prenup Archives - Lonich Patton Ehrlich Policastri

Prenup Agreement in High Net Worth Marriage

September 22, 2021/in Family Law /by Gina Policastri

As common as they are, the potential of a divorce is something that engaged couples often don’t wish to discuss. Although, it may sound pessimistic to discuss prenup agreements, high net worth individuals may want to consider a prenuptial agreement so that a potential division of property later down the road is less stressful.

Who Should Consider a Prenup Agreement?

High net worth owners are highly advised to create a prenup agreement as they have more at stake in the event of a divorce. Additionally, business owners are encouraged to consider prenup agreements as well, as the division of a business is often a complex and contentious issue down the road.

Oftentimes couples sign prenup agreements not because they foresee a divorce happening, but because they want to quell family concerns regarding the distribution of assets down the road. Prenup agreements can also protect assets in the event of untimely death and may redirect funds to dependents or other family members.

What Are the Benefits of a Prenup Agreement?

As unromantic as it sounds, couples who at least discuss the option of a prenup often report that they feel eased by being proactive with considering their future. Sometimes the burden of a potential stressful divorce down the road can cause people to become anxious about marriage and can cause unwanted stress. Signing a prenup doesn’t mean that you want or anticipate a divorce, it simply means that you are aware that they are common and want to be proactive with making the distribution of assets less stressful for you, your partner, and your loved ones.

What Is the Process Like of Creating a Prenup Agreement?

As opposed to many divorces, creating a prenup is typically an unemotional process, similar to a business transaction. While it is significantly less stressful than most divorce proceedings, it is just as meticulous of a process. It is highly advised that both you and your partner hire an estate planning attorney so that you can ensure the agreement is fair and will distribute assets as intended. Additionally, it is highly recommended that partners be transparent about their assets and potential inheritances, as this will ensure that property is not overlooked.

How Do I Talk to My Partner About Creating a Prenup?

Although prenups are becoming more common, with an increase in the number of millennials signing prenup agreements, it is not an easy conversation to have. It is important to approach the subject with thoughtful consideration of the timing, place, and wording.

With any legal agreement, it is important, to be honest. Mentioning that it has always been something that was important to you and your family before you met your partner, or that you are following the advice of friends who have experienced a terrible divorce may help your partner have empathy for your request. It is also helpful to address the fact that a prenup agreement is significantly less timely, costly, and stressful than a complex divorce proceeding.

Approaching the agreement as equals is recommended. When both partners are involved with the creation of the prenup, there tends to be less concern and animosity with the legal agreement. Additionally, it is important to remind your partner that a thoughtful prenup benefits both partners as it reduces financial uncertainty for both parties. While it may temporarily create tension, many couples find that once they come to an agreement, they are able to move forward in their relationship.

If you would like to understand if a prenup is in your best interests, contact LPEP, an estate planning and family law firm in the Bay Area. Our team of dedicated professionals are committed to protecting your assets and have the resources you need to assist you with creating your prenup agreement.

Who gets the family pet in a divorce?

October 27, 2014/in Estate Planning, Family Law /by David Patton

If I had to ask you to put a price on your dog, cat or your pet hermit crab, could you? For some, perhaps they could but the vast majority would likely agree that their pets are priceless. However, disputes regarding who gets the family pet in divorce proceedings has become commonplace in family law.

Earlier this year, Melanie Griffith and Antonio Banderas made a statement that they were ending their two-decade marriage but vowed to remain friends and to move forward lovingly. However, shortly after, reports surfaced that a custody battle was flaring up – not over their 17 year old daughter, but over the couple’s three dogs.

Although these days some people treat their pets better than their own children, in the eyes of the law pets are still only considered the property of their owners, much like their furniture is[1]. Legal experts agree that pet owners invest hundreds sometimes thousands of dollars and hours researching proper training, good food choices, and the perfect toys, groomers and veterinarians for their pets. Those same individuals might also take precautions with their estate by writing a prenuptial agreement. But how often do those pet owners think about legal issues associated with pet ownership?

Family law attorneys agree that the best way to handle a situation with a pet is to put it in a prenup. If you came into your relationship with Maxwell, put it in writing that if you are to leave the relationship Maxwell is coming with you. If you and your significant other purchased a pet together during the relationship, but you both agree that one of you should have the pet in the event of a breakup, a post-nuptial agreement would make sure that in the event of a divorce or separation the pet would go with the spouse more bonded with the animal.

