Prenuptial Contracts: Pratfalls, Pitfalls and Pitbulls

APPENDIX B
 
 

THE "PITBULL" PRENUPTIAL AGREEMENT
 
 
 
 

AGREEMENT RE: STATUS OF PROPERTY


 
 

WHEREAS, "Got Bucks", hereinafter referred to as "G.B.", and "Need Dough", hereinafter referred to as "N.D.", are currently engaged to be married, but wish to provide, prior to their marriage, for a formal agreement ensuring that their separate estates will remain free from any claims arising out of the prospective marital relationship; and
 
 

WHEREAS, each party has separate property adequate to satisfy his or her own needs and any existing creditors, each is in good health, neither is dependent upon the other for support, and neither has children or dependents who are dependent upon the other for support,
 
 

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the parties hereby agree as follows:
 
 

1. Separate Property of .
 
 

It is agreed that all properties of any kind, nature or description belonging to _______ as of the execution of this Agreement, and all personally earned income received or accrued, directly or indirectly, from any employment of ________, including earnings from self-employment, social security and retirement income, acquired after this date shall be his personal and separate estate and shall remain forever his personal and separate estate. All interest rents, income and profits which may, in time, accrue or result in any manner from increases in value or to be collected from the use of the same in any way, including any income or increase in value resulting from inflation or otherwise, directly or indirectly from the labor or credit of the martial community or either member of the marital community shall likewise be and remain his personal and separate estate, subject only to the conditions and limitations hereinafter set forth in this Agreement. A list of separate properties at this time of is attached, marked Exhibit "A".
 
 

2. Separate Property of .
 
  It is agreed that all properties of any kind nature or description belonging to _______ as of the execution of this Agreement, and all personally earned income received or accrued, directly or indirectly, from any employment of ________, including earnings from self-employment, social security, and retirement income, acquired after this date shall be her personal and separate estate and shall remain forever her personal and separate estate. All interest, rents, income and profits which may, in time, accrue or result in any manner from increases in value or to be collected from the use of the same in any way, including any income or increase in value resulting directly or indirectly from the labor or credit of the marital community or either member of the marital community shall likewise be and remain her personal and separate estate, subject only to the conditions and limitations hereinafter set forth in this Agreement. A list of the separate properties at this time of is attached, marked Exhibit "B".
 
  3. Execution of Documents:
 
  It is agreed between the parties that each will sign with the other all title papers, deeds or other papers necessary to transfer property when sold or conveyed to a purchaser as such title papers are usually executed by man and wife in the state of the residence of the parties or in the state where such property is located, and that this courtesy shall be prompt at any time and at any place. The parties agree that no request for such signature shall, in any way, be construed to be an acknowledgment or an admission of any property right or interest contrary to this Agreement in the party providing the signature.
 
 

4. Contribution to Expenses:
 
 

Each of the parties agrees to contribute to a common fund or pool, a mutually agreed and pre-determined portion of their respective earnings. To this fund or pool shall be added such additional and supplemental earnings or property as may reasonably be required to maintain the life style to which the parties aspire, that is to say, pursuant to as generous a standard of living as the size and composition of the parties' respective separate and community property estates would reasonably permit during the parties' joint life expectancy and consistent with their individual tastes, desires and social status. It is the intention of the parties to utilize this common fund or pool to meet the parties' normal joint living expenses so that a record can be maintained and the parties' other properties not be commingled. For the purpose of this paragraph, federal income taxes owing on account of income or property required to be contributed to the common fund or pool, shall be deemed expenses chargeable against the common fund or pool. Federal income taxes due as the result of other sources or income to either of the parties shall not be deemed chargeable to the common fund or pool, but shall be paid by the parties out of their separate funds based upon an equitable allocation of tax liability to the party whose income or other income tax attributes has generated the tax liability.
 
 

In the event of an extreme emergency or a prolonged illness or disability, the separate property of the party confronted with such extreme emergency or subject to the prolonged illness or disability may be utilized to meet the extraordinary expenses resulting therefrom, including expenses of last illness, death and burial. In making contributions to the common fund or pool for joint living expenses in excess of the regular earnings of the parties, the relative contributions of each of the parties shall not be required to conform to any pre-determined mathematical formula; however, it is the intention of the parties that each will contribute roughly matched or equivalent amounts over time. In the event that the parties may occupy as a residence, property, including personal property, owned by one or the other of the parties, it is specifically agreed that a fair monthly rental value may be assigned for the use of that property and the owner may be credited or paid such reasonable use value as his or her separate property. In the event that the parties are unable to agree upon the amounts that each is to contribute from time to time to the common fund or pool, or in the event that the parties agree to dispense with the provisions for maintaining a common fund, each party shall then contribute toward their common living expenses directly from their own separate monies and their failure to utilize a joint fund for whatever reason shall in no way defeat this Agreement.
 
