cal legal forms chapter 111. premarital agreements

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33-111 California Legal Forms--Transaction Guide 111.200

1 of 13 DOCUMENTS

California Legal Forms--Transaction Guide

Copyright 2014, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

DIVISION VII: PERSONAL TRANSACTIONS

CHAPTER 111 PREMARITAL AGREEMENTS

PART IV. FORMS

A. Complete Agreements


111.200 Complete Premarital Agreement--Parties' Interests in Property Acquired After Marriage to Be Separate

[1] Comment

[a] Use of Form

The form set forth in [2], below, is a complete premarital agreement covering the property rights of prospective spouses [see Fam. Code 1612(a)(1)-(3) (general right of parties to make premarital agreement regarding property interests, management and control of property, and disposition of property on separation, dissolution, or death)]. It is designed to be used by prospective spouses, each of whom is represented by independent counsel in the negotiation and preparation of the agreement, who do not wish to mingle or share their interests in property earned, accumulated, or in any other way received by either of them during their marriage or brought to that marriage by either of them. In the absence of such an agreement, the property acquired through their efforts during the marriage generally would be community property [see Fam. Code 760; see, e.g., In re Marriage of Valli (2014) 58 Cal. 4th 1396, 1399, 1400-1406, 171 Cal. Rptr. 3d 454, 324 P.3d 274 (in absence of formal transmutation pursuant to Fam. Code 850 et seq., life insurance policy acquired with community funds during marriage is community property, even if one spouse is named as sole owner and beneficiary of policy)]. For a full discussion of the characterization of property acquired during marriage, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, Ch. 20, Community Property: General Characterization and Division Principles (Matthew Bender 2d ed.).

This form provides for a complete separation of the property interests of the prospective spouses and specifies that their respective incomes and accumulations during marriage will be deemed the separate property of the spouse receiving those earnings or accumulations. It also contains a complete mutual release of all marital rights to the property of each spouse.

This form is sufficiently general that it should be enforceable with respect to property that either spouse might own in another state. However, the laws of another state in which either of the parties owns real property should be consulted to ensure that any recording or other requirements are satisfied.

[b] No Presumed Confidential or Fiduciary Relationship Between Prospective Spouses

In California, unlike many other states [see Lindey, Separation Agreements and Antenuptial Contracts, vol. 2. (Matthew Bender)], prospective spouses who enter into a premarital agreement are not presumed to occupy a confidential or fiduciary relationship with respect to one another [see Fernandez v. Fernandez (1961) 194 Cal. App. 2d 782, 790, 15 Cal. Rptr. 374] . Paragraph 1 of this form provides that the parties are entering into the agreement "in contemplation of their marriage."

[c] Purpose Clause

Paragraph 2 of this form states that the parties are entering into the premarital agreement in order to define their property rights and to preclude the operation of the community property laws on their property after they are married. The purpose clause is included to make it clear that the parties are not attempting, by way of premarital agreement, to alter their "legal relations." For a general discussion of provisions that are considered to alter the "legal relations" of spouses and that are therefore void and unenforceable as against public policy [see Fam. Code 1620; see 111.32].

[d] Disclosure of Assets and Enforceability of Agreement

A premarital agreement is unenforceable if it was unconscionable when it was executed and, before execution one party (1) was not provided a fair, full, and reasonable disclosure of the property or financial obligations of the other; (2) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other beyond the disclosures provided; and (3) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party [Fam. Code 1615(a)(2)(A)-(C)]. Any issue of unconscionability of a premarital agreement is a matter of law to be decided by a court [Fam. Code 1615(b)]. Additionally, a premarital agreement is deemed involuntary unless the court finds in writing or on record the requirements of Fam. Code 1615(c), which requires the need for independent counsel by each party, the requirements for a valid waiver of independent counsel, and of a period of seven calendar days between presentment and signing of the agreement [Fam. Code 1615(c); but see In re Marriage of Cadwell-Faso & Faso (2011) 191 Cal. App. 4th 945, 956-962, 119 Cal. Rptr. 3d 818 (seven-calendar-day requirement does not apply to party who was represented by counsel from outset of transaction); for additional discussion, see 111.20[2][d], [f]].

Paragraph 3(a) of this form states that the prospective spouses fully disclosed to one another the nature and extent of their assets and debts or other obligations. Exhibits A and B contain lists of that property and also specify the extent of any encumbrances or indebtedness of the prospective spouses. The exhibits must as accurately as possible reflect the value of each prospective spouse's assets and the amount of party's liabilities (including contingent liabilities, such as potential tax liabilities) as of the date that the premarital agreement is executed. Paragraphs 3(b) and 3(c) make reference to the parties' understanding concerning these Exhibits, and recite the parties' acknowledgment of having read the Exhibits and of entering into the agreement voluntarily and with a complete understanding of it.

Paragraph 3(d) makes reference to the parties having executed a written waiver of any disclosure of assets and obligations beyond that which has been disclosed as of the time the waiver was made. A written waiver of disclosure must be executed before the time that the premarital agreement is executed [see Fam. Code 1615(a)(2)(B)]. It is appended as Exhibit C, and reference to that Exhibit is made in Paragraph 3(d).

For a summary of the general requirements for enforceability of a premarital agreement, see 111.12.

[e] Children of Each Party

The first alternative Paragraph 4 of this form lists the children of each party. This paragraph is included to ensure that each party is fully aware of the potential heirs of, and possible duties of support [see Fam. Code 3900, 3910(a), 4300, 4400] owed by, the other party. If neither of the prospective spouses has children, the second alternative Paragraph 4 should be used.

If the prospective spouses wish to make an agreement specifically relating to their duties to either, or both, of their children (for example, regarding support of the other party's children), those provisions may be added to this form following Paragraph 4. For a provision requiring one party to contribute to the support of the other party's children from a previous marriage or relationship, see the form in 111.221.

[f] Mutual Release of Marital Rights

Paragraph 6 of this form contains a mutual release of all marital rights to the property of the other spouse. By including this provision, the parties agree to release any interest either one of them might have in the property of the other as an incident to their marital relationship, such as the right to dower or curtesy, which have been abolished in California [see Prob. Code 6412], but which may exist in another state in which the one or both parties own property, rights of succession to the other party's property on the death of the other party [see Prob. Code 140 et seq.], and community property rights.