Without something in writing, trouble could land you arguing in court. Last year a New York judge granted a divorcing couple the right to engage in oral arguments over pet custody for the first time in the state’s judicial history. The landmark legal showdown was ultimately averted. The couple settled out of court.

In the event of a heated breakup, pets can be protected. If a party feels that he/she and the pet is in danger at the hands of the other party, California law provides for the family pet to be included on a protective order. Since 2008, courts have had the ability to make an order that the restrained person stay away from the pet. Family Code Section 6320 provides that upon a showing of good cause, the court may include in a protective order a grant of the exclusive care, possession, or control of any animal owned, possessed, leased, kept, or held by the spouse or minor child resident in the residence.

Family Code section 6320 makes strides toward addressing the established connection between animal abuse and family violence commonly referred to as the “Link.”[2] One of the first studies that described this Link found that of a survey of women with pets who had entered a shelter in northern Utah, seventy-one percent reported that their partner had threatened or actually hurt or killed one or more of their pets.[3]Another study of fifty of the largest shelters in the United States found that eighty-five percent of battered women and sixty-three percent of children with pets had experienced incidents of pet abuse.[4] An alarming consequence of these studies is that victims may feel that they cannot leave their abuser because they worry for the safety of their pets.

The Certified Family Law Specialists at Lonich Patton Erlich Policastri have decades of experience handling complex family law matters. If you are interested in learning more about prenuptial or post-nuptial agreements, please contact the Certified Family Law Specialists at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

[1] Kimes v. Grosser (2011) 195 Cal.App.4th 1556

[2] Am. Humane Ass’n, Learn About the Link, http://www.americanhumane.org/site/PageServer?pagename=lk_about (last visited Aug. 4, 2007); see also Senate Judiciary Committee, Committee Analysis of SB 353, at 2-5 (Mar. 27, 2007) (explaining the connection between animal abuse and family violence). There are also several studies that report that children who witness abuse, or are abused themselves, tend to, in turn, abuse animals. See Phil Arkow & Tracy Coppola, Expanding Protective Orders to Include Companion Animals 5 (2007), http://www.americanhumane.org/site/DocServer/PetsinPO2007.pdf? docID=5061 (describing the harmful effects upon children of witnessing domestic violence).

[3] Frank R. Ascione, Battered Women’s Reports of Their Partners’ and Their Children’s Cruelty to Animals, 1 J. Emotional Abuse 119, 125 (1998).

[4] Frank R. Ascione et al., The Abuse of Animals and Domestic Violence: A National Survey of Shelters for Women Who are Battered, 5 Soc’y & Animals 205, 211-12 tbl.1 (1997), available at http:// www.syeta.org/sa/sa5.3/Ascione.html.

Forgot a Pre-Nup? Create a Post-Nup

September 9, 2013/in Family Law /by Mitchell Ehrlich

In June, billionaire media mogul Rupert Murdoch surprised his third wife, Wendi, with divorce papers. Mr. Murdoch, the founder, Chairman, and CEO of the world’s second-largest media conglomerate, has been married with the current Mrs. Murdoch for 14 years, has two young daughters with her, and has four other children from previous marriages. In other words – plenty is at stake. However, the Murdoch divorce may not play out as disastrously as one would imagine because the couple signed not only a prenuptial agreement but two postnuptial agreements – one after each of their daughters was born.

Nowadays, postnuptial agreements are becoming increasingly common. Unlike prenuptial agreements, postnuptial agreements are entered into after the marriage rather than before. They cover many of the same issues commonly covered in prenuptial agreements, such as asset protection, debt division, and spousal support.

Oftentimes, however, many people are hesitant to enter into a postnuptial agreement because they believe that they adversely impact one spouse while benefiting the other. In actuality though, postnuptial agreements can protect assets as well as shield spouses from debts. Some scenarios where postnuptial agreements are a good idea include:

One spouse wants to borrow a significant amount of money to start up a business. The other spouse does not want to share in the debt that is created should the business fail. A postnuptial agreement can be drafted to shield one spouse from the debt burden in the event of a divorce.
One spouse receives a large inheritance and wants to invest it in an existing family business, but he or she wants to ensure that if there is a divorce the value of the inheritance will be protected. A postnuptial agreement can be drafted to protect the value of the investment in the business.
A postnuptial agreement can also be drafted so that real estate and community property is divided equitably rather than equally (a 50-50 split), as prescribed by California community property law.

