Challenging Premarital Agreements In California

When news of the Brad Pitt and Angelina Jolie divorce first broke in September 2016, multiple sources insisted that the couple had an “ironclad” prenuptial agreement. If you don’t believe me, just Google “Bran-gelina ironclad” and see for yourself. Altogether, Mr. Pitt and Ms. Jolie own twelve properties across the globe, seven are in his name, two are in her name, and three are in both their names, although these properties were all purchased before the marriage.

Normally, the property division would be incredibly complicated, as divorce attorneys would probably spend hundreds of hours simply categorizing the homes and lands as either community or separate property. The premarital agreement obviated all this work. Unfortunately in this case, the relative spirit of planning and collegiality regarding the property division did not spill over into the child custody arena, but that’s the subject of a different post.

Back to the property division. No contract made between two people, and that includes premarital agreements, is truly “ironclad.” Before the advent of the Uniform Premarital and Marital Agreements Act in the 1990’s, there was a complex network of laws in this area. Even worse, different states had different ideas as to what did, and did not constitute a valid agreement, so what was legal in New York might be illegal in California. Now, the process is a bit more streamlined. Basically, to overturn a premarital agreement, the challenging party must prove that it was either involuntary and unconscionable.

Involuntary Premarital Agreements 

Retired slugger and notorious lightning rod Barry Bonds may not be in the Baseball Hall of Fame just yet (if ever), but thanks to In Re Marriage of Bonds, his name is forever inscribed in the annals of California family law. This case is noteworthy not so much for what the Supreme Court decided, but rather what lawmakers did in response to the opinion.

In 1988, Mr. Bonds married Swedish beauty Susann “Sun” Margreth Blanco. At the time, Mr. Bonds was an All-Star outfielder for the Pittsburgh Pirates and Ms. Blanco was an unemployed bartender. In the 1980’s, about the only people who obtained prenuptial agreements were people with substantial assets to protect, and Mr. Bonds certainly fell into that category. His cadre of lawyers drafted an extensive premarital agreement which basically said that everything Mr. Bonds owned prior to the marriage would remain his separate property. Ms. Blanco, who had no lawyer, signed the accord. In 1994, when the couple divorced, the trial court initially upheld the premarital agreement, ruling that Ms. Blanco did not meet her burnde of proving involuntariness under then-existing California law.

The Supreme Court later affirmed. While it acknowledged that the two sides definitely had unequal bargaining power, that discrepancy did not render the agreement unenforceable, because family law and commercial law contracts are judged according to different standards. Furthermore, the court found substantial evidence of voluntariness in the record. 

Almost immediately thereafter, the Legislature reworked Family Code 1615 to include a presumption that premarital agreements in California are invalid unless the challenging party:

• Had a lawyer (or properly waived representation).
• Received at least seven days to review the premarital agreement.
• Had the legal capacity to sign.
• Signed the agreement without any “fraud, duress, or undue influence.”

In effect, the non-challenging party now has the burden of proof to prove that the agreement was voluntary, as opposed to the other way around.

Unconscionable Prenuptial Agreements

Much like the Bonds case, In Re Marriage of Facter featured two people from different worlds. Husband was a Harvard-educated attorney who, at the time of the marriage, earned a half-million dollars a year (an income that had doubled by the time of divorce) and owned over $3 million in separate property. Wife was an unemployed high school graduate who already had custody of two minor children. The couple’s premarital agreement capped alimony at $40,000 a year for five years, an amount the court called “manifestly inadequate” when compared with “what she is likely to receive in court-ordered spousal support” if there had been no property agreement.

In commercial contract law, “unconscionable” basically has two elements: involuntariness and a one-sided agreement that clearly favors the non-challenging party. But as the Supreme Court explained in Bonds, family law agreements are a different ballgame (no pun intended). As for community/separate property, the court will accept almost any division and not ask too many questions. But the court will scrutinize spousal support division, especially if the agreement contains a waiver. If there is a substantial difference between the agreed amount and the amount the spouse would have otherwise received, the court will probably deem the premarital agreement to be unconscionable.

Curiously, the Facter court put little stock in the unconscionable “when made” language of the UPMAA. $200,000 over five years is probably a reasonable amount for a half-million dollar annual income and a brief marriage, but the cap was clearly “inadequate” at the time of divorce.