 

5. No Agreement to Marry:
 
  Nothing in this Agreement shall be construed to be a promise or contract that the parties will marry, and in the event the parties' engagement should be broken for any reason, each of the parties does hereby expressly waive and release the other from any and all claims against the other, including but not limited to incidental or consequential damages flowing therefrom or incidental thereto, and this Agreement shall be deemed terminated by the mutual consent of both parties upon the breaking of their engagement.
 
  6. Presumptions Regarding Ownership:
 
  In the event that either party acquires property during the term of this Agreement, the following presumptions shall apply and shall conclusively govern in the following order of priority to establish ownership as between the parties and between the parties and creditors:
 
  (a) the party whose name appears on the title or bill of sale or purchase contract; or

(b) the party whose funds or property was used to acquire the new property; or

(c) the party who ordinarily uses or utilizes the property in his or her work or recreation or for whom the property has some specialized or customized application.
 
 

 In the event that both parties' names appear on the title, purchase contract, or bill of sale, it shall be conclusively presumed that the parties intend that such property be jointly owned, with each party having an equal interest therein. No property shall become jointly owned property, nor shall either party acquire an interest in the other party's separate property by performing work or labor thereon or in the furtherance thereof without an express contemporaneous written declaration that such rights be created, and in the absence of such proof, all such labor or work shall be deemed to be gratuitous and no labor by either party shall create a community interest or lien in any such property. THE PARTIES INTEND THAT THE NO COMMUNITY PROPERTY WILL BE ACQUIRED DURING OR AS A RESULT OF THE MARRIAGE BETWEEN THE PARTIES, EXCEPT AS OTHERWISE PROVIDED HEREIN, AND ALL PRESUMPTIONS FAVORING THE CREATION OF COMMUNITY PROPERTY ARE HEREBY SPECIFICALLY WAIVED BY EACH OF THE PARTIES IN FAVOR OF THE PRESUMPTION THAT THE ALL PROPERTY OWNED BY THE PARTIES OR JOINTLY-OWNED PROPERTY RATHER THAN COMMUNITY PROPERTY.
 
  7. Third Party Liabilities:
 
  Notwithstanding anything herein contained, neither party intends by this Agreement, to be or to become responsible for the separate debts of the other party or for any obligation imposed by any law upon any stepparent except when the stepchildren are residing with the parties and nothing herein shall be construed to confirm or create rights in favor of third party creditors of either party where such rights would not exist at law. Each of the parties specifically agrees to indemnify and hold the other party fully harmless from any of his or her own debts, including any obligations to support stepchildren not assumed by this Agreement and which may be imposed by law against the separate property of the other party. Neither party shall be entitled to create liability for any purpose without the express written joinder and actual consent of the other party except pursuant to a written power of attorney as provided in RCW 26.16.060 or express written authorization.
 
 

NO CREDITORS SHALL BE ENTITLED TO ESTABLISH OR IMPOSE OR PREDICATE LIABILITY AGAINST THE MARITAL COMMUNITY NOR AGAINST EITHER PARTY BASED ON THE ACTIONS OR CONTRACTS OF THE OTHER PARTY ON THE BASIS OF THE MARITAL RELATIONSHIP OR ANY LAWS WHICH MAY OTHERWISE IMPOSE SUCH LIABILITY BASED ON THE EXISTENCE OF A MARITAL RELATIONSHIP, AND ANY SUCH LAWS TO THE CONTRARY NOTWITHSTANDING, AND NO CREDITOR OR EITHER PARTY SHALL BE ENTITLED TO RELY UPON THE EXISTENCE OF A MARITAL RELATIONSHIP TO IMPOSE LIABILITY UPON THE OTHER PARTY OR UPON THE INTEREST OF THE OTHER PARTY IN ANY JOINTLY-OWNED PROPERTY.
 