The waiver of marital rights in the property of a prospective spouse may be accomplished through the use of general language in a premarital agreement. Whether the general language used in a particular premarital agreement is sufficient to waive specific rights is a question of construction. Each case must be determined in light of all surrounding circumstances as disclosed by the record and by the language used in the agreement [ Estate of Schwartz (1947) 79 Cal. App. 2d 308, 309, 179 P.2d 868] . General language is sufficient to effectively relinquish the right to a family allowance [see Estate of Wamack (1955) 137 Cal. App. 2d 112, 117, 289 P.2d 871] and the right to be the administrator of the estate of the deceased spouse [see Estate of Warner (1914) 168 Cal. 771, 773, 145 P. 504 ; see also Warner v. Warner (1904) 144 Cal. 615, 618-619, 78 P. 24] . The right to declare a homestead may be waived only by clear and explicit language [see Warner v. Warner (1904) 144 Cal. 615, 618-619, 78 P. 24] .

The Uniform Premarital Agreement Act [see Fam. Code 1600 et seq.] states specifically that premarital agreements may contain provisions regarding the disposition of property and regarding the making of a will, trust, or other instrument to carry out the provisions of the agreement [see Fam. Code 1612(a)(3), (4); see also Warner v. Warner (1904) 144 Cal. 615, 617-618, 78 P. 24 ; see also Estate of Warner (1907) 6 Cal. App. 361, 363, 92 P. 191] .

Paragraph 6(b) provides that neither party has made any promise to the other regarding any bequests or devises in his or her will.

[g] Acknowledgment

This form is designed to be used when one or both parties own or plan to acquire real property. Under the Uniform Premarital Agreement Act, a premarital agreement may be executed and acknowledged or proven like a grant of realty and subsequently recorded in each county in which real property affected by the agreement is located; but acknowledgment, proof, and recordation are not required as such for the agreement to be enforceable [Fam. Code 1502(a), 1503]. Recording or non-recording of a premarital agreement has the same effect as recording or non-recording of a grant of real property [Fam. Code 1502(b)]. Prior to January 1, 1986, all premarital agreements involving property were required to be executed and acknowledged or proved in like manner as a grant of land is required to be executed and acknowledged or proved [former Civ. Code 5134 (applicable to agreements executed before January 1, 1986)]. For a complete discussion of the formalities required in the conveyance of interests in real property, see California Legal Forms, Chapter 27, Deeds and Recording (Matthew Bender).

This agreement contains a form of acknowledgment of the parties' signatures by a notary or other authorized officer [see Code Civ. Proc. 1189(a)]. For full discussion of the requirements and legal effects of an acknowledgment, see California Forms of Pleading and Practice, Acknowledgments (Matthew Bender).

[2] FORM

Complete Premarital Agreement--Parties' Interests in Property Acquired After Marriage to Be Separate

PREMARITAL AGREEMENT

Parties

1. ___________________[Name of prospective spouse], ___________________[address], and ___________________[name of prospective spouse], ___________________[address], in contemplation of their future marriage, now enter into this Premarital Agreement.

Purpose

2. The parties enter into this Agreement for the purpose of defining their respective property rights following their contemplated marriage. They intend that all property owned by either of them at the time of the marriage shall remain thereafter the separate property of the party who owns the property. They further intend that all additional property of any nature that either of them acquires after marriage shall be the separate property of the acquiring party, and not community estate property. The parties further intend to avoid any interests that, except for the operation of this Agreement, each of them might acquire in the property of the other as incidents of their marital relationship. The parties specifically intend that they will not acquire any community estate property after their marriage.

Disclosure of Property

3. (a) Each party has made a full, fair, and reasonable disclosure to the other party of all assets that he or she owns, and all debts, liabilities, or other obligations owed by him or her. A list of all assets owned, and obligations owed, by ___________________[name of first prospective spouse] is set forth in Exhibit A, which is attached to and made a part of this contract. A list of all assets owned, and obligations owed, by ___________________[name of second prospective spouse] is set forth in Exhibit B, which is attached to and made a part of this Agreement.

(b) The parties understand that the figures and amounts set forth in Exhibits A and B are approximately correct and not necessarily exact, and that they reflect the values of the listed property on or about the date of this Agreement.

(c) Each party acknowledges that he or she has read Exhibits A and B, that he or she is entering into this Agreement freely and voluntarily, and that he or she understands the contents of this Agreement.

(d) Each party acknowledges having voluntarily and expressly waived in writing any right to disclosure of the property and financial obligations of the other party beyond the disclosure already provided to date, and that such written waiver was made by an instrument that was executed prior in time to the execution of this Agreement. This waiver is attached hereto as Exhibit C.

[EITHER, if one or both parties have children from a previous marriage or relationship: ]

Children of Prospective Spouses

4. (a) ___________________[name of female prospective spouse] ___________________[has no children by any prior marriage or other relationship or is the mother of the following children]:

[List children's names and date of birth, using as many lines as necessary:]

(1) Name:

___________________ Date of Birth:

___________________ .

(2) Name:

___________________ Date of Birth:

___________________ .

(b) ___________________[name of male prospective spouse] ___________________[has no children by any prior marriage or other relationship or is the father of the following children]:

[List children's names and date of birth, using as many lines as necessary:]

(1) Name:

___________________ Date of Birth:

___________________ .

(2) Name:

___________________ Date of Birth:

___________________ .

[OR, if neither party has children from a previous marriage or relationship:]

4. Neither party has any children by any prior marriage or other relationship.

[Continue as follows:]

Property of Each Spouse to Be Separate

5. (a) ___________________[Name of first prospective spouse] agrees that all property of any nature or in any place, including but not limited to the earnings and income resulting from the personal services, skill, effort, and work belonging to ___________________[name of second prospective spouse] during the marriage, or acquired by or coming to ___________________[name of second prospective spouse] by purchase, gift, inheritance, or other means during the marriage, shall be the separate property of ___________________[name of second prospective spouse] and shall be subject to his/her disposition as separate property, in the same manner as if no marriage had been entered into.

(b) ___________________[Name of first prospective spouse] acknowledges that, except for this Agreement, the earnings and income resulting from the personal services of ___________________[name of second prospective spouse] during the marriage would be the community property in which ___________________[name of first prospective spouse] would have a one-half interest, but that by this Agreement those earnings and income are made the separate property of ___________________[name of second prospective spouse].

(c) ___________________[Name of second prospective spouse] agrees that all property of any nature or in any place, including but not limited to the earnings and income resulting from the personal services, skill, effort, and work belonging to ___________________[name of first prospective spouse] during the marriage, or acquired by or coming to ___________________[name of first prospective spouse] by purchase, gift, inheritance, or other means during the marriage, shall be the separate property of ___________________[name of first prospective spouse] and shall be subject to his/her disposition as separate property, in the same manner as if no marriage had been entered into.

(d) ___________________[Name of second prospective spouse] acknowledges that, except for this Agreement, the earnings and income resulting from the personal services of ___________________[name of first prospective spouse] during the marriage would be the community property in which [second prospective spouse] would have a one-half interest, but that by this Agreement those earnings and income are made the separate property of ___________________[name of first prospective spouse].

