With a prenuptial agreement, you and your future spouse identify what property belongs to whom and how assets should be divided if the marriage ends (by divorce or death). The contract offers peace of mind, as you maintain control of your future by eliminating some of the unknowns. Your prenuptial agreement must be valid and enforceable to ensure that the arrangements you and your fiancé(e) made are honored. Creating a binding and fair premarital contract requires that you account for critical issues at the beginning stages.
What Is a Prenuptial Agreement?
A prenuptial agreement is a contract you can enter with your future spouse. The document specifies each of your separate property and who will get what if your marriage is dissolved.
Some considerations must be made before creating and signing a prenup. Accounting for certain factors is instrumental in developing a document that protects your rights and is enforceable.
Below are a few of the things to consider.
How Marital Property Is Divided in a Divorce
Prenups aren’t for everyone. But contrary to popular belief, they aren’t reserved only for people with substantial wealth. Anyone with property they want to protect should consider entering a premarital contract with their future spouse. The document isn’t about a lack of trust in either party. Rather, it’s a way to have a say in how assets are preserved and distributed if the marriage ends.
Whether you should get a prenup depends on your situation and feelings about California’s property distribution statutes. Without a premarital contract, if you and your spouse divorce and disagree on how to settle issues, the matter will be decided according to the law.
California is a community property state. That means marital property will be divided equally between the spouses upon a divorce. Marital property is anything the couple acquired during their marriage.
For the most part, courts don’t divide separate property – that which each spouse owned before the couple got married. Each spouse gets to keep their own assets. However, situations exist where portions of separate property are considered marital property, such as when marital assets were used to improve or enhance separate assets.
A divorce can get complicated when it comes to property division. Experts are sometimes needed to determine what belongs to whom and what is subject to an equal split.
If you don’t want the fate of your property to be left in the hands of a California family law judge, you may consider developing a prenuptial agreement.
Reasons for Getting a Prenuptial Agreement
Generally, a premarital contract identifies assets and determines how they are distributed in a divorce. Different couples will have different reasons for wanting to think about the control and management of property.
Some of these include:
- Wanting to protect separate property: One party might have substantial assets, own a family business, or have financial other interests before the marriage. A prenup can keep these from being subject to the state’s property division laws.
- Allocating assets to children: One of the spouses might have children from a previous marriage and want certain property given to them in the event of that spouse’s death.
- Avoiding lengthy litigation: As noted before, property division matters can be complex. By deciding beforehand who gets what, a couple can reduce some of the burdens and stresses they might face if they get a divorce.
It’s important to think about why you want a prenup and whether it can do what you want it to.
Certain Actions and Stipulations Can Invalidate a Prenup
Prenuptial agreements must be carefully crafted and entered into. Signing a contract that is not well-thought-out or contains unlawful provisions could invalidate the document, meaning that a court cannot enforce it and your wishes won’t be honored.
A premarital contract could be invalidated if it:
- Unjustly favors one party: While the stipulations in the contract do not have to result in equal division of property, they cannot be such that one of the spouses is at a significant disadvantage.
- Is not written and signed: A verbal arrangement or a contract accepted by only one spouse is invalid.
- Contains unlawful stipulations: A premarital contract cannot include provisions about child custody or child support. It also cannot involve anything considered illegal or go against public policy.
- Was not signed willfully: A court cannot enforce a prenup that one party signed because of the other’s force, coercion, or threats.
- Was signed because of misrepresentations: Both parties must fully and accurately disclose all of their assets when developing a prenup. The document would be considered invalid if one party willfully hid assets or lied about their financials.
- Was not carefully considered: Both parties must have had time to review the prenup before signing it.
Get Help from an Attorney
If you are considering entering a prenup, retain the services of a lawyer. They can help negotiate provisions and review stipulations to protect your rights and future.
For legal assistance in San Diego, please contact Claery & Hammond, LLP at (619) 567-6704.