signing and Unconscionability)

Answer 4

(1) Signed involuntarily. Premarital agreements are deemed involuntary UNLESS a court finds that the party (1) was represented by independent legal counsel at the time the agreement was signed; (2) was given 7 days to sign; and (3) if not represented, was fully informed in writing of terms and basic effect of agreement. Must receive a document declaring that they got this information and identify who provided it.
(2) Unconscionability. Two types:
(a) spousal support: provisions limiting spousal support is unenforceable if party was not represented by legal counsel or if the provisions are unconscionable
(b) anything else: agreement is unenforceable if the terms are conscionable when made and there was no full and fair disclosure of the other party’s financial obligations or wealth

Question 5

Transmutation

Answer 5

Agreements to change property characterization DURING THE MARRIAGE

Since 1985, Must be (1) in writing; (2) signed by the spouse whose interest is adversely affected; and (3) must explicitly state that a change in ownership is being made

Question 6

Exception to writing requirement for transmutations

Answer 6

USUAL exceptions do NOT apply (estoppel, partial performance)

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

Question 7

Will as evidence of written transmutation agreement

Answer 7

In any proceeding commenced BEFORE the death of a person, a statement in a will or revocable trust as to the character of the property is NOT evidence of a transmutation