Release of Marital Rights to Separate Property

6. (a) The parties agree to waive and release any and all equitable or legal claims and rights, actual, inchoate, or contingent that he or she may acquire in the separate property of the other by reason of their marriage, including but not limited to:

(1) The right to a family allowance;

(2) The right to a probate homestead;

(3) The right to claims of dower, curtesy, or any statutory substitutes provided by the laws of the state in which the parties or either of them die domiciled or in which they own real property;

(4) The right of election to take against the will of the other;

(5) The right to a distributive share in the estate of the other should he or she die intestate;

(6) The right to declare a homestead in the separate property of the other; and

(7) The right to act as estate administrator of the other.

(b) Nothing in this Agreement shall be deemed to constitute a waiver by either party of any bequest or devise that the other party may choose to make to him or her by will or codicil. [Add, if appropriate: However, the parties acknowledge that neither of them has made any promises of any kind to other regarding any bequests or devises.]

Execution of Other Instruments

7. Each party agrees, on the request of the other, to execute, deliver, and properly acknowledge any documents that may be required to carry out the intention of this Agreement and to execute, deliver, and properly acknowledge any deeds or other documents in order that good and marketable title to any separate property can be conveyed by one party free from any claim of the other party acquired by him or her by reason of their marriage.

Representation by Separate Counsel and Presentment of Agreement

8. Each party acknowledges that he or she has been represented by independent counsel in the negotiation of this Agreement; that counsel representing each party is one of his or her own choosing; and that each party has read this Agreement and understands it. Each party further acknowledges that not less than seven days have elapsed between the time the agreement was presented to each of them [and each was advised to seek independent counsel] and the time this agreement was signed.

Binding Effect

9. This Agreement shall bind and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns.

Integration Clause

10. This Agreement constitutes the entire understanding between the parties concerning the subject matter that it covers. Any oral representations or modifications made prior to or after execution of this Agreement concerning the subject matter of this Agreement shall have no force or effect. However, this Agreement may be subsequently modified by a writing specifically referring to this Agreement and signed by both parties.

Effect of Partial Invalidity

11. If any term, provision, promise, or condition of this Agreement is determined by a court of competent jurisdiction to be invalid, void, or unenforceable, in whole or in part, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

Governing Law

12. This Agreement shall be governed by the laws of the State of California.

Executed on ___________________[date].

______________________ [signature of first prospective spouse]

______________________ [typed name]

______________________ [signature of second prospective spouse]

______________________ [typed name]

ACKNOWLEDGMENT

State of California,

County of ______________________

)

)

)

_ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _

On ___________________ [date] before me, ___________________ [name and title of officer taking acknowledgment], personally appeared ___________________ [names of persons signing instrument], who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: ___________________ (Seal)

___________________ [Name of officer]

EXHIBIT A

ASSETS AND OBLIGATIONS OF ___________________ [name of first prospective spouse]

Assets

[List all assets owned by first prospective spouse, and specify the approximate value of each.]

Obligations

[List all debts, encumbrances, liens, and other obligations against assets listed above or for which first prospective spouse is responsible.]

EXHIBIT B

ASSETS AND OBLIGATIONS OF ___________________ [name of second prospective spouse]

Assets

[List all assets owned by second prospective spouse, and specify the approximate value of each.]

Obligations

[List all debts, encumbrances, liens, and other obligations against property listed above or for which second prospective spouse is responsible.]

EXHIBIT C

[To be executed before execution of Premarital Agreement (parties assumed to be independently represented by counsel).]

Acknowledgment of Property Disclosure and Waiver of Further Disclosure

1. ___________________[Name of first prospective spouse] ___________________ and ___________________[name of second prospective spouse], referred to hereafter as "the parties," hereby acknowledge that, in contemplation of their future marriage and the prospect of entering into a written premarital agreement, they have made a full, fair, and reasonable disclosure to one another of all assets in which either has any known interest and of all financial obligations for which either has any known responsibility.

2. The parties further acknowledge that in view of the above-mentioned disclosure of assets and obligations, each party has a complete and adequate knowledge and understanding of the nature and extent of the property and financial obligations of the other party. Each of the parties, being independently represented by counsel, has received the full and adequate assistance of counsel in determining and understanding the nature and extent of the assets and financial obligations of the other party.

3. Each of the parties is fully satisfied with the above-mentioned disclosure, and has had a reasonable opportunity to make an independent investigation of the assets and financial obligations of the other party, and neither of the parties wishes to obtain any such further disclosure or to make [any or any further] investigation.

4. Each of the parties hereby voluntarily and expressly waives any right to disclosure of the property and financial obligations of the other party beyond the disclosure heretofore made and mentioned above. The foregoing waiver is expressly made with the advice of counsel for each of the parties, and each party acknowledges being informed of the legal effect of such waiver by counsel prior to making the waiver.

5. The parties acknowledge that this instrument has been executed by each of them in the presence of one another and of the respective counsel of each of them, prior in time to the execution of any agreement or other instrument made in contemplation of marriage that pertains to or affects the parties' legal rights.

Executed on ___________________[date].


______________________ [typed name]


______________________ [typed name]

[Add Notarial ACKNOWLEDGMENT (use form of acknowledgment at end of main body of Premarital Agreement, above)]

Approved by:

______________________ [signature]

[typed name]

Attorney for ______________________ [first prospective spouse]

______________________ [signature]

[typed name]

Attorney for ______________________ [second prospective spouse]

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawContract Conditions & ProvisionsGeneral OverviewFamily LawMarital Duties & RightsProperty RightsGeneral OverviewFamily LawMarital Duties & RightsProperty RightsPremarital AgreementsGeneral Overview

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PART IV. FORMS



111.201 Complete Premarital Agreement--Separate Property Owned Before Marriage Will Remain Separate After Marriage

[1] Comment

The form set forth in [2], below, is a complete premarital agreement designed to ensure that the parties' separate property, and all earnings attributable to that property, will retain its character following their marriage [see generally Fam. Code 1612(a)(1) (general right of parties to make premarital contract regarding property interests)]. Generally, property owned by the parties prior to the marriage, and earnings and accumulations of that property, is separate property even without such an agreement [see Fam. Code 770(a)(1), (3); see e.g., In re Marriage of Rossin (2009) 172 Cal. App. 4th 725, 735-740, 91 Cal. Rptr. 3d 427 (disability benefits received under policy purchased with separate property before marriage are separate property)]. However, executing such an agreement may be useful to avoid later misunderstandings regarding the scope of the parties' separate property.

