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Celebrity Prenuptial Agreements: What Is Enforceable and What Is Not.

June 26, 2015/in Family Law /by Mitchell Ehrlich

When celebrity couples get married, celebrity news outlets and magazines are always quick to report on the details of the couples’ prenuptial agreements. More often than not, these reports feature prenuptial agreement clauses that are outlandish and extreme. To some, these celebrity prenuptial agreement clauses seem laughable and ridiculous, but for others, they are right on the money and reflect the types of items we desire in our own prenuptial agreements.  Regardless of which camp you belong to and the validity behind these reports, the clauses in celebrity prenuptial agreements do offer some points to think about. For purposes of this blog, the question is not whether the reports on these prenuptial clauses are true, the question here is whether California courts will actually enforce these types of clauses.

Before we dive into specific celebrity prenuptial clauses/provisions, let’s cover some important implications related prenuptial agreements should be covered:

1. California is a “no-fault” divorce state. Many recognize the phrase “no-fault divorce” by its legal version, “irreconcilable differences.”

2. California is a community property state, meaning that spouses share 50/50 interest in property acquired during their marriage.

3. Courts faced with a prenuptial agreement with unenforceable clauses/provisions will either invalidate the entire prenuptial agreement, or will enforce the valid portions and just sever or ignore the unenforceable parts. Couples can prevent the former from occurring by including a “severability clause” or provision in their prenuptial, which provides that the invalidity of one or more provisions shall not invalidate the remaining provisions and allows the remaining provisions to be severed and enforced according to their terms.

4. Despite California being a community property state, premarital agreements may validly preserve the separate property character of premarital assets and characterize income and property acquired after marriage.

5. In California, premarital agreements that include a waiver or limitation of post-dissolution of spousal support are not per se unenforceable, as long as it was “executed by intelligent, well-educated persons, each of whom appears to be self-sufficient in property and earning ability, and both of whom have the advice of counsel regarding their rights and obligations as marital partners at the time they execute the waiver … .”

Now that we have covered some important aspects of California law as it pertains to premarital agreements, let’s look at some of the most intriguing clauses/provisions of celebrity couples’ prenuptial agreements:

  • Justin Timberlake and Jessica Biel: The “Fidelity Clause,” which states that if Justin cheats, Jessica gets a payout of $500,000.

Enforceable?

In California, this provision is unenforceable as contrary to the public policy underlying no-fault dissolution laws to the extent it imposes a penalty on one of the parties for “fault” during marriage.

  • Facebook mogul, Mark Zuckerberg and wife, Priscilla Chan: The clause that requires Mark to totally unplug and spend quality (non-wired) time with Priscilla at least once a week.

Enforceable?

An article in the ABA Journal from June 2013, refers to this as a “Lifestyle Clause.” The article explains that while most of these types of provisions are unenforceable in court, they are still useful because they help couples discuss goals and make them more likely to stick.

  • Catherine Zeta-Jones and Michael Douglas: Provisions provide that Catherine gets $2.8 million for every year they were married. Plus, another $5 million if Michael cheats.

Enforceable?

The first part may be enforceable. The enforceability of the $2.8 million per year of marriage provision depends on how the court construes the payment amount and structure. CA courts have enforced agreements that include a payment of a specified sum to one spouse when the purpose of such payment was to ensure that, if one spouse died or the marriage was dissolved, the other would be no worse off than he/she would have been had he/she remained single (typically the woman).

The amount “per year” language is also indicative of a pre-determined spousal support amount. California does permit couples to set their own spousal support agreements so long as the amount paid is at or above the state guideline.

However, if the court construes the amount to be “promotive of dissolution” then it will not enforce it. The provision at issue is not technically one lump sum payment in the event of dissolution, but rather is a one lump sum with a total contingent on the number years married. Typically, this could be considered “promotive of dissolution” as it offers Catherine a huge sum of money for dissolution, but-for two things-

(1) Catherine is a high-paid Hollywood actress, making this total amount per year less inducing of dissolution, and

(2) Catherine only stands to gain a large sum of money per this provision because the marriage has lasted over a decade, making this provision arguably more promotive of marriage.

As for the $5 million payout if Michael cheats?

Similar to the “fidelity clause” of Justin Timberlake and Jessica Biel, this is unenforceable in California.

  • Khloe Kardashian and Lamar Odom: Provisions state that in the event of dissolution, Khloe is to receive $500,000 for every year they were married, $25,000 in general support, their house, a new luxury vehicle at the end of every lease cycle, $5,000 per month for shopping, $1,000 a month for beauty care, and Lakers tickets for Kardashian’s friends and family.

Enforceable?

While to some readers these provisions may seem exorbitant, these amounts may reflect Ms. Kardashian’s level of lifestyle during the marriage. CA law recognizes premarital agreements where couples reorder property rights to fit their needs and desires, and participate in realistic planning that takes account of the possibility of dissolution, including provisions for spousal support. Thus, Khloe and Lamar were within the law to contract these post-dissolution lifestyle maintenance amounts.

Today’s review of prenuptial agreements was just an exercise. It was by no means a full review of the law on California prenuptial agreements. Further, the celebrity prenuptial agreement clauses discussed today were only used to illustrate the point of enforceability. This blog does not purport to confirm or deny the existence of the above-mentioned clauses.

If you have any questions about premarital agreements, or any other issue, the Certified Family Law Specialists at Lonich Patton Erlich Policastri have decades of experience handling complex family law matters. 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.

https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png 0 0 Mitchell Ehrlich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Mitchell Ehrlich2015-06-26 10:59:262021-12-22 20:31:19Celebrity Prenuptial Agreements: What Is Enforceable and What Is Not.

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

 

https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png 0 0 Mitchell Ehrlich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Mitchell Ehrlich2011-10-14 09:24:292021-12-22 21:34:37Court of Appeal Clarifies Seven-Day Waiting Period for Premarital Agreements
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