Prenuptial Agreements

A prenuptial agreement can be a difficult topic of discussion with your soon to be spouse. It is disheartening to think about a possible end to your marriage before it has even begun. However, a prenuptial agreement does not necessarily have to be a bad thing. Whether it is your first marriage or a subsequent marriage, a prenuptial agreement can provide you and your spouse clarity on what would happen with your property and finances if your marriage were to end.

California is a community property state. Therefore, when a couple marries, the law considers the marriage as a form of partnership. This means that any assets acquired during the marriage and any debts incurred by either party are considered community and each spouse is equally entitled and responsible for the same in the event of divorce. A prenuptial agreement can change the characterization of parties’ assets and debts on the occurrence of divorce. They essentially alter the rights and obligations of a party with respect to property interests, which would otherwise be determined under California law. This is important regardless of one party’s wealth or assets when entering the marriage. While a prenuptial agreement can of course protect the separate property (homes, bank accounts, investments, etc) that one party enters into the marriage with, it can also protect any future assets one or both parties may acquire. For example, parties can pre-determine any potential spousal support payments, and the characterization of any future income, investments, companies, etc. An individual does not have to be wealthy or potentially gain wealth in the future to benefit from a prenuptial agreement. Essentially anything can be protected.

The Uniform Premarital Agreement Act has governed prenuptial agreements in California since 1986. Generally, the law states the following:

  • Prenuptial agreements become effective once the parties get married;
  • Prenuptial agreements can address such things as present property rights, future property rights, inheritances, spousal support, etc.
  • They CANNOT negatively affect child support or take away the court’s right to determine custody and visitation consistent with the best interests of a child. Child support is the right of the child and therefore, parents cannot waive that right on behalf of the child.

There are many other aspects to prenuptial agreements that are important to consider. For example, both parties must provide valid consent to enter into a prenuptial agreement. In other words, they cannot do so based on fraud or duress and must do so knowingly and voluntarily. The law requires that both parties have the mental ability to consent and must exchange full and complete financial disclosure prior to entering into any agreement. It is not necessary to have an attorney when entering into a prenuptial agreement, however if one party is not represented by counsel, they must sign an acknowledgment indicating that they were not represented by counsel and received full financial disclosure from other side.

It is important to seek counsel when drafting or reviewing a prenuptial agreement provided to you by your soon to be spouse. This can save you from significant hardship in the future should your spouse want to contest the validity of the prenuptial agreement down the road.

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