Under this agreement, property acquired by either party during the marriage generally will be community property [Fam. Code 760 (property acquired by married person during marriage while domiciled in California is community property); see In re Marriage of Valli (2014) 58 Cal. 4th 1396, 1399, 1400-1406, 171 Cal. Rptr. 3d 454, 324 P.3d 274 (in absence of formal transmutation pursuant to Fam. Code 850 et seq., life insurance policy acquired with community funds during marriage is community property, even if one spouse is named as sole owner and beneficiary of policy)]. For an agreement that provides for complete separation of the parties' property interests (that is, that property acquired through the parties' efforts after marriage will be separate rather than community property), see the form in 111.200.

For forms of transmutation agreements, see Chapter 112. For a discussion of transmutation of property, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, Ch. 20, Community Property: General Characterization and Division Principles (Matthew Bender 2d ed.).

To help ensure enforceability, this form provides for complete disclosure of each party's assets and obligations [see Fam. Code 1615(a)(2)]. For further discussion of disclosure requirements,, see 111.200[1][d]. In addition, the form assumes that each party is independently represented by counsel. For related discussion of the need for independent counsel by each party, the requirements for a valid waiver of independent counsel, and of a period of seven calendar days between presentment and signing of the agreement, see 111.20[2][d], [f] [see Fam. Code 1615(c)].

[2] FORM

Complete Premarital Agreement--Separate Property Owned Before Marriage Will Remain Separate After Marriage

PREMARITAL AGREEMENT

Parties

1. ___________________[name of prospective spouse], ___________________[address], and ___________________[name of prospective spouse], ___________________[address], in contemplation of their future marriage, now enter into this Premarital Agreement.

Purpose

2. The parties intend to define the property that each of them owns at the time this Agreement is executed and to agree that that property shall remain each party's separate property.

Disclosure of Property Interests

3. (a) Each party has made a full, fair, and reasonable disclosure to the other party of all assets that he or she owns, and all debts, liabilities, or other obligations owed by him or her. A list of all assets owned, and obligations owed, by ___________________[name of first prospective spouse] is set forth in Exhibit A, which is attached to and made a part of this contract. A list of all assets owned, and obligations owed, by ___________________[name of second prospective spouse] is set forth in Exhibit B, which is attached to and made a part of this Agreement.

(b) The parties understand that the figures and amounts set forth in Exhibits A and B are approximately correct and not necessarily exact, and that they reflect the values of the listed property on or about the date of this Agreement.

(c) Each party acknowledges that he or she has read Exhibits A and B, that he or she is entering into this Agreement freely and voluntarily, and that he or she understands the contents of this Agreement.

(d) Each party acknowledges having voluntarily and expressly waived in writing any right to disclosure of the property and financial obligations of the other party beyond the disclosure already provided to date, and that such written waiver was made by an instrument that was executed prior in time to the execution of this Agreement. This waiver is attached hereto as Exhibit C.

Property of Parties

4. (a) Each of the Assets listed in Exhibit A is and shall remain the separate property of ___________________[name of first prospective spouse].

(b) Each of the Assets listed in Exhibit B is and shall remain the separate property of ___________________[name of second prospective spouse].

(c) All income, increases and other accumulations from the Assets listed in Exhibits A and B shall be the separate property of the party who owns that property.

(d) All debts and other liabilities incurred on behalf of the Assets listed in Exhibits A and B shall be the sole responsibility of the party who owns that property.

(e) Each Obligation listed in Exhibits A and B shall remain the separate responsibility of the party who incurred the debt or liability.

Binding Effect

5. This Agreement shall bind and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns.

Integration Clause

6. This Agreement constitutes the entire understanding between the parties concerning the subject matter that it covers. Any oral representations or modifications made prior to or after execution of this Agreement concerning the subject matter of this Agreement shall have no force or effect. However, this Agreement may be subsequently modified by a writing specifically referring to this Agreement and signed by both parties.

Effect of Partial Invalidity

7. If any term, provision, promise, or condition of this Agreement is determined by a court of competent jurisdiction to be invalid, void, or unenforceable, in whole or in part, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

Governing Law

8. This Agreement shall be governed by the laws of the State of California.

Representation by Counsel and Presentment of Agreement

9. Each party acknowledges that he or she has been represented by independent counsel in the negotiation of this Agreement; that counsel representing each party is one of his or her own choosing; and that each party has read this Agreement and understands it. Each party further acknowledges that not less than seven days have elapsed between the time the agreement was presented to each of them [and each was advised to seek independent counsel] and the time this agreement was signed.

Executed on ___________________[date].


[typed name]


[typed name]

ACKNOWLEDGMENT

State of California,

County of ______________________

)

)

)

_ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _

On ___________________ [date] before me, ___________________ [name and title of officer taking acknowledgment], personally appeared ___________________ [names of persons signing instrument], who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: ___________________ (Seal)

___________________ [Name of officer]

EXHIBIT A

ASSETS AND OBLIGATIONS OF ___________________ [name of first prospective spouse]

Assets

[List all assets owned by first prospective spouse, and specify the approximate value of each.]

Obligations

[List all debts, encumbrances, liens, and other obligations against assets listed above or for which first prospective spouse is responsible.]

EXHIBIT B

ASSETS AND OBLIGATIONS OF ___________________ [name of second prospective spouse]

Assets

[List all assets owned by second prospective spouse, and specify the approximate value of each.]

Obligations

[List all debts, encumbrances, liens, and other obligations against property listed above or for which second prospective spouse is responsible.]

EXHIBIT C

[To be executed before execution of Premarital Agreement (parties assumed to be independently represented by counsel).]

Acknowledgment of Property Disclosure and Waiver of Further Disclosure

1. ___________________[Name of first prospective spouse] ___________________ and ___________________[name of second prospective spouse], referred to hereafter as "the parties," hereby acknowledge that, in contemplation of their future marriage and the prospect of entering into a written premarital agreement, they have made a full, fair, and reasonable disclosure to one another of all assets in which either has any known interest and of all financial obligations for which either has any known responsibility.

2. The parties further acknowledge that in view of the above-mentioned disclosure of assets and obligations, each party has a complete and adequate knowledge and understanding of the nature and extent of the property and financial obligations of the other party. Each of the parties, being independently represented by counsel, has received the full and adequate assistance of counsel in determining and understanding the nature and extent of the assets and financial obligations of the other party.

3. Each of the parties is fully satisfied with the above-mentioned disclosure, and has had a reasonable opportunity to make an independent investigation of the assets and financial obligations of the other party, and neither of the parties wishes to obtain any such further disclosure or to make [any or any further] investigation.

4. Each of the parties hereby voluntarily and expressly waives any right to disclosure of the property and financial obligations of the other party beyond the disclosure heretofore made and mentioned above. The foregoing waiver is expressly made with the advice of counsel for each of the parties, and each party acknowledges being informed of the legal effect of such waiver by counsel prior to making the waiver.

