Frank McCourt Alleges Law Firm Messed Up Prenup
Prenuptial Agreements Make Property Rights Clear On Divorce
Dodgers owner Frank McCourt claims he could be entitled to “hundreds of millions of dollars” as a result of alleged malpractice by the law firm that drafted a prenuptial agreement for him.
McCourt made the claim as he battles Bingham McCutchen, which filed suit in April seeking unpaid legal fees and a declaratory judgment that it had done nothing wrong, the Los Angeles Times reports. “The damages stemming from Bingham’s malpractice could be relatively modest,” McCourt argued in the document, “or the damages could reach into the hundreds of millions of dollars.”
The prenup agreement at issue had two versions: In the later version, the word “exclusive” was changed to “inclusive” to indicate that Frank McCourt was sole owner of the baseball team and not subject to California community property law. Bingham partner Larry Silverstein has testified he made the change to correct a drafting error. The agreement has since been invalidated and McCourt is continuing his legal battles to retain control of the team.
THE FIRST LESSON HERE is that hiring the most expensive/biggest law firm you can afford is not always in your best interest.
SO WHAT CAN YOU DO WITH A PRENUPTIAL AGREEMENT? WHAT SHOULD YOU DO IF PRESENTED WITH ONE?
A prenuptial agreement, also known as a premarital agreement, is a contract entered into prior to marriage by the people intending to marry. The content of a prenuptial agreement can vary, but usually includes provisions for division of property and spousal support in the event of a dissolution of the marriage. Prenuptial agreements in California are governed by California’s Uniform Premarital Agreement Act. You can find the official version here.
Prenups are most common when one or both parties bring substantial assets to the relationship. Prenups often concern what property remains the separate property of the individuals once they get married. Prenups are also helpful in second family situations, e.g. one or both spouses has children from a previous relationship and desires to plan for their care.
Section 1610 of the California Family Law Code defines what a prenuptial agreement (called a premarital agreement in the statute) is– an agreement made by an engaged couple that will take effect when they get married. Section 1610 also defines what property is, and the definition is broad, encompassing pretty much anything of value.
Pursuant to section 1611, a prenuptial agreement California must be in writing. The next section, 1612, sets out what can and cannot be done with the agreement. Generally, any financial issue can be dealt with in a premarital agreement. Issues relating to children, including child support and custody are not permitted. Nor is one allowed to contract about obligations during the marriage, such as household chores, frequency of sexual relations, or penalties for adultery.
California has special provisions regarding spousal support in prenuptial agreements. Provisions regarding spousal support will not be enforced unless the person whose receipt of spousal support is limited or waived had independent counsel (was represented by an attorney) before entering into the agreement. It also states provisions regarding spousal support will not be enforced if they are unconscionable at the time of enforcement. This means that it is impossible to determine in advance whether a spousal support provision will be enforceable when you separate because your financial circumstances can change at over time.
Section 1613 provides that a premarital agreement becomes effective upon marriage. Under section 1614 of the California Family Law Code, you are allowed to amend or revoke your prenuptial agreement California after you get married, following similar procedures as the initial creation of the agreement.
A critical part of the California Uniform Premarital Agreement Act is found in section 1615, which sets out when a prenuptial agreement is enforceable, and when it isn’t. There must be financial disclosure, the premarital agreement must not be unconscionable, there must not be any coercion, and the parties must understand what they are signing. California requires that there be at least seven days between when a party is first presented with an agreement and when the agreement is signed.
If you are interested in a prenuptial agreement or if you have been presented one, we can counsel you regarding your rights, the law, and the rights of your intended spouse.