In California, premarital agreements set forth the spouses’ agreements on finances, property division and other matters if a spouse dies or their marriage ends. These contracts, also known as prenuptial agreements, usually deal with property that the couple knew about before marriage. Careful drafting helps assure that these agreements adequately deal with property acquired after marriage if they ever divorce.
A prenuptial agreement typically describes the event that will implement its terms, such as divorce or death. It usually contains a list of property that is owned separately before marriage and assets that will be considered community property.
Debt may be allocated. Prenuptial agreements may also have terms covering spousal support.
Prenuptial agreements allow couples to engage in financial planning and have some control over the resolution of divorce issues. Without a prenuptial agreement, property and other matters will be decided during the divorce process. A court may impose an order under California law that may not meet the spouses’ desires or situation.
However, prenuptial agreements cannot govern child support and custody. Courts address these matters while considering the best interests of the child.
Future assets may be allocated to one spouse. But the prenuptial agreement must specifically address it and provide a complete description of that asset.
In addition to assets, future income may be designated for one spouse. A small business owned by one party, for example, may generate a small amount of income before marriage but can provide more income in the future. A partner may also separate a family business that is inherited in the future.
A prenuptial agreement can also address debt that is incurred during marriage which is typically the responsibility of both spouses. If the parties anticipate that one spouse will incur a large amount of debt during marriage, the debt can be allocated to that spouse in the prenup.
Couples, if they entered marriage without a prenuptial agreement, may also enter a postnuptial agreement. These agreements can also update a prenuptial agreement for property or issues that were unanticipated before marriage.
Marital and postnuptial agreements must comply with California’s legal requirements. Each party should also have their own attorney represent the so their rights are protected and to avoid undue influence.