5. The parties acknowledge that this instrument has been executed by each of them in the presence of one another and of the respective counsel of each of them, prior in time to the execution of any agreement or other instrument made in contemplation of marriage that pertains to or affects the parties' legal rights.

Executed on ___________________[date].


[typed name]


[typed name]

[Add Notarial ACKNOWLEDGMENT (use form of acknowledgment at end of main body of Premarital Agreement, above) ]

Approved by:

______________________ [signature]

[typed name]

Attorney for ______________________ [first prospective spouse]

______________________ [signature]

[typed name]

Attorney for ______________________ [second prospective spouse]

Legal Topics:


Contracts LawContract Conditions & ProvisionsGeneral OverviewFamily LawMarital Duties & RightsProperty RightsCharacterizationGeneral OverviewFamily LawMarital Duties & RightsProperty RightsCharacterizationSeparate PropertyFamily LawMarital Duties & RightsProperty RightsPremarital AgreementsGeneral Overview

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33-111.202 California Legal Forms--Transaction Guide 111.202-111.209

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PART IV. FORMS



[Reserved]

111.202[Reserved]

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PART IV. FORMS

B. Provisions Regarding Property


111.210 Provision That Parties' Separate Assets Will Become Community Assets

[1] Comment

The form set forth in [2], below, is a provision under which prospective spouses agree that all property owned by the parties that would otherwise be the separate property of either spouse [See Fam. Code 770-772 (what constitutes separate property); see also Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed.), Ch. 20, Community Property: General Characterization and Division Principles (Matthew Bender] will instead be their community property [see Fam. Code 760 (general definition of community property); see generally Fam. Code 1612(a)(1) (general right of parties to make premarital agreement regarding property rights)]. If the parties wish to exempt any items of separate property from the operation of this provision, the optional bracketed language should be included.

The provision is for insertion in a premarital agreement. If the form of complete premarital agreement set forth in 111.200 [2] is used, this provision would be substituted for Paragraph 5 of that form. In that event, appropriate modifications would need to be made to Paragraph 2 (purpose clause) to indicate that the parties wish to transmute their separate property into community property. Paragraph 6 (release of rights in separate property) should also be omitted from that form if this paragraph is used.

A provision in a premarital agreement to the effect that some or all separate property owned by either or both spouses will become community property on marriage is valid and enforceable [see Woods v. Security-First Nat. Bank (1956) 46 Cal. 2d 697, 703, 299 P.2d 657] .

Prospective spouses who wish to change their separate property to community property must be fully advised of the practical consequences of their choice. For example, the affected property will be subject to attachment by creditors of either spouse for amounts due on contracts made after marriage [see Fam. Code 910, 911]. The property will also be subject to execution by a judgment creditor for the torts of either spouse [see Fam. Code 1000].

Any personal property affected by this form will be under the joint management and control of both spouses after marriage, and neither will be able to effectively convey the property, other than for fair and reasonable value, without the written consent of the other [see Fam. Code 1100(a), (b)]. If the affected property consists of real estate, both spouses ordinarily must join in any conveyance or encumbrance of that property, with limited exceptions [see Fam. Code 1102]. For full discussion of management and control of community property, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed., Ch. 24, Management and Control of Property (Matthew Bender).

Each party will become the one-half owner of all affected property and will inherit the entire amount of that property if the other party dies intestate [see Prob. Code 6400, 6401(a), 6414(a)]. If the transferee spouse is survived by the transferor spouse, half of the affected property will be included in the decedent's estate for estate tax purposes [see I.R.C. 2040]. For discussion of intestate succession rules regarding community and separate property, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed., Ch. 25, Succession to Marital Property (Matthew Bender). For a detailed discussion of estate taxation, see California Probate Practice, Ch. 15, Taxation of Estates (Matthew Bender), and California Wills and Trusts, Ch. 2, Overview of Taxation Affecting the Disposition of Estates (Matthew Bender).

[2] FORM

Provision That Parties' Separate Assets Will Become Community Assets

All Assets of Spouses to Be Community Property

[(a)] [Except as provided in subparagraph (b),] [A]ll property, rents, profits, and increases of whatever nature held by ___________________[name of first prospective spouse] or _________________ [name of second prospective spouse] on the date of their contemplated marriage and standing of record in the name of either party, and all property that may be acquired by either of them during their contemplated marriage, of any nature and from any source shall be their community property.

[Add if appropriate, and conform preceding paragraph: (b) Notwithstanding subparagraph (a), the following asset(s) shall ___________________ (be or remain) the separate property of ___________________ (name of owner-spouse or the party who acquired the asset): ___________________ (specify excluded asset or type of asset, e.g., if the parties separate, any earnings or income of either party derived from any employment or services rendered after the date of separation, and any asset acquired with such earnings or income).]

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PART IV. FORMS



111.211 Provision That Income Derived From Parties' Separate Assets Will Become Community Property, With Separate Corpus Unchanged

[1] Comment

The form set forth in [2], below, is a provision making the income and accumulations from the separate property of either spouse (which would otherwise also be separate property) [see Fam. Code 770(a)(3); see generally Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed. (Matthew Bender), Ch. 20, Community Property: General Characterization and Division Principles ] the community property of both spouses following their marriage, but leaving the character of the separate property corpus unchanged [see generally Fam. Code 1612(a)(1) (general right of parties to make premarital agreement regarding property interests)]. This form is designed to be used by parties who wish to maintain intact the corpus of the property each acquires but who wish to share the returns produced by that property.

Although the form set forth in [2], below, changes the character of future income generated by separate property, it is not subject to the statutory requirements for transmutation agreements, since those requirements apply only to transmutation agreements made during marriage [see Fam. Code 850 (transmutation agreements between "married persons" are subject to requirements of Fam. Code 851-853); see In re Marriage of Benson (2005) 36 Cal. 4th 1096, 1110-1111, 32 Cal. Rptr. 3d 471, 481-482, 116 P.3d 1152 ("[p]remarital contracts are not construed and enforced under the same standards as interspousal agreements.")]. Nevertheless, to ensure that both parties fully understand the consequences of their premarital agreement, this form includes a provision that would be required in a transmutation agreement: an express statement that the characterization of future income from separate property will be changed [see Fam. Code 852(a); In re Marriage of Benson (2005) 36 Cal. 4th 1096, 1106-1111, 32 Cal. Rptr. 3d 471, 478-482, 116 P.3d 1152 (spouses cannot accomplish transmutation in absence of written declaration expressly changing character of property); In re Estate of MacDonald (1990) 51 Cal. 3d 262, 267-268, 272-273, 272 Cal. Rptr. 153, 794 P.2d 911 (spouses' transmutation agreement must expressly state that characterization or ownership of property is being changed); In re Marriage of Leni (2006) 144 Cal. App. 4th 1087, 1095-1096, 50 Cal. Rptr. 3d 886 (escrow instruction that proceeds of sale of residence "be split 50/50" does not transmute proceeds from community to separate property, because it does not include express declaration that character of property is being changed)]. For discussion of the requirements for interspousal transmutation agreements, see Ch. 112, Postnuptial Agreements .

