Articles Posted in Premarital Agreements

A New York appeals court is making waves throughout the family law community as a result of its recent controversial ruling. Before Elizabeth Cioffi-Petrakis and Peter Petrakis got married, they entered into a premarital agreement, commonly known as a “prenup”. At trial, the court ruled that the premarital agreement was void. On appeal, the trial court’s decision was upheld. Many attorneys throughout the U.S. believe that this case may have enormous implications on every premarital agreement case in the future. Divorce attorneys are surprised that the premarital agreement was held void and by the court’s rationale.The basis for voiding the premarital agreement in the divorce proceeding was “fraud in the inducement.” Just four days before her wedding to Mr. Petrakis, Ms. Cioffi was presented with a prenup and an ultimatum. Although Ms. Cioffi’s parents had already spent $40,000 on the wedding, Mr. Petrakis told Ms. Cioffi that he would not marry her unless she signed the agreement. Moreover, Mr. Petrakis orally promised to tear up the agreement and put her name on title to their home as soon as the couple had children. In reliance on Mr. Petrakis’ oral assurances, Ms. Cioffi signed the prenup. Once the couple had children, Ms. Cioffi pushed Mr. Petrakis to follow through with their oral agreement and he refused.

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At the time Ms. Cioffi signed the prenup she was represented by an attorney and all other typical enforceability requirements were undisputedly met. The written agreement also contained a provision specifically stating that both parties were precluded from relying on all prior or contemporaneous oral agreements. Notwithstanding that provision, both courts ruled that the premarital agreement void by applying the contract principal of fraud.

In Del Mar and across California, if both parties are represented by counsel from the onset of negotiations, there is no required waiting period that must pass before the parties can sign an enforceable premarital agreement. However, if only one party is represented by counsel, the unrepresented party must consider the agreement for a minimum of seven days before signing it. As long as these and the additional statutory requirements are met, many family law attorneys feel that premarital agreements are extremely difficult to set aside.

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In a 1938 California case, the court determined fraud is an appropriate basis for setting aside a post-marital agreement. It would seem that New York was not too far off the mark when it applied the generally accepted contract defense of fraud to family law. More and more, divorce lawyers are seeing the stricter standards applied to civil litigation at large are being applied in family courts.
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In the past few years internet dating and the concept of online love connections has exploded. It has become increasingly more socially acceptable to find a mate online than when the concept first arose with the invention of the internet. Recently a new trend has emerged: internet marriages.

The idea that a marriage can occur without the physical presence of one spouse is not so new and trendy. A proxy marriage is a legal ceremony which occurs when one (or both) spouses are not physically present. If both spouses are not present, the wedding is called a “double proxy wedding”. Usually a “stand in” will be present in the absent spouse’s place. Generally, proxy marriages are not legally recognized throughout the United States except in limited circumstances such as for military personnel. In Del Mar, the courts recognize proxy marriage as valid in certain circumstances. California is in the minority of states in this respect.

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While proxy marriages were traditionally entered into mainly by active duty military, they are now being used between people who met online and may have never seen each other in person. Weddings are literally being conducted over the internet through services such as Skype and Google Hangout. The purpose of requiring both parties to be present and to conduct a ceremony in the presence of a witness is to ensure the voluntariness of the marriage. The main concerns of the states which do not allow proxy marriages include: facilitation of fraud by those attempting to gain U.S. citizenship and the possibility that they will be used by human traffickers to bring women into the U.S. Although individuals are generally interviewed when they apply for citizenship and questioned about the details of their wedding, the Times reports that officials working for Homeland Security and the State Department do not specifically ask if the wedding occurred by proxy.

