Property division during a divorce can be a complex and emotionally charged issue. It involves the distribution of assets and debts accumulated during the marriage. In some cases, property acquired before the union may also be subject to division. Several factors often influence the division.
Prenuptial agreements, or "prenups," offer protection in the event of a divorce. This legal document, agreed upon before marriage, outlines asset and debt division if the marriage ends. Prenups can be intricate, covering details about specific assets, inherited wealth, or future earnings. They serve as an insurance policy, safeguarding your financial interests.
Engaging a family law lawyer in developing a prenup is beneficial. They bring legal insights, creating a binding and enforceable prenup. A lawyer can guide you in considering relevant factors and preventing future disputes. They help develop fair, transparent agreements that adhere to the law.
At Claery & Hammond, LLP, we understand the sensitivities surrounding property division and prenups. Our experienced team, serving the people of San Diego, is here to navigate these complex issues. Call us at (619) 567-6704, or fill out our online contact form for a consultation.
What Is a Prenuptial Agreement?
A prenuptial agreement, often called a "prenup," is a legally binding contract created before marriage. This agreement stipulates the ownership of assets and how they would be divided in the event of a divorce.
Prenups can include all types of property, including:
- Real estate
- Personal possessions
- Financial assets, such as stocks and bonds
For a prenup to be legally valid, certain requirements must be met.
These criteria include the following:
- First, the agreement must be in writing and signed by both parties. Oral agreements are not valid prenups.
- Second, both parties must enter the agreement voluntarily, without pressure or coercion.
- Third, full disclosure of assets is mandated, meaning that both parties must wholly and honestly disclose their properties and liabilities.
- Lastly, the agreement must be fair and cannot leave one party with significantly less than they were entitled to.
Advantages of Having a Prenuptial Agreement
A prenuptial agreement confers several advantages, key among them being the protection of individual assets. When entering a marriage, one or both parties may possess substantial assets, including business interests, inherited wealth, or personal savings. A prenup distinguishes such assets as separate property, keeping them with the original owner in case of a divorce.
In addition, a prenup can clarify financial responsibilities during the marriage. It may outline who is responsible for what expenses, how joint and individual incomes will be managed, and how investments and retirement plans will be handled. This delineation can alleviate potential disputes over financial matters during the marriage.
Finally, a prenuptial agreement streamlines the property division process in the event of a divorce. With a valid prenup, dividing assets can be a clear-cut process, saving time, reducing legal fees, and minimizing conflict. It can also protect against debts incurred by the other party, shield a party from losing their residence, and protect the financial stability of children from previous relationships.
What Can and Cannot Be Included in a Prenuptial Agreement?
A prenuptial agreement can cover a broad range of financial matters. It is commonly used to catalog assets each person owns individually and designate what will remain separate property and what will be considered marital property. It can describe how future assets like real estate purchases, business investments, or inheritance will be categorized.
Provisions for debt division are also often included in a prenup, protecting each party from assuming the other's debts in case of a divorce.
Furthermore, a prenuptial agreement can determine whether spousal support (alimony) will be paid in the event of a divorce and outline the specifics of such an arrangement.
However, while a prenuptial agreement can cover many topics, certain matters are generally not permissible. Most importantly, a prenuptial agreement cannot dictate child custody or child support Terms. Courts make these decisions during divorce based on the child's best interests.
A prenup also cannot include provisions that encourage divorce or separate arrangements that would incentivize a party to seek divorce. In addition, any arrangements that would lead to an excessive (extremely unfair) outcome can be excluded.
Creating a Prenup with Legal Help
Creating a prenuptial agreement is a process that requires careful thought, open communication between the partners, and sound legal advice. The first step is to openly and honestly discuss finances with your partner. This conversation should cover your assets, debts, and financial goals, setting the groundwork for the agreement.
Next, both partners must compile a comprehensive list of their assets and liabilities. This inventory includes property, investments, savings, retirement funds, and debts. Full disclosure is essential as it facilitates the agreement's fairness and enforceability.
Once you have discussed and documented your financial status, it's time to determine how you want to handle property and financial matters during the marriage and in the event of a divorce. This step might include decisions on who will manage the finances, how you will divide expenses, and how you will handle savings and investments. It's also the time to decide how you want to divide your property if the marriage ends.
After you have made these decisions, seek the counsel of a family law attorney to draft the agreement.
Creating a prenuptial agreement may seem daunting, but with open communication and sound legal advice, it can be a beneficial tool that provides financial protection and peace of mind for both parties.
If you’re in San Diego, learn how our Claery & Hammond, LLP team can guide you through the process. Contact us at (619) 567-6704.