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Spousal Support and Prenuptial Agreements
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Family Law Update - May 1998

Spousal Support and Prenuptial Agreements - A New Era?

Court decides support can be waived, but leaves one essential question unanswered.

Spousal support is probably one of the most talked about issues when it comes to divorce. It is one of those issues that is never resolved satisfactorily. The spouse who pays it always pays too much, and the spouse who receives it never gets enough, and certainly not for long enough. Once it has been set it seems to be the subject of ongoing strife. The paying spouse (and frequently their new "significant other) awaits the day the last check is to be sent, which never arrives early enough. The spouse receiving it thinks the date should be extended. It is not uncommon for the parties to go back and forth in the interim arguing over the amount and whether it should be adjusted. To be sure, the appellate courts of our state have not consistently determined how to handle it.

Now comes a new twist. Prior to last month it had been the generally accepted state of the law in California that in drafting a prenuptial agreement there could be no provision made concerning the issue of spousal support. Although parties could contract concerning the property issues that would arise in their upcoming marriage, and although they could negotiate their own arrangement concerning liabilities to modify existing community property law, they could not negotiate any terms concerning the future disposition of spousal support.

Now that may be changing. In the recent decision of Pendleton v. Firestone, the Court of Appeal for the Second District determined that spousal support is something that may be addressed in a prenuptial agreement. Unfortunately, although the decision potentially opens the door for a potential resolution of this issue in advance of marriage, the Pendleton case does not completely resolve the issue. Nonetheless it is something to consider and it creates a potential problem for persons about to enter into a prenuptial agreement and their lawyers.

Prenuptial agreements in California are governed by the state enactment of the Uniform Premarital Agreement Act which is in effect in most jurisdictions. The Act gives parties the power to contract on just about all issues of a financial nature, but is silent on the issue of spousal support. California case law held that a prenuptial agreement which addressed spousal support provisions was void as against public policy because it was "promotive of divorce". In other words, negotiating spousal support in advance could give one spouse an incentive to divorce sooner, rather than later, especially if divorcing sooner meant less of a financial liability in terms of the payment of support.

In the Pendleton case, the appellate court saw no reason to follow that line of thinking. Society has changed and divorce is significantly more prevalent today than it was when the first cases addressed this issue at the beginning of this century. Moreover, the treatment of divorce in a legal sense has changed as well. The legislature abolished the requirement that grounds be proven for a divorce years ago. With the abolition of fault, also came the abolition of the concept of unequal division of property in order to compensate the aggrieved spouse. If women (the traditional recipients of spousal support) were now equals in society, there seemed no logical reason that they should not be able to contract regarding this issue, and they no longer needed the protection of the courts in said regard. With that in mind, the appellate court felt that there was no logical reason to deny parties the ability to contract on this issue, just as they had the ability to contract on other issues relating to the marriage.

Furthermore, a review of the state of the law around the country revealed that many states now permitted the contracting of an agreement concerning support. In fact, only four states expressly precluded it.

Having considered all of the foregoing, the court found that there was no logical reason to continue the policy prohibiting contracting spousal support rights.

However, that does not resolve the issue entirely. While the appellate court determined that such a contract is not violative of public policy per se, it did not state that the specific provision addressed in the Pendleton case was enforceable. Rather, the court remanded that case to the trial court to determine whether or not it would enforce the provision in this particular instance.

In Pendleton two wealthy and well educated individuals signed a prenuptial agreement that waived spousal support in the event of a divorce. In the course of the divorce proceedings, the wife asserted that the waiver was invalid under California law and unenforceable. She requested an order for spousal support. At the time of trial, Husband objected to the payment of support based on the terms of the prenuptial agreement. The court overruled his objections and ordered support for the wife, believing the waiver to be unenforceable. That ruling resulted in the appeal.

Unfortunately, the appellate court did not give any guidance in terms of what would and would not constitute an enforceable waiver. Having left the question open, the court has failed to give direction to persons signing such agreements in the future. We do not yet know what the components for an enforceable waiver will be. Those components may include the typical "knowing and intelligent" requirement applied in other contexts. In plain language this means that the "waiving spouses" are aware that they are giving up the right, and at the same time the consent to give up the right is understood. However, there is an entirely separate body of law on what constitutes a valid waiver in other situations and we do not yet know how that may affect these agreements.

For persons who are considering a prenuptial agreement in the future, it seems that the safest way of handling the issue at this point is to provide for the waiver, and to do so in such a manner that it is clear that the waiving party had full knowledge of the effect of the waiver and their right not to consent to it. However, persons seeking a waiver in such an agreement should be aware that until further law is made in this regard, the waiver may or may not be enforceable.

For persons who have already signed such an agreement, all hope is not lost. Under California law, parties may execute an agreement concerning their property rights at any time, including after a marriage. If both parties are willing to negotiate this additional provision, they should be able to follow the same guidelines as couples who have not yet married. Of course, both parties must agree to the waiver in order for it to be effective.

The Pendleton decision creates a quandary for family law attorneys. In fact, as a result of the decision many attorneys are refusing to draft prenuptial agreements until there is further direction from the courts on this issue. Our office is continuing to prepare prenuptial agreements, while at the same time obtaining the written acknowledgment of our clients in terms of the status of the law and the potential effect of the waiver if they choose to include such a provision in their agreements.

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Family Law Update is published periodically by Fred Silberberg, Prof. Corp.

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 ©1998 Fred Silberberg, Prof. Corp.