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Although many stats disallow proxy marriages, generally every state recognizes marriages legally conducted abroad. This means that if two parties legally marry in a foreign jurisdiction in accordance with that jurisdiction’s laws, their marriage is generally recognized in any state. The recognition of marriages legally conducted abroad is being used as a loophole to circumvent the restrictions on proxy marriages. As divorce lawyers are aware, if a proxy marriage occurs pursuant to the marriage laws of a foreign country and that country recognizes the legality of proxy marriages, the proxy marriage will be legally recognized in any state.
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If you have as much money as Tiger Woods, maybe it can buy you love. After a massive cheating scandal broke in late 2009, Elin Nordegren filed for divorce from her successful golf star husband, Tiger Woods. In a record-breaking settlement, Nordegren walked away from her marriage with $750 million. In return for her cash pay-out, Nordegren agreed to never publicly speak out about Woods’ affairs with over twenty different women. Despite their incredibly public divorce, just over two years after the couple reached a global settlement, Woods’ again proposed marriage to Nordegren.Apparently Woods is not satisfied with his not-so-new found single lifestyle. His friends say he is incredibly unhappy without his family and has not managed to hold a steady girlfriend since Nordegren. Although Woods has dated several other models since his divorce, he hasn’t recovered from his split with Nordegren. On or around Christmas 2012, Woods got down on one knee, presented her with a ring, and “re-proposed” to his former wife. Nordegren is considering Woods’ proposal, but only on the condition that he agree to include a $350 million anti-cheating clause in their prenuptial agreement. Reportedly, Woods has no problem agreeing to Nordegren’s condition despite the fact that his accountants think he is crazy. Woods is ready to sign on the dotted line, set a wedding date, and return back to his former married life.

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California is a “no fault” state. This means that in a San Diego divorce proceeding infidelity is irrelevant when dividing assets and debts, setting spousal and/or child support, and determining custody and visitation rights of the parties. Despite this default rule, parties have the ability to agree to abide by different rules. As in the Woods-Nordegren reconciliation, parties can agree to put an “anti-cheating” provision in a premarital agreement. Under such a provision, a spouse would be punished if he or she was unfaithful during marriage. If no such provision existed, neither party could be punished by the courts for infidelity. There are strict rules that a divorce attorney must follow when drafting any agreement, especially a premarital agreement, in order to have it enforceable by the courts. It is important to contact an experienced family law attorney to draft any contracts between spouses.

Another Housewife is getting divorced. Bethenny Frankel, creator of the Skinnygirl franchise, is divorcing her Husband Jason Hoppy after only two years of marriage. For months Frankel has been fighting rumors that the couple is splitting but she has finally confirmed that a divorce is on the horizon. Frankel released the following statement regarding the divorce, “It brings me great sadness to say that Jason and I are separating. This was an extremely difficult decision that as a woman and a mother, I have to accept as the best choice for our family.”In 2008, Frankel agreed to join the cast of Bravo’s The Real Housewives of New York. At that time, only four short years ago, Frankel had a “mere” $8,000 in her bank account. To Frankel, The Real Housewives was an opportunity for her to build her own brand and advertise her Skinnygirl line of alcoholic beverages. It seems as if her plan worked because currently Skinnygirl is the number one fastest growing spirit in the United States. In addition, Frankel is now also a best selling author with her own skin, clothing and health products. Further, Frankel received a $40,000 check for each episode of her reality show. Considering the size and diversification of Frankel’s fortune, the first question surrounding her divorce is whether she will have to split everything with her husband. Because the Frankel and Hoppy signed an enforceable premarital agreement, all of Frankel’s empire should be safe from division.

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A premarital agreement is an important tool that can be used to protect assets of ambitious entrepreneurs. As a default rule, under California community property laws, any earnings or accumulations of a spouse during marriage is community property. Thus, one of the main functions of a premarital agreement is to alter that default rule and order that any earnings or accumulations of a spouse during marriage remain that spouse’s separate property.

The divorce proceedings between reality star Kim Kardashian and athlete Kris Humphries have by far exceed the length of the couple’s 72-day marriage. Recently, Kardashian’s new boyfriend, rapper Kanye West, was deposed by Kris Humphries’ lawyers. During a deposition, the deponent must answer a series of questions while under oath. This means that any lie told during a deposition may constitute perjury. Humphries’ deposition of West may have been an attempt to invalidate his premarital agreement. Many speculate that the premarital agreement contained an infidelity clause and that Humphries is attempting to show Kardashian violated it by starting a relationship with West before the date of separation.

In response, Kardashian’s lawyers argue that Humphries’ postponed arguments to invalidate the straightforward premarital agreement is simply a delay tactic to draw out the divorce proceeding. Despite Humphries’ alleged attempts to extend his litigation with Kardashian, the judge assigned to the case has set a trial date. The former couple will appear on February 15, 2013 and argue their case before the court. As long as the trial date is not pushed further back by Humphries’ legal team, Kim Kardashian should finally get a resolution to her second marriage.Common Family Law Terms Learn more about family law

Depositions are a common form of discovery in family law proceedings. Discovery is the process in which the parties can formally ask each other for documents and information in order to gather all relevant facts in the case. Although expensive, depositions can provide attorneys an opportunity to ask the parties and/or other witnesses for the information needed to proceed to trial or to negotiate settlement. Other forms of discovery such as special interrogatories are available to ask parties questions under oath. However, special interrogatories can be less effective than deposing a party because the lawyer is only permitted to ask follow-up questions after receiving a response. This question and answer process can continue for months because each party is entitled to 30 days to respond to interrogatories.

