Before marriage, couples should plan their financial future and what would happen if their marriage ever ends or one of them dies. A California premarital agreement, also known as a prenuptial agreement, can help couples with their financial planning and property division if they ever divorce. But it is important to comply with California’s family law or these contracts may be unenforceable.
Advantages
Prenuptial agreements act as insurance that can assist couples with the hope that they are never used. There are no restrictions on which couples can benefit from these agreements.
Prenups may be especially important for a party with assets before marriage such as physical property and retirement accounts. Prenuptial agreements also have benefits for single parents, business owners, grandparents, and professionals. Prenups can address debt so one spouse is not financially liable if there is a death or divorce.
Couples may execute a new prenuptial agreement if their circumstances change after they marry if they both agree to the changes and comply with the state’s legal requirements. Spouses can also enter a postnuptial agreement if they never executed a prenup or if it needs modified.
California’s Uniform Premarital Agreement Act
The UPAA contains requirements for prenuptial agreements. A prenuptial agreement, according to the UPAA, is a contract that each party signs before marriage and takes effect when they marry.
Each party must provide complete and accurate information on their assets, income, and debts. A court will not enforce a prenuptial agreement that is unwritten, improperly executed, signed under duress or if the couple never marries.
Prenuptial agreements can cover issues like the division of property and spousal support. It may not contain terms governing child custody or support and spousal maintenance if a spouse signed the agreement without independent legal advice. A prenup may not require illegal conduct, address their relationship, contain non-financial requirements on items such as a spouse’s weight or appearance, and any conditions that are unfair, unjust, deceptive, or exploitive.
Separate property
There are other options for keeping property separate. A trust created before marriage may keep assets separated.
A party wanting to keep separate ownership of a house owned before marriage should continue to pay for it solely with money earned outside marriage and not from a joint fund. Do not deposit any paychecks or pay for community expenses such as a mortgage from a pre-marital fund that you want to keep separate.
Each party should fully understand a prenuptial agreement and receive independent legal advice. An attorney can help parties draft an agreement and assure that that the agreement is fair and reasonable and complies with state law.