Prenuptial agreements, also known as “prenups”, are important legal documents that help couples clarify their financial rights and responsibilities before they get married. This is especially important in California, a community property state, where, without a prenup, any marital assets would typically be split 50/50 in a divorce.
In this guide, we’ll cover:
- What you can and cannot include in a prenup
- Legal requirements that make a prenup valid
- Tips for creating a strong and enforceable agreement
- The prenup process
What Is a Prenup?
A prenup is a legally binding contract that couples sign before getting married. It outlines how assets, debts, and various financial matters are to be managed in the event of a marriage ending, whether due to divorce or death. Unlike postnuptial agreements, which are created after the marriage, prenups need to be finalized before walking down the aisle to be considered valid.
Why Are Prenup Agreements Important in California?
In California, the law treats most assets and debts gained during the marriage as community property. This means everything earned or obtained while you’re married is generally viewed as jointly owned by both partners, with a few exceptions.
If a couple decides to divorce, the courts usually divide these assets and debts equally. This means it is split 50/50 regardless of how much each person contributed.
To provide greater flexibility and protect individual interests, many couples choose to create a prenup before they walk down the aisle. A prenup helps couples:
- Override the default community property rules
- Safeguard assets acquired before marriage, such as inheritances or family-owned businesses
- Outline terms for spousal support or alimony
- Protect one spouse from the other’s debts
- Clarify financial expectations which can help minimize future conflicts
When drafting a prenuptial agreement in California, it’s essential to understand that these agreements are highly customizable but must comply with state laws. Here are some of the most common terms that can be included:
Property and Asset Division
When it comes to property, understanding the difference between separate and community property is essential. Separate property includes assets brought into the marriage, inheritances, or gifts, and can remain the property of the original owner. On the other hand, community property, which the couple earns together during their marriage, can be divided by mutual agreement of both partners.
If one spouse owns a business, a prenup can help protect that business from becoming jointly owned if the marriage ends. Couples can also decide whether a home remains separate property or becomes part of their shared assets.
Debt Protection
A prenup can be a valuable way to manage debts, ensuring that one spouse’s debts from before the marriage, like student loans or credit card bills, don’t become the other’s burden. It can also be a way to clarify how any debts, such as mortgages or loans, will be addressed in the future.
Spousal Support Terms
In a prenup, couples can outline their preferences regarding spousal support or alimony. They might choose to waive it altogether, set a limit on the duration or amount of payments, or establish specific conditions for support, such as only providing assistance if one spouse is unemployed. It’s worth noting that courts may not accept waivers that leave one partner in a vulnerable position.
Inheritance and Estate Planning
Prenups also can play a significant role in ensuring planned inheritances, especially for children from previous relationships, are honored. They can keep family heirlooms or trusts with the original owner, preventing disputes down the line.
Financial Responsibilities During Marriage
Many couples find it helpful to include agreements on financial responsibilities in their prenup. This could cover whether they will maintain joint or separate bank accounts, how household expenses will be shared, and their saving and investing strategies.
What Should Not Be Included in a California Prenup
California prenups are governed by the California Uniform Prenuptial Agreement Act, which dictates how a prenup agreement must be formed. When creating one, you’ll want to know that certain elements are not allowed and cannot be enforced. Here’s a rundown of what to avoid:
Child Custody and Support
Courts will always determine child custody and support based on the child’s best interests during a divorce. Any attempts to settle these matters in advance through a prenuptial agreement won’t be valid.
Unlawful or Unreasonable Provisions
Clauses that encourage divorce, such as a financial reward for being the first to file, are considered invalid. Additionally, trying to waive child support rights or including terms that are heavily biased (like one spouse getting everything) won’t be accepted.
Personal or Non-Financial Provisions
Restrictions on lifestyle or personal choices, like expectations on weight, intimacy frequency, or penalties for cheating, can’t be a part of a prenup. Since California is a no-fault divorce state, you can’t enforce penalties for infidelity.
Unilateral Changes Based on Future Events
You cannot include terms that automatically adjust based on future circumstances. For example, saying something like, “If we have kids, I automatically get the house,” isn’t valid. Any changes to the prenuptial agreement need to be addressed in a new written agreement, known as a postnuptial agreement.
Ensuring Your Prenup Is Valid in California
When established properly, a prenup can bring reassurance to both partners. To make your prenup enforceable, follow these guidelines:
- Complete Financial Disclosure —Both parties must fully disclose all assets, debts, and income. Failing to do so can invalidate the agreement.
- Fair and Voluntary Signing Process —Ensure both partners feel free to sign, without any pressure, such as being rushed before the wedding. California has a 7-day rule that requires a final version of the prenuptial agreement to be presented to the other party at least seven days before signing, ensuring both parties have sufficient time to review and consider the terms.
- Independent Legal Advice —While not mandatory, having separate attorneys is a good idea, especially when there is a significant wealth disparity or if one partner is giving up spousal support. This helps ensure fairness.
- Correct Notarization and Documentation —The prenup must be written, signed by both parties, and notarized. Remember, verbal agreements are not legally binding and therefore not enforceable.
Should You Get a Prenup? Things to Keep in Mind
Ultimately, it’s all about protecting what you value and ensuring both partners feel secure entering the marriage. However, here are some instances of when a prenup may or may not be necessary.
When a Prenup Is Recommended
- If one partner has significantly more wealth or debt than the other.
- If you own a business or have a professional practice that you want to protect.
- If either of you has children from prior relationships needing inheritance protection.
- If one partner plans to make career sacrifices, like taking time off work for family reasons.
When a Prenup Might Be Unnecessary
- Both partners are in similar financial situations.
- If all your assets are already held jointly, a prenup is less essential.
How to Get a Prenup in California
- Start Early —Begin discussions at least 3-6 months before the wedding to avoid rushed decisions.
- Full Financial Disclosure —Exchange bank statements, property deeds, and debt records.
- Hire Separate Attorneys —Ensures both parties understand their rights and negotiate fairly.
- Draft and Finalize the Agreement —Must be signed, notarized, and comply with California law.
- Keep a Copy Safely Stored —Store with other important legal documents (will, trust, etc.)
Can You Change or Cancel a California Prenup?
Couples can modify terms after marriage with a postnuptial agreement, which supersedes the prenuptial agreement. A prenuptial agreement can be voided if fraud or coercion is proven, or if the terms have become extremely unfair due to unforeseen circumstances.
Family Law Attorneys in Bakersfield, California
A well-drafted prenuptial agreement can provide both partners with financial clarity, help them avoid future conflicts, and safeguard their personal interests. However, if there are any legal missteps, it may not hold up in court, making it crucial to seek professional advice when drafting a prenuptial agreement.
If you need help with a prenup, The Gorski Firm is here to assist you. We offer compassionate and quality care for all our clients, ensuring fair and considerate options for all parties involved. Schedule an appointment to protect your future and create a prenup that suits this next chapter of your life.