Since the legal relationship between people changes once they are married, it is vital to have an experienced attorney draft any postnuptial agreement. Courts carefully scrutinize postnuptial agreements to ensure that they were entered into voluntarily, without coercion, duress, or undue influence. Likewise, the Murdoch postnuptials (and prenuptial) will be highly scrutinized by both parties for these loopholes.

At Lonich Patton Erlich Policastri, our attorneys are prepared to help clients create targeted, legally binding postnuptial agreements. We always recommend that clients have legal counsel review their agreements to make it more difficult for either spouse to challenge the issues later on. If you have any questions about postnuptial agreements, please contact our California Certified Family Law Specialists (as certified by the State Bar of California Board of Legal Specialization). Our attorneys have decades of experience handling complex Family Law proceedings and are happy to offer you a free consultation.

From Bonds to Zuckerberg: The Importance of a Prenup in the Silicon Valley

May 29, 2012/in Family Law /by Mitchell Ehrlich

Will Mark Zuckerberg join the list of billionaires who tied the knot without prenuptial agreements?

Mark Zuckerberg is making national headlines for his marriage that took place on May 19, 2012, just one day after the initial public offering of Facebook. The mystery remains: do Zuckerberg and Priscilla Chan have a prenup? All are in agreement that Zuckerberg would be better off with a prenup. Chan reportedly asked Zuckerberg to sign a relationship agreement before she moved to California several years ago to be with him, which outlined, for example, how much time they should spend together. It would not be surprising if she brought up the subject of a prenup first. However, celebrities such as Paul McCartney, Katy Perry and Mel Gibson chose to forgo a prenup. It’s easy to get caught up in the romance of a marriage, but it’s important to mix in a little realism.

California is a community property state, meaning that assets are typically divided 50-50 upon divorce. If Zuckerberg and Chan signed a prenuptial agreement, they would have agreed exactly how to split assets, including his Facebook stock, if their marriage dissolved in the future. The resounding principle behind prenuptial agreements is spouses themselves can determine how their property will be classified; they can agree that what would generally be classified as community will be separate property of one or the other, and conversely, they can change separate property to community property.

The current trends toward delayed marriage, cohabitation, rising divorce and remarriage rates have combined to create a new awareness of the seriousness of the marital contract and the far-reaching consequences that contract, once made, can have on individual lives. Lonich Patton Erlich Policastri can assist you in understanding your legal rights, and help you protect your family.

The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling complex family law matters. If you are interested in learning more about prenuptial or antenuptial agreements, contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Every Marriage Needs a Prenup

February 22, 2012/in Family Law /by David Patton

While a prenuptial agreement may not be the most romantic gesture, every couple can benefit from creating one, even if at the time of marriage there are little assets. Assets may accumulate during the marriage and even young couples just starting their own careers should want to make sure that what they acquire during marriage is not left for a court to divide.

While prenups are often associated with divorce, discussing hypothetical scenarios can help to shed light on relationship expectations and help ensure decisions are made accordingly. Many people also do not realize that post-nuptial agreements are possible. The only catch is that they can be more difficult to procure and enforce as there are additional requirements. Waiting until the last minute to think about a prenuptial agreement can result in unnecessary pressure and force more couples into the more difficult post-nuptial route.

Of the many considerations in discussing a prenuptial agreement, none is more important than the fact that California is a community property state. This means that couples’ assets are typically divided 50/50 despite any special circumstances. Any couple that would prefer anything besides equal division needs a prenup to avoid it. Attorneys have compared prenups to life insurance policies, no one enjoys imagining the worst-case scenario but having a policy or prenup in place can make a significant life event less difficult.

The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling complex family law matters. If you are interested in learning more prenuptial or post-nuptial agreements, please contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Partnering Your Prenups and Estate Plans

February 9, 2012/in Estate Planning, Family Law /by Michael Lonich

Premarital, or prenuptial, agreements are usually associated with pre-marriage planning and divorce. However, they also provide several benefits for estate planning. Premarital agreements can protect one spouse from liability for the other spouse’s separate debts and help to implement other estate planning strategies. When premarital agreements and estate plans are considered in concert, couples can maximize financial planning and estate planning goals and avoid potentially triggering unintended tax consequences or inconsistent estate planning.

