Prenuptial agreement, also referred to as prenups, are legal agreements that couples sign before marriage to determine how assets will be divided in the event
of a divorce. Despite their increasing popularity, there are still misconceptions about their purpose.
If you reside in California, our family lawyer can assist you in safeguarding your assets and planning for your future, both during and after marriage.
Prenups are not exclusively for situations in which one partner possesses significantly more wealth or debt than the other. There are various reasons why you may wish to establish financial plans or agreements with your future spouse in writing before your wedding day. For instance, you may want to shield your partner from your debt, or you may want to make it easier to recover financially in the event of a divorce. This guide will explore these reasons and guide you through the process of creating a prenuptial agreement.
What Is a Prenup?
A prenuptial agreement, commonly known as a prenup, is a legally binding document that couples sign prior to getting married. Its purpose is to outline the distribution of assets and liabilities in the event that the marriage ends in divorce or separation. In general, a prenup contains provisions related to the division of property, spousal support, and other financial matters. These agreements are often utilized as a means of protecting the financial interests of one or both parties, while also defining the financial rights and obligations of each spouse both during the marriage and in the event of a divorce.
Why Do I Need a Prenup?
A prenup agreement can have various reasons other than protecting assets. For example, if you have children from a previous marriage, you may want to specify property that would pass to them instead of your spouse after your death. Protecting a spouse from the other’s debt is another common reason to get a prenup, especially if one partner has significant debt.
Another reason to get a prenup is if one spouse owns a business, a prenup can also help protect business assets, reducing the impact on co-owners and employees. Although no one plans for divorce when getting engaged, almost 50% of marriages end in divorce, making it essential to be prepared for the worst. Besides, state laws governing the division of assets during divorce already act as a type of prenup. If you don’t think these laws will result in a fair distribution, it’s wise to write your rules to apply to your marriage. Having a prenup in place can simplify the divorce process and prevent disputes later.
Steps to Creating A Prenuptial Agreement in California
Step 1: Why Each Party Should Have Their Own Attorney for a Prenuptial Agreement
To ensure a fair and legally binding prenuptial agreement, it’s essential that each party hires their own independent attorney. This is because each person has different assets and priorities that they want to protect, and having separate legal representation helps to avoid conflicts of interest.
While it’s possible for one party to waive their right to independent counsel, it’s generally not recommended as it can make the prenup more difficult to enforce. Therefore, it’s best for both parties to have their own lawyer who can review the agreement and ensure that their client’s rights and interests are protected.
Finding a knowledgeable attorney for this process can be daunting, but a good starting point is to ask your estate planning attorney for assistance or a referral. Estate planning attorneys often work on premarital agreements as part of their services, or they can refer you to a qualified attorney who does. By working with an experienced attorney, you can have peace of mind that your prenup will be drafted correctly and fairly.
Step 2: All assets and debts are disclosed by both parties
When creating a prenuptial agreement, it’s important for both parties to provide a comprehensive list of their assets and debts. To ensure the validity of the agreement, it’s crucial to be honest and thorough in making this list. Failure to disclose information could potentially lead to the prenup being challenged in court at a later date.
Before the initial consultation with a prenuptial agreement attorney, they may ask you to complete an intake form. This form can serve as a useful tool in helping you list your assets and debts by category, ensuring that nothing is left out.
Step 3: Their financial futures are discussed and negotiated by both parties
Although not mandatory, it is advisable for both parties to have an open conversation about their future financial life together. It is essential to decide whether to have joint or separate bank accounts, who will be responsible for paying the bills, how to file taxes (jointly or separately), and how to make significant purchases. By aligning financially, you can avoid various marital problems in the future.
Step 4: Prenuptial agreements are drafted and reviewed by attorneys
When planning to get married, it’s important to consider creating a premarital agreement that outlines important aspects of the couple’s financial life. Here are some key elements that should be included:
- Distinguish between separate and community property. Separate property belongs to the partner who brought it into the marriage, while community property is shared. It’s important to have a clear plan for how shared property will be divided in the event of a divorce.
- Determine how existing debts will be handled. Will each partner be responsible for their own debts after marriage, or will they be shared? This should be spelled out in the premarital agreement.
- Define spousal support, or alimony. In the event of a divorce, will either spouse be required to pay alimony? This should be clearly stated in the agreement.
- Address real estate concerns. If the couple shares a home, what will happen to it in the event of a divorce? Will it need to be sold, and if so, how will the proceeds be divided?
- Plan for taxes. In the case of a divorce, who will be responsible for paying any taxes owed?
- Specify how long the prenuptial agreement will be valid. If the agreement contains a “sunset clause,” this means it will expire on a specified date. If not, it will remain in effect indefinitely.
- By taking these steps and creating a premarital agreement, couples can protect themselves and their assets in the event of a divorce.
By taking these steps and creating a premarital agreement, couples can protect themselves and their assets in the event of a divorce.
California courts will not enforce the following provisions of a divorce agreement:
- Any clauses regarding child custody or child support should be excluded from the prenuptial agreement.
- Any spousal maintenance requirements should not be included if the signing spouse did not obtain independent legal counsel before signing.
- No terms should require a spouse to commit illegal acts.
- The agreement should not contain any clauses that are unjust, exploitative, unfair, or deceptive.
- Any terms that require one spouse to change their appearance, such as losing weight, should not be included.
- The agreement should not contain any terms that relate to the couple’s relationship.
By excluding these types of clauses from the prenuptial agreement, couples can ensure that their agreement is fair, legal, and protects the interests of both partners.
Step 5: Make sure your prenuptial agreement is finalized and signed
In California, it’s important to follow specific guidelines when creating a prenuptial agreement. The document must be in the possession of each party for at least seven days before signing it to be considered valid under the law. Additionally, both parties must sign the agreement in the presence of a notary, which is often available at attorney offices. It’s important to keep a copy of the agreement in a secure location, such as a safe or safety deposit box, and to have your attorney keep a copy on file, particularly if you have an estate planning file with them.
If you have any questions about creating a prenuptial agreement or are ready to begin the process, please feel free to reach out to our office for assistance.
Our affordable lawyers in Los Angeles will assist you during the process and offer payment plans that will fit you financial situation. Representing individuals, families, and businesses California and Ventura County, we are here to help you navigate your legal issue with compassion, experience, and unparalleled skill. Contact us or call at 213-788-4412 today for a confidential consultation about your case.