Contractual Modification

1
Contractual Modification

• Premarital Agreement
• Marital Agreement or Transmutation
• Marital Settlement Agreement

2
Changes in Law

• Prior law made it too easy to transmute property,
  leading to many legal disputes at divorce
• January 1, 1985 Transmutation requirements
• January 1, 1986 Uniform Premarital Agreement Act

3
Premarital (Antenuptial) Agreements

• a contract executed between prospective spouses
  in contemplation of marriage, fixing marital
  property rights and financial responsibilities
  upon consummation of the marriage.
• Not subject to fiduciary duty standard applicable
  during marriage
• Formality required

4
Prior Law Premarital Agreement

• Before January 1, 1986
• must be in writing and be executed and
  acknowledged or proved in like manner as a grant
  of land is required to be executed and
  acknowledged or proved
• Exceptions to writing requirement (statute of
  fraud rules)
• Fully executed oral agreement
• Written memorandum by party to be charged
• Full performance or relied upon partial
  performance
• Marriage not enough
• Payment of money not enough

5
Proper subject of Premarital Agreement

• Property rights of either spouse
• Disposition of property upon death or divorce or
  any other event
• Making of a will or trust
• Insurance death benefits
• Choice of law
• Any other matter not violating public policy

6
Limits on Premarital Agreement

• Cannot promote divorce In re Marriage of
  Noghrey
• Cannot limit the statutory child support duty
• Cannot waive the marital spousal support duty
• Cannot alter the legal relations of the parties
  during marriage
• Cannot provide payment for household services or
  companionship
• Cannot alter obligations of mutual respect,
  fidelity and support
• Cannot agree to pay damages for fault during
  marriage
• Cannot agree to raise children in a specific
  religion

7
1986 - UPAA

• Jan. 1, 1986 Uniform Premarital Agreement Act
• Must be in writing, signed by both parties
• Effective upon marriage
• May be amended or revoked after marriage only by
  written agreement signed by both parties (can be
  w/o consideration)

8
UPAA - Unenforceability

• Family Code 1615(a)-(b)
• Party against whom enforcement is sought may
  prove
• Did not execute voluntarily
• Unconscionable and before execution
• No fair, reasonable, and full disclosure of other
  partys property and obligations and
• Disclosure not expressly waived in writing
• Did not and reasonably could not know of property
  or financial obligations absent disclosure
• Unconscionability is for the court to decide

9
Marriage of Bonds

• 24 Cal. 4th 1 (2000)
• Construing 1986 version of UPAA

10
2002 Amendments to UPAA

• the party against whom enforcement is sought be
  represented by independent counsel when the
  agreement is signed unless independent legal
  representation is expressly waived in a separate
  writing
• the party against whom enforcement is sought be
  represented by independent counsel in connection
  with any provision affecting spousal support
• the disclosure of property and financial
  information be 'fair, reasonable, and full
• there be at least seven days between the time a
  premarital agreement is first presented to a
  party and the time it is signed and
• a pro per be fully informed of the terms and
  basic effect of a premarital agreement as well as
  the rights and obligations he or she is
  relinquishing by signing the agreement, with such
  advice memorialized in writing

11
Marital/Transmutation Agreement

• to modify or prevent the application of
  California community property law to all or some
  portion of the spouses' property or income or to
  change the character of their property from
  community property to separate property or vice
  versa
• SP - CP CP- SP or SP1 - SP2
• Law changed January 1, 1985
• Change is not retroactive
• General principles of contract law apply
• Except no consideration is required beyond mutual
  consent

12
Fiduciary Relationship During Marriage

• Family Code 721
• HW subject to normal fiduciary rules
• Duty of highest good faith and dealing neither
  shall take advantage of other
• Right to accounting as in a nonmarital business
  partnership
• No duty to keep books
• Presumption of undue influence
• If agreement gives one spouse an advantage over
  the other it is presumptively a product of undue
  influence and inadequate consideration
• Benefitted spouse may rebut presumption
• Full and knowing agreement
• Disclosure of all relevant facts
• Independent legal counsel

13
Prior Law Before 1985

• Transmutation could be proven by writing, oral
  agreement, or implied agreement (conduct)
• Look to facts to determine parties intent
• Very flexible standard (subject to title
  presumptions discussed later in class)

14
Writing Required to Transmute

• After January 1, 1985
• Made in writing by an express declaration that is
  made, joined in, consented to, or accepted by the
  spouse whose interest is adversely affected
• Not effective to third parties w/r/t real estate
  unless recorded

15
Estate of Bibb

• Real Property
• Grant deed signed by H transferring SP interest
  to himself and W as JTs
• Rolls Royce
• DMV printout showing that car registered in H
  name was reregistered in W name

16
Exception to writing requirement

• a gift between the spouses
• clothing, wearing apparel, jewelry, or other
  tangible articles of a personal nature
• that is used solely or principally by the spouse
  to whom the gift is made
• that is not substantial in value taking into
  account the circumstances of the marriage.

17
Marriage of Steinberger

• Married April 30, 1988
• Separated June 14, 1997
• 5th Anniversary Diamond Ring
• Bought with CP