Here’s an opinion from the California Court of Appeal that piques my legal imagination: Estate of Will, handed down on Tuesday.
Sometimes people marry later in life. They’ve already raised children and accumulated assets, and they don’t want California’s community property law to mix things up. So they make a premarital agreement that says, in effect: “I’ll keep my stuff and give it to my kids when I die, and you do the same. Let’s stay away from this ‘community property’ thing. I won’t inherit from you, and you won’t inherit from me.”
That’s what Gertrude and Ted did in Estate of Will. And they expected Gertrude to die first because she was suffering from cancer. (Apparently the main reason they got married was so Ted could put Gertrude on his medical insurance, to cover the costs of her cancer treatment.)
Then Ted died, leaving behind substantial assets, to be distributed by his will and trust, which had been executed more than 20 years before he married Gertrude. So guess who wasn’t named as a beneficiary. Suddenly Gertrude—and her potential heirs—are looking at those substantial assets and apparently thinking, “Hey, I could get me a piece of that!”
California has some rules about who inherits from whom. For instance, if a testator (a person who makes a will) failed to leave anything to a surviving spouse who married him or her after the will was executed, the omitted spouse can still receive a share of the estate—unless the omitted spouse waived his or her inheritance rights.
So there’s Gertrude, surviving spouse of Ted, and she’s not named in his will because he made the thing decades before he married her. He’s got this estate that will need to be distributed. And she made that premarital agreement waiving her right to inherit. D’oh!
But they didn’t follow all the Family Code rules to make the premarital agreement enforceable. Gertrude was not represented by her own attorney and didn’t make the necessary waivers. Ted presented the agreement to her only the day before the wedding, so she didn’t have the required seven-day period to think about it before signing. Oh, and there’s this nifty little section in the Probate Code that says “the validity and effect of [a] premarital property agreement shall be determined by the law otherwise applicable to the premarital property agreement.”
So Gertrude (or, more likely, Gertrude’s attorney) thinks, as I probably would have in the same situation, “Aha! The Family Code says the premarital agreement is unenforceable, so the waiver of inheritance rights in that thing won’t work! Score!”
But the Probate Code also has some rules about what makes a waiver of inheritance rights enforceable, and those rules are quite a bit less stringent than the Family Code rules about premarital agreements. There’s no requirement of independent counsel or a seven-day waiting period.
So there is this written agreement, signed by Gertrude that says she waives her right to inherit from Ted. It will not hold up as a premarital agreement. But the court says it does hold up as a waiver of inheritance rights. And that’s the part that fascinates me.
The court’s opinion is pretty short, only about five pages long, and it doesn’t offer a lot of explanation. But it’s clearly saying that, in certain circumstances, a written agreement can function as a premarital waiver of the right to inherit, even if it’s not enforceable as a full-on premarital agreement. This illustrates, in a bizarre way, a basic concept of legal agreements: the writing and the legal effect of the writing are not the same thing. If Gertrude had been able to litigate this writing as only a premarital agreement, she probably would have succeeded in having it set aside. But the same writing, when litigated as a waiver of inheritance rights, was perfectly enforceable.
You’re not supposed to cite judicial opinions for holdings that are only implied, and not considered directly, but this one makes me wonder about those heightened procedural requirements for premarital agreements. How many legal effects could a creative attorney glean from an otherwise “unenforceable” premarital agreement? This opinion is not especially clear on that point, but it seems the court is tying the enforceability of the individual provisions in a premarital agreement to the public policy reasons that undergird the heightened procedural requirements:
In enacting Family Code section 1615 [regarding the requirements for enforceable premarital agreements], the Legislature did not mention [Probate Code] section 140 et seq. regarding premarital inheritance waivers by surviving spouses. This omission implies that the Legislature intended that omitted spouse waivers continue to be governed independently by the Probate Code. Moreover, the two statutory schemes are not so inconsistent or irreconcilable that they cannot have concurrent operation.
Maybe I’m missing something, but that seems like a pretty big chink in the armor for heightened procedural requirements for enforceable premarital agreements. It surely cannot mean that any code section relating to the enforceability of a written agreement, enacted before Family Code section 1615 was enacted, can make a provision in the agreement enforceable, because that would make section 1615 a dead letter. But what about provisions in premarital agreements that may not be essential to achieving the policy goals for the extra precautions? Are those still enforceable, even if the whole agreement is not?
Of course, I can’t actually think of any other situations when a piece of a premarital agreement might be enforceable while the whole is not. So maybe I’m just chasing phantoms. And does anybody drafting these things really need another excuse to be careful with terms and keep them narrow? But now I’m wondering about the possibilities—if there are any.
As the court notes in the opening paragraphs of its opinion, the result here is clearly the fair one: it seems obvious that Gertrude did intend to waive her right to inherit. But she never expected to have that opportunity anyway. In that respect, the opinion is a warning sign to people making agreements: never assume you can foresee the future. Sometimes, as this court put it, the uncertainty of human expectations will become apparent. And then, as they say, you may be up a creek.
Please note the usual disclaimers. I am not giving legal advice. Nothing I write here is intended as legal advice and nothing I write here should be taken as legal advice. If you have a personal legal problem, you should consult with a lawyer in your area who is licensed to practice law.