 

8. Rights On Separation:
 
  In the event of any separation between the parties or any termination of the marital relationship, each of the parties shall be entitled to segregate and to remove his or her own property. All jointly owned property and the remainder of any pooled funds shall be applied first to pay the remainder of any normal living expenses incurred before separation and then shall be partitioned equally by value between the parties. In the event that any jointly incurred debts remain unsatisfied from joint property, each of the parties agrees to contribute equally from their separate property until they are fully paid. Except as otherwise provided herein, each of the parties does hereby waive, release and quit claim to the other all rights to alimony, maintenance, family allowance, homestead, awards in lieu of homestead, inheritance, administration upon the estate of the other, or any rights to be awarded any portion of the other party's separate property and claims which he or she now has or may hereafter have as husband, wife, widow or widower, or otherwise by reason of the marital relationship hereafter existing between the parties, whether or not the marriage is dissolved, and any existing beneficiary designations, wills, joint tenancy or survivorship agreements, community property agreement, or other agreements or rights between the parties previously executed or executed by the parties or executed in the future are hereby canceled, rescinded and revoked in their entirety unless executed with specific reference to this Agreement and consistent with this Agreement as now executed or as hereinafter modified. Notwithstanding the foregoing, it is the general intention of the parties, but not the obligation of either of the parties, to pursue the following aspects of estate planning following the marriage of the parties:
 
  (a) each would intend to execute a new will; and

(b) each would intend to execute similar durable powers of attorney effective upon disability.
 
 

 In the event that the parties do pursue some or all of the foregoing items of estate planning, nothing herein contained shall be construed to create any contractual rights or expectancies between the parties with respect thereto, and all such estate planning by either of the parties shall remain subject to modification by the parties independently and without limitation.
 
  9. Control of Property:
 
  It is understood that each party to this Agreement shall control his or her own personal estate as described herein and do with that property whatsoever he or she wishes and wills by his or her orders or directions or by last will and testament, the same as either would or could do if no marital relationship existed written agreements, neither party shall have any authority or power, acting alone, to bind the marital community or to pledge, transfer, sell or encumber the property or credit of the other party.
 
  10. Entire Agreement, Amendments, Severability:
 
  This Agreement constitutes the whole agreement by and between the parties, supersedes any prior agreements, and the parties acknowledge that there is no oral understanding or other agreement with respect to the matters contained herein or pertaining to the subject matter of this Agreement, and expressly revoke any prior written or oral agreements or understandings. This Agreement may only be modified by an express written agreement signed by each of the parties but with such an express agreement and provision of this agreement may be modified by the parties freely and at any time with like effect as if the parties were still single persons at the time of the execution thereof.
 
 

In the event that the parties by their conduct establish by practice or procedure a working arrangement for the conduct of their personal financial affairs which is at variance with the provisions of this agreement but without executing a written amendment hereto, neither party shall acquire any vested rights or be subject to any obligations arising therefrom notwithstanding the length of time or reliance that may be claimed to have become associated with such practice or procedure. In the event any part or portion of this agreement is ever declared not enforceable for any reason, the remainder of the agreement shall not be affected thereby but shall be enforced according to the terms thereof.
 
 

11. Loans and Dealings Between the Parties:
 
  The parties have already entered into certain financial transactions, both between themselves and through intermediaries, all of which are or will be separately documented as loans with terms of repayment and security as provided therein. The parties expressly agree that in those existing dealings.
 
  12. Agreement Executed as Own Free Will:
 
  The parties agree that each enters into this Agreement without any reservations, representations, promises, pressure, or inducements, and have done so as their own free and voluntary act and deed.
 
  13. Recordation of Agreement:
 
  At the option of either party, an executed copy of this Agreement or a memorandum thereof giving notice that the parties have contracted to create no community property or community liability by virtue of their marital relationship may be recorded with the County Auditor or recording officer and notice thereof may be published in a local newspaper in the county where the parties reside at the time of execution or in any county where the parties thereafter reside.
 
  14. Representation by Counsel:
 
  The parties both acknowledge that they have each had the opportunity to be represented in the negotiation, preparation and execution of this Agreement by legal counsel. Approval of counsel for any party represented by counsel is set forth below. The failure of one party or the other to seek representation prior to the execution hereof shall constitute a full and complete waiver of the right to be represented in this matter and shall not affect the validity or finality of this Agreement.
 
  15. Legal Expenses:
 
  In the event a party incurs legal expense to enforce the terms hereof, the party who has failed to comply with this Agreement shall pay such legal expense to the other party.
 
 
 
 
 
 
   

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