In California, a community property state, a surviving spouse has a 50% interest in all community property. This right supersedes the terms of a will but may be waived in a premarital agreement, which does not necessarily equate with disinheritance. Waiving community property rights allows spouses to specify the manner in which their assets will be distributed and helps to ensure that estate plans will be carried out as intended. This may be helpful, for example, in a family business setting. If one spouse runs a family business with his or her children, a waiver of community property rights will allow the business to pass more easily to the children without the other spouse acquiring an interest in the business, through divorce or inheritance.

There are several other scenarios in which a premarital agreement may affect an estate plan. Premarital transfers may trigger income and gift taxes; estate tax exemption opportunities for surviving spouses may be missed; and premarital agreements may not comport with estate plans for a family home. Premarital agreements often provide for the disposition of the family home or give the surviving spouse a right to continue living there. However, these provisions in a premarital agreement should be drafted such that they will not impede an estate plan’s ability to execute home-related strategies such as transferring the home to a qualified personal residence trust.

If you are interested in learning more about premarital agreements and estate plans, please contact the experienced family law and estate planning attorneys at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Court of Appeal Clarifies Seven-Day Waiting Period for Premarital Agreements

October 14, 2011/in Family Law /by Mitchell Ehrlich

California Family Code §1615 outlines the factors a court will consider when deciding whether to enforce a premarital agreement. If the court finds that, among other reasons, the agreement was not executed voluntarily or if the agreement was unconscionable (a fancy word for unreasonable), it will void a premarital agreement.

Section 1615(c) states that a premarital agreement will not be deemed voluntary unless the court makes three findings; one of them being that the party against whom enforcement is sought had not less than seven calendar days between the time the party was first presented with the agreement and advised to obtain a lawyer and the time the agreement was signed. The question most recently before the First Appellate Court was whether section 1615(c)(2) applied to a party who was represented by an attorney from the outset.

In Marriage of Cadwell-Faso & Faso, 191 Cal. App. 4th 945 (2011), husband (H) and wife (W) married in 2006. H was a wealthy, retired businessperson and W owned and operated her own business. Prior to their marriage, H’s attorney drafted a premarital agreement and presented it to W and advised her to seek independent counsel. W was unhappy with the agreement and her attorney subsequently drafted four separate addenda to which H disagreed. W faxed a goodbye letter to H following their inability to come to an agreement. Following further discussion, W’s attorney drafted a fifth addendum and faxed it to H. Six days later, H and W signed the agreement and were married

Eighteen months later, H and W sought dissolution of marriage. H asked the court to void the fifth addendum because he did not have seven days between the time of representation and execution and the agreement was thus involuntary per §1615(c)(2). The trial court ruled in H’s favor, finding that the requirements of §1615(c) were mandatory and the addendum was thus invalid. W appealed and the appellate court reversed. In its decision, the court could not determine from the text of the statute alone whether the seven-day rule was confined to unrepresented parties. Therefore, the court looked to the legislative history of §1615 and found that the legislature was concerned with situations where one party was not represented by counsel, not where counsel has been present from the start. The appellate court thus held that both the premarital agreement and the addendum were enforceable against H where he was represented by counsel throughout the premarital agreement process.

The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling premarital agreements. If you are contemplating marriage, please contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri, who can provide you with an in depth analysis of your issues. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Spousal Support Waivers in Pre-Nuptial Agreements Given Further Protection

June 2, 2011/in Family Law /by Mitchell Ehrlich

The California Appellate Court recently upheld a spousal support waiver in a pre-nuptial agreement despite the fact that, under current California Law, the provision should be struck down as invalid.

In the May 24th, 2011 appellate court decision of In re Marriage of Howell, the California Court of Appeal for the Fourth District enforced a future spousal support waiver of a pre-nuptial agreement signed in 1999; despite the fact that under California Family Code section 1612, the provision should have been invalidated. Family Code section 1612, which is part of the Uniform Pre-Marital Agreement Act, provides in subsection (c) that:

Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement.

Mrs. Howell signed the pre-nuptial agreement, containing a waiver of future alimony, at her husband’s request. At the time, she could not afford to hire an attorney to review the agreement and her husband (then, fiancé) did not offer to pay the cost for her to consult with an attorney.

At the trial court level, the court invalidated the spousal support waiver finding that Family Code section 1612, enacted in 2002, did in fact apply retroactively to the agreement, fully executed in 2002. On appeal, the appellate court did a full analysis of whether the statute should be applied retroactively to a 1999 agreement. Finding that it constituted a “material change in the law” and that it was not intended to apply retroactively, the appellate court ruled that the trial court erred in retroactively applying the statute and upheld the validity of the spousal support waiver.

