Using a Prenuptial Agreement to Protect Retirement Accounts in San Jose
When people think about prenuptial agreements, they often picture wealthy individuals protecting family fortunes or business owners shielding their companies. But prenups aren’t just for the ultra-rich. For many couples in San Jose, protecting 401(k)s, IRAs, pensions, or other retirement accounts is one of the smartest reasons to create a prenuptial agreement before marriage.
Our San Jose prenuptial agreement lawyer provides trusted legal guidance to clients in these cases. In California, where community property laws apply, we explain how failing to address retirement savings in a prenup can lead to a costly and complicated division process if the marriage ends in divorce.
How California Treats Retirement Accounts in a San Jose Divorce
California is a community property state, which means that most property and assets acquired by the couple over the course of their marriage are considered jointly owned. That includes contributions to retirement accounts, even if the account itself was opened before the marriage.
Under Section 760 of the California Family Code, any funds deposited into a retirement account during the marriage, as well as any growth from those funds, may be considered community property. This includes:
- 401(k) contributions made during the marriage
- Pension plan accruals tied to years worked during the marriage
- Increases in the value of IRAs and other investment-based retirement savings
In a divorce, these assets may be subject to equal division unless there’s a valid prenuptial agreement in place stating otherwise.
How a San Jose Prenup Can Protect Your Retirement Assets
A prenuptial agreement allows future spouses to contract around community property laws and define how retirement assets will be treated both during the marriage and in the event of a divorce. With a carefully drafted prenup, you can protect:
- Retirement savings accumulated before the marriage, keeping them separate;
- Future contributions and account growth, if both parties agree;
- Pensions or retirement benefits earned through work, including CalPERS or private plans;
- How survivor benefits are handled as part of estate planning
A prenuptial agreement in San Jose can also outline what, if any, financial support will be provided to a lower-earning spouse, ensuring both parties’ long-term security is considered. However, keep in mind that to be enforceable, it must disclose all assets, be entered into willingly, and not unduly favor one spouse over the other.
It’s also important to note that while retirement accounts can be protected in a prenup, the Employee Retirement Income Security Act of 1974 (ERISA) or other federal rules may still affect how certain benefits are distributed, especially in employer-sponsored plans.
Contact Our Experienced San Jose Prenuptial Agreement Lawyer To Discuss Your Options
Retirement savings are often among the most valuable assets you’ll ever build. Don’t leave their future up to chance.
At Argyris Mah, LLP, we can help you create a strong, enforceable prenuptial agreement that protects your retirement accounts and secures your financial future. To discuss your options, give our office a call or contact us online. Request a confidential consultation today with our San Jose prenuptial agreement lawyer.
Sources:
leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=FAM&division=4.&title=&part=2.&chapter=1.&article=
dol.gov/general/topic/health-plans/erisa
