Is It Worth Creating a Prenuptial Agreement in California?

There is a lot of talk around creating a prenuptial agreement in California. What is there to know exactly and is it even worth it?

Read further to find more details.

Introduction

Prenuptial agreements, sometimes referred to as premarital agreements or prenups, are one of those things that very few people like to discuss. After all, the last thing you want to talk about or think about is splitting up before your marriage even starts, right?

Regardless of the fluffy feelings, statistics show that divorces are very common – with many marriages resulting in them. So it is no wonder why those with assets to protect believe that using a prenuptial agreement for protection is a smart thing to do. But, in California, is creating a prenup worth it?

What is a Prenuptial Agreement?

A prenuptial agreement is an agreement between two parties before marriage to address ownership of property. It is effective once the couple is married and, should a divorce be sought, a prenup is considered a legal settlement. But there are some rules that apply to a prenup that will determine whether or not it will stand up legally.

California’s prenuptial agreement law consists of the statutes set forth by the Uniform Premarital Agreement Act (UPAA). This statute lists all the requirements for these contracts, which include:

• Lawful terms clearly stated within the prenup
• A written contract between the parties
• Signatures from both parties
• Signature from a notary

Each person may sign the agreement voluntarily – without coercion, duress, deceit, or intimidation. And at least seven days must be given to seek independent legal counsel before the signing takes place. This allows the signing party time to thoroughly understand all the terms and conditions of the agreement. And what his/her rights are.

When Should a Prenuptial Agreement Be Considered?

While prenups are absolutely used to protect the assets one has when coming into a marriage, that isn’t the only time they are used. In fact, for those who are getting married later in life that perhaps had a family already in another marriage, a prenuptial agreement can be used to secure the assets and protections for the kids from the previous marriage.

Prenups can address what is to happen to assets, including real estate, money, life insurance, and so forth upon death of the spouse. In other words, rather than everything going directly to the surviving spouse, there can be stipulations in the prenup that protect the rights of the children.

Benefits of a Prenup

Many feel that prenuptial agreements take away some of the romantic aspects of being in love and getting married. And although it may legitimately feel this way in some instances, there are some benefits to entering into a prenup. Below are a few reasons:

• Divorce happens despite good intentions. And it will make things go more smoothly through the court process.
• Reduces the chance of any fighting and undue stress during the divorce.
• Protect family heirlooms.
• Protect the rights of children from previous marriages, as discussed above.
• Keep debt separate, especially if one party has a high level of debt.
• Agree on spousal support ahead of time – just in case.
• Protect business interests.

Going through a prenup means having to have a real, open discussion about assets, debts, and overall finances. Unless a couple is intentional about it, these are things that are not openly discussed before marriage, nor is a financial plan set up. A prenuptial agreement can force this conversation.

Limitations of a Prenup

Prenuptial agreements can offer some benefits depending on your situation, but they definitely aren’t meant for every situation. They do have limitations. Below are a few of the most pronounced things that will cause a court to not enforce the stipulated terms within a prenuptial agreement.

• Child custody and support. Spousal support may be dictated in a prenup, but child support is a child’s right – not a parent’s – so a prenup cannot state child support amounts or regulate custody. If it is listed in the prenup, it will not be enforced.
• Unfair, exploitative, and deceptive terms stated in the prenup are not allowed – and will not be enforced.
• These agreements are to address financials and assets. Any other terms or clauses that do not pertain to these things, such as a clause about a spouse’s appearance, will not be enforced.
• Any terms of the agreement that require the spouse to participate in or perform illegal acts will challenge the validity of the contract – and will not be enforced.

Is it Worth Creating a Prenuptial Agreement?

Once you get married, in California, your property becomes community property. That means that any property acquired in the marriage becomes owned equally by both parties. So no matter what you gain in your business or your family, etc. during the course of your marriage, it will belong also to your spouse. Sometimes the law can favor the spouse that earns less, even though he/she has contributed less to the marriage financially, too. During a divorce, both parties will walk away with property and assets split 50/50.

It is important to note that a prenup is not necessarily needed for every couple. But for those who have assets before getting married, or are single parents, entrepreneurs or business owners, and other professionals, having the protection for your assets going into a new marriage is a good idea. The same thing is true for those who have a lot of debt.

Determining just how valuable it would be to you to have a prenuptial agreement before getting married is something you will have to base on your personal situation and needs. Sometimes speaking to an attorney can help.

Hire an Attorney

An attorney can be a great source of information when it comes to looking through your options before marriage. And trying to write up your own prenup can leave you vulnerable to it being invalid if you don’t follow certain guidelines.

By helping you review your options, draw up the legal agreement, and even handle the signing with a notary, you can feel confident that you are going into a marriage with a solid contract just in case things don’t work out.

Nobody ever wants to imagine a worst-case scenario when you are beaming with love. Put your heart aside for a moment and hire an attorney.