Justin Bieber, Hailey Baldwin And Premarital Agreements

The trades are writing about Justin Bieber and Hailey Baldwin’s supposed decision to marry without a premarital Agreement. When should premarital agreements be considered before parties enter into a marriage contract?

It is common for parties to enter into should premarital agreements to deal with present and future property rights and rights to spousal support. Often, I am consulted and asked if a should premarital agreement is necessary. And, if I say yes, the next question I am asked from the party desiring such agreement is how do I explain to my soon to be spouse that an agreement is necessary? The question about necessity is easy to explain from a technical point of view whereas the “how do I explain” question is much more difficult.

From a technical vantage point, depending upon the jurisdiction where the parties marry, the law imposes a form of partnership upon married persons that do not have a should premarital agreement. Under community property law this means property acquired during a marriage other than property obtained by gift or inheritance becomes joint or community property. In other states, property is divided under other legal rules such as equitable distribution. In a community property state, absent a premarital agreement, a community interest can be created in the appreciation of separate property a party brings into the marriage. The best example is a business. Therefore, often parties desire to define their rights before they marry to minimize the risk of expensive litigation should the marriage fail. In many jurisdictions, a condition of having an enforceable premarital agreement is for each side to exchange accurate financial disclosures of all assets and liabilities. The better practice is for each side to be represented by counsel who may engage forensic accountants. This moves us into the problematic area of having one spouse explain to the other, although love is in bloom, a business transaction is about to take place. Counsel is charged with the duty of explaining what is being given up or gained by the proposed premarital agreement.

In the case of Justin and Hailey, we do not know if they consulted counsel and decided against participating in the uncomfortable reality of combining love with a corresponding business transaction. There is also speculation that there will be a premarital agreement, which is a topic for another time. If they forego legalities, trusting that their love will endure forever, apparently they are ignoring statistics that more than 50% of our population is in divorce court. Lawyers will say a properly drafted and fair (whatever that means) premarital agreement serves as a vehicle to avoid expensive litigation if either party decides to end the marriage. The attendant cost to such a contract is to condition the relationship upon a defined business transaction returning me back to the question clients often ask: “How do I explain this to my fiancée?” In the 21st century, people are more familiar with the notion of considering a premarital agreement but the question is still one that is asked.

Robert Eisfelder, founding partner of boutique law firm Robert W. Eisfelder PC, has been practicing family law in Los Angeles for over 40 years. He regularly handles complex family disputes involving significant estates, as well as matters involving significant support, custody or division of property.

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