If you have a Pre-Nuptial Agreement in place, if you are contemplating having one put together, or if you have been asked to sign a pre-nuptial agreement and you are concerned about how the Howell decision and Family Code Section 1612 may affect your rights, the Certified Family Law Specialists at Lonich Patton Erlich Policastri have substantial experience in handling pre-nuptial agreements. Please call our office to schedule a free half hour consultation.

A Recent Study Indicates More Women are Seeking Prenuptial Agreements Before Tying the Knot

April 5, 2011/in Family Law /by Julia Lemon

Prenuptial agreements are increasingly more common among women. This trend partially stems from the growing percentage of females in the modern workplace. Women today, more than before, are seeking to protect their separate property assets by ensuring a prenup is in place prior to marriage. In addition, couples are signing these documents in order to protect their pension and retirement accounts in the event of a later divorce.

A California prenuptial agreement is a contract executed between two prospective spouses, to be effective upon marriage. Generally, a prenuptial agreement addresses the parties’ present and future property rights, as well as other issues relating to the marital relationship. Certain issues may not be dealt with in a prenuptial agreement, such as child support or child custody. Other provisions may be invalidated if they are found to be contrary to public policy, such as “fault” or “penalty” provisions for infidelity or abuse. In addition, if you are considering waiving your spousal support rights in a prenuptial agreement, it is highly recommended that you retain your own attorney both to protect your legal rights and the enforceability of the agreement.

For more information on prenuptial agreements, please contact our family law attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Source:

San Francisco Chronicle

Premarital Agreements vs. Marital Agreements vs. Marital Settlement Agreements

February 17, 2011/in Family Law /by Mitchell Ehrlich

California family law is quite complex. For those who are not familiar with the workings of California law, it may be very difficult to differentiate between the terms “premarital agreement,” “marital agreement,” and “marital settlement agreement.”

A premarital agreement is a contract that is executed between two prospective spouses. The premarital agreement, or “prenup,” is entered into in anticipation of marriage with the idea that it will become effective upon the marriage of the two prospective spouses. Premarital agreements often address issues of the parties’ present and future property rights. Premarital agreements must comply with certain formalities to be enforceable.

A marital agreement, or postnuptial agreement, is a contract that is executed by spouses during marriage. This type of contract affects the rights and obligations incident to an ongoing marriage, both during life and after death. Post-nuptial contracts can be broad in scope, laying out in comprehensive detail the parties’ rights and duties towards each other and the characterization of property. This category also includes “transmutation” agreements, which are contracts changing the property status of a specific asset from its current form to another form (e.g. separate property to community property). Like a prenuptial agreement, marital agreements must comply with certain formalities in order to be enforceable. Additionally, spouses entering into postnuptial agreements must comply with their fiduciary obligations and act with the “highest good faith and fair dealing” towards one another.

A marital settlement agreement (MSA) is executed as part of a dissolution of marriage or legal separation. The MSA typically addresses the parties’ ownership of marital property and other rights and obligations in relation to divorce or separation. Usually, an MSA is incorporated into a judgment of dissolution, and the rights and obligations of the ex-spouses are governed by the terms of the final judgment.

Note that the same rules governing these agreements between spouses also generally apply to domestic partnerships. For more information about prenuptial agreements, marital agreements, or marital settlement agreements, please contact us.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Posts

Prenup Agreement in High Net Worth Marriage

Who Should Consider a Prenup Agreement?

What Are the Benefits of a Prenup Agreement?

What Is the Process Like of Creating a Prenup Agreement?

How Do I Talk to My Partner About Creating a Prenup?

Who gets the family pet in a divorce?

Forgot a Pre-Nup? Create a Post-Nup

From Bonds to Zuckerberg: The Importance of a Prenup in the Silicon Valley

Every Marriage Needs a Prenup

Partnering Your Prenups and Estate Plans

Court of Appeal Clarifies Seven-Day Waiting Period for Premarital Agreements

Spousal Support Waivers in Pre-Nuptial Agreements Given Further Protection

A Recent Study Indicates More Women are Seeking Prenuptial Agreements Before Tying the Knot

Premarital Agreements vs. Marital Agreements vs. Marital Settlement Agreements

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