America has waited on the edge of its seat for Jennifer Aniston to find true love ever since her divorce from Hollywood bombshell Brad Pitt in 2005. This August Aniston announced her engagement to boyfriend Justin Theroux. The couple met while filming their recent comedy “Wanderlust.” Because Aniston has obviously been husband shopping since her previous divorce, the engagement was not a big surprise. However, the media was shocked to learn that Aniston refused to consider a premarital agreement.

Advisors reportedly insisted that Aniston sign a premarital agreement in order to protect her current fortune worth an estimated $150 million and her future earnings. Aniston continues to star in successful films and is still collecting millions. According to a source close to the star, “Jen is a hopeless romantic, so money is the last thing on her mind now. The way she sees it, Justin is her soul mate, and she trusts him implicitly with every aspect of her life – including her finances.” This decision has made Aniston’s friends and family a bit nervous but she insists she is madly in love and that this marriage will last an eternity.

Child superstar Miley Cyrus recently got engaged to fellow actor Liam Hemsworth.  

The couple first met in 2009 on the set of the film The Last Song. Although their relationship has been a bit rocky, Cyrus, 19, and Hemsworth, 22, agreed it was time to get married. Much of the recent media attention has been critical of the pending nuptials for the young couple. The main argument against the marriage is that Cyrus is not old enough to make such a commitment. Newly engaged couples are eternally optimistic and excited for the future; however, much talk is already surrounding a potential Cyrus-Hemsworth divorce.

In New York, a man is suing his ex-fiancé for contributions made in contemplation of their upcoming nuptials. Specifically, Steven Silverstein is asking for $19,000, which she allegedly withdrew from their joint bank account prior to the most recent split, $28,000 in rent to represent her ½ contribution for the apartment they shared, and $27,000 he spent in nonrefundable deposits a wedding photographer, hotel rental, videographer, and furniture rentals. The couple was engaged for two years during which Kendra Platt-Lee broke off the pending wedding twice.

Platt-Lee has since moved to San Diego and is pursuing a career in marketing. According to her lawyer, Platt-Lee denies all allegations and even plans to file a countersuit against Silverstein for failure to return her personal belongings. It is her position that relationship was resolved when she returned the $32,000 engagement ring he had given to her. The question for the Manhattan Supreme Court is whether the cash, the rent, and the deposits were all gifts from Silverstein to Platt-Lee or whether he has a right to reimbursement now that she has cancelled the wedding.

On May 19, 2012, Priscilla Chan married the creator of Facebook, Mark Zuckerberg. The couple met in 2003 at a fraternity party at Harvard where they both attended college. The wedding ceremony took place at the home they share in Palo Alto and most of the details are still being kept private. However, the wedding date has sparked the most media attention. Mark and Priscilla tied the knot just one day after Mark’s company went public. On his wedding day, Mark owned 503 million shares of Facebook, which at the time, was worth an estimated $17 billion. Sources indicate that Priscilla has no interest in Mark’s fortune. In fact, she recently graduated from medical school at the University of California, San Francisco and plans to pursue a career as a pediatrician.San Diego is located in one of the few states that have adopted community property laws. In community property states, any property acquired prior to marriage is separate property. Separate property will be awarded to the owner upon divorce without offset. Anything acquired after marriage is community property and generally distributed equally upon divorce. According to these laws, any property owned by Mark or Priscilla prior to marriage is their respective separate property and will be distributed to the owner upon divorce. However, after marriage, any earnings of Mark or Priscilla will become community property. In other jurisdictions, courts apply the equitable division rules. Under this statutory scheme, all property owned by either party at divorce is divided equitably by the courts regardless of ownership prior to marriage.

Although Mark has made it clear that his Facebook fortune is his separate property by marrying Priscilla the day after his company went public, the distinction between separate and community property can become blurred over time. Once separate property becomes commingled with community assets, the spouses must keep diligent records of the source of the funds or risk transforming once separate property into community property.