This provision is for insertion in a premarital agreement. If inserted in the form set forth in 111.201[2], it should be substituted for Paragraph 4(c) of that form and appropriate modifications should be made to Paragraph 2 (purpose clause).

[2] FORM

Provision That Income Derived From Parties' Separate Assets Will Become Community Property, With Separate Corpus Unchanged

Income From Separate Property

The net rents, profits, and other income from the parties' separate property Assets, which are listed in Exhibits A and B, and the net proceeds from the sale of any of those Assets, shall be held and owned as the community property of the parties for the duration of their marriage. The parties expressly agree that this provision changes the character of such net rents, profits, income, and sale proceeds from each party's separate property to community property.

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111.212 Provision for Transfer of Property Immediately After Marriage

[1] Comment

The form set forth in [2], below, is a provision for the immediate transfer of property from one prospective spouse to the other after their marriage has taken place. This form contains four alternative provisions, all covering different types of property transfers. The first covers lump sum cash payments. The second covers transfers of real property. The third covers the transfer of fully paid life insurance policies. The fourth covers transfer of securities.

The form is for inclusion in a premarital agreement. If desired by the parties, one or more of the alternative provisions may be added to the premarital agreement form in 111.200 or 111.201.

It is important that the prospective spouses be fully advised of the potential tax consequences attending a transfer of property between them. Whether a transaction will be a taxable sale or exchange, or a gift, is an important consideration for the parties. Unless counsel has sufficient expertise in tax matters to advise the parties, counsel should refer the parties to a CPA, tax attorney, or other tax specialist for advice on the specific tax consequences of the proposed transfer.

For federal income tax purposes, no gain or loss is generally recognized on a transfer of property between spouses [I.R.C. 1041(a)]. In addition, unlimited amounts of property, other than certain terminable interests, can be transferred between spouses without federal gift tax consequences [see I.R.C. 2523(a)].

By contrast, premarital transfers, even those made pursuant to an agreement in contemplation of marriage, do not qualify for the marital gift tax deduction, even if the donor and donee subsequently marry in the same calendar year as the transfer [see generally I.R.C. 2523(a)(1); Treas. Reg. 25.2523(a)-1(a); Rev. Rul. 69-347, 1969-1 C.B. 227 ]. Furthermore, to the extent that the transfer does not qualify as a gift, the gain on the sale may be subject to income taxation [see generally I.R.C. 61(a)(3), 1001 et seq.]. Thus, if a lump-sum transfer of property from one intended spouse to the other is contemplated, it is advisable to provide that the actual transfer will occur after the marriage.

A gift to be made in the future pursuant to a premarital agreement is, for tax purposes, complete on the date of the marriage (provided that the gift may be valued at that time) because it is on the date of marriage that the donor's obligation becomes enforceable [see Rev. Rul. 69-347, 1969-1 C.B. 227 ].

This form requires the transferor to make the transfer of property after the marriage has occurred. If the transferor fails to make the transfer, the transferee may seek specific enforcement of this contractual provision because he or she would have a valid contractual basis on which to proceed. A premarital agreement requiring a premarital transfer of property would probably be unenforceable because a premarital contract does not become effective until the marriage of the parties [see Fam. Code 1613]. If a transfer of property in contemplation of marriage precedes the actual marriage, and the marriage does not take place, the transferor may not be able to recover possession of the transferred property [see Estate of Smith (1936) 15 Cal. App. 2d 548, 550-551, 59 P.2d 854] .

[2] FORM

Provision for Transfer of Property Immediately After Marriage

Transfer of Property on Marriage

[Choose from the following provisions as appropriate:]

Within _________________ [specify period, e.g., 30 days] after the date of the parties' marriage, ___________________[name of first prospective spouse] shall pay to ___________________[name of second prospective spouse] the sum of $____________________, which amount shall thereafter be the sole and separate property of ___________________[name of second prospective spouse].

[AND/OR]

Within _________________ [specify period, e.g., 30 days] after the date of the parties' marriage, ___________________[name of first prospective spouse] shall deliver to ___________________[name of second prospective spouse] an Interspousal Transfer Deed for the real property located at ___________________[address], City of ___________________, State of ___________________. Before executing and delivering the Interspousal Transfer Deed required under the provisions of this paragraph, ___________________[name of first prospective spouse] shall obtain and deliver to ___________________[name of second prospective spouse], a policy of title insurance on the property to be transferred. All expenses incurred in obtaining the title insurance policy and executing the Interspousal Transfer Deed shall be the responsibility of ___________________[name of first prospective spouse].

[AND/OR]

Within _________________ [specify period, e.g., 30 days] after the date of the parties' marriage, ___________________[name of first prospective spouse] shall deliver to ___________________[name of second prospective spouse] fully paid-up policies of [specify type of life insurance, e.g., whole] life insurance on the life of ___________________[name of first prospective spouse] in a total face amount of not less than $_______ [specify] and naming ___________________[name of second prospective spouse] as the irrevocable beneficiary and owner of all rights under those policies.

[AND/OR]

Within _________________ [specify period, e.g., 30 days] after the date of the parties' marriage, ___________________[name of first prospective spouse] shall deliver to ___________________[name of second prospective spouse], free of any claims or liens, the following securities: ___________________[list name of security, number of shares and specify whether they are common, preferred, or convertible preferred]. ___________________[Name of first prospective spouse] shall be responsible for satisfying all requirements of the transfer agents for, and assuming all expenses related to the transfer of, the specified securities.

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111.213 Provision Granting One Party Exclusive Management and Control of Community Property

[1] Comment

The form set forth in [2], below, is a provision for a premarital agreement that gives one spouse the exclusive right to manage and control the community property of the spouses [see generally Fam. Code 1612(a)(2) (general right of parties to make premarital agreement regarding management and control of property)]. The form contains an acknowledgment by the relinquishing spouse that he or she is informed concerning his or her right to equal management and control of the community property [see Fam. Code 1100(a), 1102(a); see also Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed. (Matthew Bender), Ch. 24, Management and Control of Property ], but is voluntarily relinquishing this right, except as specified.

As a general rule, the spouses have an equal right to manage and control community personal property [see Fam. Code 1100(a)] and community real property [see Fam. Code 1102(a)]. For community personal property, this right is subject to exceptions that require one spouse to obtain the other's written consent or to give that other spouse notice before entering into certain transactions [see Fam. Code 1100(b), (c), (d)]. For community real property, the right to management and control is limited by the requirement that both spouses must, either personally or by duly authorized agent, join in executing any instrument by which the community real property is leased (for a period longer than one year), sold, conveyed, or encumbered [Fam. Code 1102(a)].

