Most people are familiar with the concept of prenuptial (or premarital) agreements, which are contracts entered into by couples prior to marriage. But postnuptial (or postmarital) agreements are also a popular, if less discussed, method for married couples to reach an agreement on property and other financial matters.
For the most part, prenuptial and postnuptial agreements achieve similar goals. In California, the most common purposes of these agreements are to: 1) address whether certain property should be treated as separate property or community property; and 2) address whether spousal support should be paid in the event of a divorce, and, if so, how much should be paid and for how long. A postnuptial agreement does not have to cover every issue that might arise in a divorce (and, indeed, some issues such as child support cannot be enforced through a prenuptial or postnuptial agreement), and really any written agreement between spouses affecting property ownership might be considered a postnuptial agreement, e.g. an agreement by which a husband gives a vehicle purchased with community property or his separate property to his wife to keep as her separate property.
(Note: The distinction between separate property and community property is critical in California family law. Separate property is the property a party has prior to the marriage, or which is gifted to them alone, while community property is the property either party earns or acquires with earnings during the marriage. Separate property is given to its owner in a divorce, while community property is split 50/50.)
But while prenuptial and postnuptial agreement often serve the same purposes, there are different legal requirements and standards to be aware of.
You Have Legal Duties and Obligations to Your Spouse
California law imposes a fiduciary duty between spouses, similar the fiduciary duty has to a trustee or a company director has to shareholders. Specifically, pursuant to Family Code section 721, “spouses are subject to the general rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other… This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.”
This “duty of the highest good faith and fair dealing” does not apply to unmarried people entering into a prenuptial agreement. And while there are fairness standards that apply to prenuptial agreements, the fiduciary relationship standard that applies between spouses who enter into postnuptial agreements is higher. This does not mean you cannot enter into a postnuptial agreement that benefits you (otherwise, there would likely be no reason to enter into it), but it does mean there may be more work to be done to ensure that the agreement benefits both spouses and that the agreement itself indicates why that is the case.
Relatedly, if your spouse one day wants to contest the postnuptial agreement, and a court sees that the agreement gives you an advantage over your spouse, the court may presume that the agreement was the product of undue influence. If you cannot overcome that presumption with evidence for why it was not the product of undue influence, then the court may refuse to enforce it.
The Dangers of an Unenforceable Postnuptial Agreement
In addition to potentially having an unenforceable agreement, there are several consequences that can follow from that which can cause enormous challenges. First, you may need to litigate those financial matters you had thought were settled via the agreement in an expensive, messy divorce (and it may cost a pretty penny just to litigate the enforceability of the agreement itself).
Second, if a court finds that you did breach your fiduciary duties to your spouse, the court may have legal grounds to award more property to your spouse (e.g. 100% of community property) than would have been awarded had there been no agreement at all.
Ideally, both spouses should have an attorney assist them in the negotiating and finalization of a postnuptial agreement. Not only does this ensure that the parties understand the terms of the agreement and achieve their goals with the agreement, but both parties having independent legal counsel can also prevent successful arguments being made years later to prevent enforceability of the agreement and for breach of fiduciary duty.
Guidance on Your California Postnuptial Agreement Questions From a Westlake Village Family Law Attorney
If you would like to learn more about how our office can provide guidance on your Postnuptial Agreement issues or any other California family law issues you are facing in Ventura County or Los Angeles County, contact the Zonder Family Law Group office today at (805) 777-7740 or (818) 877-0001, or schedule your strategy session using easy-to-use online form here.