The main question upon the Zuckerberg divorce would be whether Priscilla is entitled to the increased value, if any, of Mark’s Facebook stock. The general rule in California is that stock acquired prior to marriage remains the owner separate property upon divorce or legal separation. However, the Zuckerberg case will be different because it is Mark’s job to continue to contribute to the growth of Facebook as well as its stock. So this situation begs the question – is the increased value of the Facebook stock merely stock or Mark’s earnings during the marriage? One possible solution to this gray area would be the creation of a premarital agreement. Prior to marriage, Priscilla and Mark had the option of determining how the increased value would be divided upon divorce. In the past, Priscilla had Mark sign a “relationship agreement” outlining the details of their relationship before she would agree to move to California to be with him. Considering the massive fortune at stake and the previous history between the parties, it is likely that the parties executed a premarital agreement prior to marriage.

A New York Court recently granted the state’s first contested no-fault divorce. While New York’s no-fault divorce law is only one year old, California enacted no-fault divorce over 40 years ago, in 1970.

Wife filed for divorce under New York’s year old no-fault divorce law on the grounds that her marriage was “irretrievably broken.” Wife testified that she has not had marital relations with her Husband for over five years, they slept in separate bedrooms and never ate meals together. Although she is in poor health, she testified that her Husband had not taken her to her doctor’s appointments in the last five years or even asked about her health for the past ten years. She further testified that she had “no hope for the marriage … and that her only wish is for a divorce so that she can have one-half of her marital assets and leave them to her four children before her demise.”
Husband contested the divorce because he wanted to remain married saying he “worked hard to acquire everything the parties had” and didn’t want to lose it in a divorce.

The Court applied the new no-fault law and granted Wife’s request for a divorce stating, “[I]t is this Court’s determination that the parties’ relationship has so deteriorated irretrievably …the plaintiff is entitled to a judgment of absolute divorce,”

In California, a no-fault divorce allows for a divorce without requiring either party to present evidence of wrong doing or breach of the marital contract. The idea behind a no-fault divorce was that removing the fault requirement would also remove some of the bad blood from the divorce process, and allow couples who wanted to break up to do so without having to make false allegations to justify the divorce to the court. No longer would couples, or even just one party, who wanted a divorce have to choose between lying under oath in open court or remain married.

Prior to no-fault divorce in California, a divorce could be obtained only through a showing of fault. This requirement meant that one spouse had to plead that the other had committed adultery, abandoned them, was cruel, or some other culpable acts. To get a divorce, parties often lied, colluded and committed fraud upon the court in order to get around the statutory limitations of the fault based requirement. Prior to the enactment of no-fault divorce, many prominent attorneys and judges in California believed that the “legal fictions” used by parties to satisfy the requirements for divorce made oaths meaningless and threatened the integrity of our legal system by encouraging perjury. Without committing perjury, many couple could not obtain a divorce, even if both parties wanted a divorce.

California’s no-fault divorce law provided a straightforward ground for ending a marriage – irreconcilable differences. Not only did California’s no-fault divorce laws eliminate the fault requirements to obtain a divorce for spouses seeking a divorce by mutual consent, but also in cases where only one party to a marriage wanted a divorce.

No-fault divorce ushered in other changes to divorce laws. Under no-fault divorce, gender-based responsibilities such as the Husband always being responsible for child support while the Wife was always responsible for custody gave way to gender-neutral responsibilities such as both parties being eligible for custody and responsible for child support.

As an interesting side-note, California’s no-fault divorce policy even invalided a Marital Agreement that was intended, after Husband had an affair, to “preserve, protect and assure the longevity and integrity of an amicable and beneficial marital relationship between them.” In the Diosdado case, rather than divorcing, the parties agreed to be subjected to a legal obligation of emotional and sexual fidelity to the other. If either party volitionally engaged in certain acts with any person outside of the marital relationship, that party would be in breach of the Marital Agreement, which provided for liquidated damages should the obligation of sexual fidelity be breached. Damages included that the party in breach would be: (1) required to vacate the family residence, (2) solely responsible for all attorney fees and court costs, and (3) pay $50,000 over and above any settlement or support obligations. Of course, Husband had another affair and Wife sued for breach of contract, seeking to enforce the liquidated damages clause of Marital Agreement. However, the Trial Court granted Husband’s judgment on pleadings, because the Marital Agreement was contrary to the public policy underlying California’s no-fault divorce laws. Wife appealed, but the Court of Appeal affirmed stating, “Here, where the agreement attempts to impose a penalty on one of the parties as a result of that party’s ‘fault’ during the marriage, it is contrary to the public policy underlying the no-fault provisions for dissolution of marriage. [See Family Code §2310, Family Code §2335.] For that reason, the agreement is unenforceable.”
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