By executing this agreement, the relinquishing spouse gives up all rights to management and control of the community property that he or she would otherwise have by law. The one exception provided for in this agreement is a provision that requires the managing spouse to obtain the other spouse's written consent before selling or encumbering the community household's furniture or furnishings or the clothing of the nonmanaging spouse or of the parties' children [see Fam. Code 1100(c)].

In exercising the right of management and control, the managing spouse is subject to the fiduciary duty that exists by law for transactions between spouses [see Fam. Code 721(b), 1100(e)]. In transactions between a husband and wife, each is 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 prohibits either from taking any unfair advantage of the other [Fam. Code 721(b); see In re Marriage of Burkle (2006) 139 Cal. App. 4th 712, 730-736, 43 Cal. Rptr. 3d 181 (Fam. Code 721(b) prohibits taking of unfair advantage but does not prohibit transaction in which benefits or advantages are obtained by both spouses and neither gains unfair advantage)]. The relationship is a fiduciary relationship subject to certain rights and duties that apply to nonmarital business partners [Fam. Code 721(b) (legislatively abrogating holding of In re Marriage of Duffy (2001) 91 Cal. App. 4th 923, 111 Cal. Rptr. 2d 160 , to extent in conflict with accompanying statement of legislative intent in Stats. 2002, ch. 310, 2); see Corp. Code 16403, 16404, 16503]. Thus, for example, a spouse must (1) provide the other spouse access to any books kept regarding a transaction for the purposes of inspection and copying [Fam. Code 721(b)(1); see Corp. Code 16403]; (2) render, on request, true and full information of all things affecting any transaction that concerns the community property [Fam. Code 721(b)(2); see Corp. Code 16403(c)(1); see also In re Marriage of Walker (2006) 138 Cal. App. 4th 1408, 1427, 42 Cal. Rptr. 3d 325 (Corp. Code 16403(c)(1), which is incorporated by reference in Fam. Code 721(b), requires partners to disclose to each other without demand any information concerning partnership's business and affairs reasonably required for proper exercise of partner's rights and duties)]; and (3) account to the other spouse, and hold as a trustee, any benefit or profit derived from any transaction made without the consent of the other spouse that concerns the community property [Fam. Code 721(b)(3); see Corp. Code 16404]. However, the Family Code's imposition of these duties of business partners does not broaden the spouses' duties and obligations to include those of corporate officers and directors beyond providing access, information, and an accounting [ In re Marriage of Leni (2006) 144 Cal. App. 4th 1087, 1092-1094, 50 Cal. Rptr. 3d 886] . For a detailed discussion of fiduciary duties between spouses concerning the management and control of community property and other financial dealings, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed. (Matthew Bender), Ch. 24, Management and Control of Property .

[2] FORM

Provision Granting One Party Exclusive Management and Control of Community Property

Management and Control of Property

(a) ___________________[Name of first prospective spouse] shall have the right of exclusive management and control of all community real and personal property that the parties acquire during their marriage. In exercising this right, ___________________[name of first prospective spouse] shall at all times be subject to and abide by the rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other, as provided by law.

(b) ___________________[Name of first prospective spouse] shall provide ___________________[name of second prospective spouse] with reasonable use of and access to community funds.

(c) ___________________[Name of second prospective spouse] acknowledges that but for the terms of this Agreement, ___________________[he or she] and ___________________[name of first prospective spouse] would share equally in the management and control of all community property acquired during their marriage. ___________________[Name of second prospective spouse] further acknowledges that ___________________[he or she] has voluntarily agreed to the exclusive management and control of the parties' community property by ___________________[name of first prospective spouse]. ___________________[Name of second prospective spouse] shall, on the request of ___________________[name of first prospective spouse], take any and all steps and execute, acknowledge, and deliver to ___________________[name of first prospective spouse] any and all instruments necessary or expedient to effectuate the purpose of this Agreement.

(d) Nothing in this Agreement shall be deemed to alter any requirements of law concerning the joint conveyancing or prior written consents required for conveyancing of community personal property used as the parties' family dwelling, or consisting of the furniture, furnishings, or fittings of the parties' home, or the clothing or wearing apparel of ___________________[name of second prospective spouse] or of any minor children of the parties.

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PART IV. FORMS



111.214 Waiver of Reimbursement for Separate Property Contributions to Acquisition of Community Property

[1] Comment

The form set forth in [2], below, is a mutual waiver of the right to reimbursement for separate property contributions to the acquisition of community property in proceedings for marital dissolution or legal separation [see Fam. Code 2640(b)]. It may be included in a premarital agreement between parties who anticipate the purchase of property toward which either or both will contribute separate property funds, and who wish to provide for the possible disposition of such property on dissolution or legal separation [see generally Fam. Code 1612(a)(3) (parties' general right to make premarital agreement regarding disposition of property on dissolution or legal separation)]. For a form of mutual waiver of the right to reimbursement for separate property contributions to the acquisition of the other party's separate property, see 111.215.

In proceedings to divide the community estate, unless a party has made a written waiver of the right to reimbursement or signed a writing that has the effect of a waiver, that party is entitled to reimbursement for his or her contributions to the acquisition of community property to the extent that he or she traces the contribution to a separate property source. The party is not entitled to receive interest or any adjustment for changes in monetary values, or to receive reimbursement in excess of the net value of the property at the time it is divided. "Contributions to the acquisition of the property" includes down payments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of property. It does not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property [Fam. Code 2640(a)]. Further, the payment of community credit-card debt to enable the parties to qualify for a loan to purchase property is not a reimbursable "contribution to the acquisition of property" [ In re Marriage of Sparks (2003) 104 Cal. App. 4th 289, 292-297, 127 Cal. Rptr. 2d 882] . For further discussion of reimbursement rights, see Kirkland, Lurvey, Richmond and Wagner, California Family Law Practice and Procedure, 2nd ed. (Matthew Bender), Ch. 20, Community Property: General Characterization and Division Principles and Ch. 23, Debt Liability and Division and Related Reimbursement Issues .

[2] FORM

Waiver of Reimbursement for Separate Property Contributions to Acquisition of Community Property

Waiver of Right to Reimbursement for Separate Property Contributions

Neither party shall have the right to reimbursement for any contributions made from his or her separate property toward the acquisition of community property, as defined in Family Code Section 2640, and each party expressly waives any such right of reimbursement.

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PART IV. FORMS



111.215 Waiver of Reimbursement for Separate Property Contributions to Acquisition of Other's Separate Property

[1] Comment

The form set forth in [2], below, is a mutual waiver of the right to reimbursement for separate property contributions to the acquisition of the other spouse's separate property [see Fam. Code 2640(c)]. It may be included in a premarital agreement between parties who anticipate the contribution of either's separate property toward the purchase of assets that will be the other's separate property. For a form of mutual waiver of the right to reimbursement for separate property contributions to the acquisition of community property, see 111.214.

In dissolution proceedings, a spouse who has contributed his or her separate property to the acquisition of the other spouse's separate property during the marriage must be reimbursed for that contribution unless there has been a transmutation in writing [see Fam. Code 850 et seq.; see also Ch. 112, Postnuptial Agreements ] or a written waiver of the right to reimbursement [Fam. Code 2640(c)]. Unless otherwise agreed in writing, the amount reimbursed is to be without interest or adjustment for a change in monetary values and may not exceed the net value of the acquired property at the time of the property division [Fam. Code 2640(c)].

[2] FORM

Waiver of Right to Reimbursement for Separate Property Contributions

Neither party shall have the right to reimbursement for any contributions made from his or her separate property toward the acquisition of the other's separate property, as defined in Family Code Section 2640, and each party expressly waives any such right of reimbursement.

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[Reserved]

111.216[Reserved]

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PART IV. FORMS

C. Provisions Regarding Maintenance and Support


111.224 Provision Requiring One Party to Purchase Life Insurance in Favor of Other Party

[1] Comment

The form set forth in [2], below, is a provision for a premarital agreement requiring one prospective spouse to purchase insurance on his or her life, naming the other prospective spouse as the beneficiary of that insurance [see generally Fam. Code 1612(a)(5) (general right of parties to make premarital agreement regarding ownership rights in and disposition of death benefit from a life insurance policy)]. For a provision that requires one prospective spouse to change the beneficiary under an existing life insurance policy, see the form in 111.225.

If the decedent does not direct otherwise and if the proceeds of a life insurance policy are includable in the decedent's gross estate, the beneficiary is liable to the executor of the insured's estate for the estate tax attributable to his or her share of the proceeds [see I.R.C. 2206]. Optional subparagraph (c) requires the party purchasing the insurance to include a provision in his or her will providing that the beneficiary party will not be liable to the insured's estate for any estate tax on the proceeds.

[2] FORM

Provision Requiring One Party to Purchase Life Insurance in Favor of Other Party

Life Insurance

(a) ___________________[Name of first prospective spouse] shall purchase policies of [specify type of life insurance, e.g., whole] life insurance on ___________________[his or her] life in the face amount of $____________________ within [specify period, e.g., 30 days] after the marriage of the parties, and shall designate ___________________[name of second prospective spouse] as the irrevocable primary beneficiary of those policies. ___________________[Name of first prospective spouse] shall have the right to name alternate beneficiaries in the event that he/she survives the primary beneficiary.

(b) ___________________[Name of first prospective spouse] shall continue pay all premiums and comply with any other requirements necessary keep the insurance policies on ___________________[his or her] life in full force and effect as long as the parties remain married to one another and shall not encumber the policies in any way during their marriage without the express written permission of ___________________[name of second prospective spouse].

[Add if desired: (c) The proceeds payable to ___________________ (name of second prospective spouse) as the beneficiary of the policies specified in this paragraph shall be free from all estate, succession, or any other death tax, and ___________________ (name of first prospective spouse) shall include a provision to this effect in ___________________ (his or her) will.]

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PART IV. FORMS

C. Provisions Regarding Maintenance and Support


111.225 Provision Requiring One Party to Change Life Insurance Policy Beneficiary in Favor of Other Party

[1] Comment

The form set forth in [2], below, is a provision for a premarital agreement by which a prospective spouse agrees to change the beneficiary under an existing life insurance policy [see generally Fam. Code 1612(a)(5) (general right of parties to make premarital agreement regarding ownership rights in and disposition of death benefit from a life insurance policy)]. For a provision requiring a prospective spouse to obtain a new life insurance policy naming the other prospective spouse as beneficiary, see the form in 111.224.

If the insured spouse transfers ownership of the life insurance policy to his or her prospective spouse prior to the marriage, that transfer constitutes a gift for federal gift tax purposes [see Treas. Reg. 25.2512-6]. However, transfers made during marriage are protected from tax under the federal gift tax marital deduction [see I.R.C. 2523].

If the decedent does not direct otherwise and if the proceeds of a life insurance policy are includable in the decedent's gross estate, the beneficiary is liable to the executor of the insured's estate for the estate tax attributable to his or her share of the proceeds [I.R.C. 2206]. Optional subparagraph (b) requires the insured party to include a provision in his or her will providing that the beneficiary party will not be liable to the insured's estate for any estate tax on the proceeds.

[2] FORM

Provision Requiring One Party to Change Life Insurance Policy Beneficiary in Favor of Other Party

Life Insurance

[(a)] ___________________[Name of insured prospective spouse] shall, within [specify period, e.g., 30 days] after the parties' marriage, change the primary beneficiary of any policies of insurance on ___________________[his or her] life and shall designate ___________________[name of prospective beneficiary spouse] as the irrevocable and primary beneficiary of the following life insurance policies: ___________________[list name of insurers, policy numbers, types of policies, and face amounts of each].

[Add if desired: (b) The proceeds payable to ___________________ (name of prospective beneficiary spouse) as the beneficiary of the policies specified in this paragraph shall be free from all estate, succession, or any other death tax, and ___________________ (name of insured prospective spouse) shall include a provision to this effect in ___________________ (his or her) will.]

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PART IV. FORMS

D. Miscellaneous Provisions


111.240 Provision for Private Annex to Premarital Agreement

[1] Comment

The form in [2], below, is a private annex to a premarital agreement. It is designed to be used when parties have made some agreement regarding real property that is to be recorded [see Fam. Code 1502], but the parties do not wish other terms of that agreement that do not affect realty to be made a matter of public record.

[2] FORM

Provision for Private Annex to Premarital Agreement

ANNEX TO PREMARITAL AGREEMENT

___________________[Name of prospective spouse], ___________________[address], and ___________________[name of prospective spouse], ___________________[address], who have entered into a premarital agreement dated ___________________, agree as follows:

Purpose

1. The premarital agreement described above was recorded in ___________________ County, California, because its terms granted an interest in real property situated there. The parties prefer that the following terms be kept private between themselves and that they not appear in the public records of any county. The following terms are a part of the premarital agreement between the parties, which is attached to this annex as Exhibit A.

[Specify terms of agreement between parties that they wish to keep private.]

EXHIBIT A

[Attach copy of recorded premarital agreement.]

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cal legal forms chapter 111. premarital agreements

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