What is a Prenuptial Agreement
A prenuptial agreement is simply a contract between two people who intend to marry that defines the property rights of each person – upon getting married and in the event of a divorce. Among other things, this contract may define what assets and liabilities belong to each person, what income will be considered community property and which any will be separate, how specific assets will be divided in the event of a divorce and may limit or define a spousal support obligation in the event of a divorce. The purpose of the prenup is to allow the parties to make these provisions for themselves prior to the marriage, rather than allowing the judge to decide them for them in the event of a divorce.
The basic legal definitions relating to prenups in California come from the California Family Code , beginning with Sections 1610 through 1617. A prenuptial agreement may cover any of the issues related to divorce that are included in the statutory definitions.
One of the most common misconceptions regarding prenups is that they are only for the wealthy or elite. This is simply not true – most people can identify an asset of some sort that they would like to protect for themselves. A prenup is not about wealth – it is, rather, about protecting your assets. It is intended to protect those assets both while you are married (in order to avoid the burden of coming to court to prove that they belong to you if your spouse makes a claim to some portion of the assets) and in the event of divorce.
Legal Requirements of a Prenup in California
In California, in order to be considered valid under the Family Code, a prenuptial agreement must meet a number of legal requirements before the court will enforce the prenuptial agreement. All prenuptial agreements must be in writing and are subject to all of the defenses which apply to contracts generally. In addition, California law requires specific procedures to be followed when entering into a prenuptial agreement.
Sufficient Time to Consider the Agreement
The California Family Code requires that both parties have at least 7 days between the time the document was presented to them and the time they sign it. If they choose to waive that right, they must do so in writing and without any undue influence by the other party.
Independent Attorney Review
Both parties must be represented by separate counsel during the preparation of the agreement. Where the party chooses not to have an attorney, the waiver must be in writing, in the agreement, and there must also be independent legal counsel present to advise about the rights under the law.
Typical Components of a California Prenuptial Agreement
Property Division: A prenup can detail how the couple’s assets will be divided in the event of a divorce. Both community and separate property should be addressed. This is crucial in California, where most property acquired during the course of the marriage becomes community property unless one spouse can provide clear evidence that it’s separate property. That evidence may involve such things as an appraisal of the property; proof that it was paid for with funds received from an inheritance, gift or trust; or a partnership agreement for community business investments.
Debt Division: Prenuptial agreements not only can detail how assets will be divided, but also how debts will be split. This should encompass debt for credit cards, student loans and businesses.
Spousal Support: Most people who figure they will earn a lot of money as a couple do not want to pay spousal support after divorce, so they will want the prenup to have a "no alimony" clause, specifying that neither spouse will pay the other spousal support. However, if your spouse-to-be does not have the same high income potential, a "no-spousal support" clause may not pass legal muster, so a reasonable approach would be to agree to a fixed amount, such as what would be paid by a low-paying job.
Lifestyle Clauses: These are agreements between spouses that are not enforceable in California courts. Other states have upheld them, but many California judges have ruled that they are against public policy. The couple can write up their joint financial lifestyle, but they can’t include anything that addresses child custody or child support.
Attorneys Fees and Costs: Because California does not require that attorneys represent both parties in the creation of a prenup, attorney fees and costs generally are divided between the two spouses.
Template for Creating a California Prenuptial Agreement
The following is a sample template for a California prenuptial agreement to give you an idea of what a prenuptial agreement can look like and the main elements that it is likely to contain.
PRNUPTIAL AGREEMENT BETWEEN HUSBAND AND WIFE
This is a Prenuptial Agreement between "Husband" and "Wife."
1. PREMARITAL RIGHTS
It is the intention of the parties hereto that in the event of a divorce, legal separation, or death, that the premarital rights of each and every party shall be fully protected as provided herein.
2. SEPARATE PROPERTY
The property of both Husband and Wife, respectively, shall remain the separate property of each, subject to no right, title, interest or claim of the other by right of dower or curtesy or by virtue of any state or federal laws.
3. CONFLICTING LAWS
This Agreement shall be governed by the laws of the State of California.
4. FULL DISCLOSURE
The Husband and Wife agree that at the time of the execution of this Prenuptial Agreement that full and complete disclosure of assets and liabilities of the Husband and the Wife have been made to each other.
5. PARTIAL INVALIDITY
This agreement is intended to apply generally in all instances possible. If for any reason any paragraph of this agreement, or a portion of any paragraph is determined by any Court or statutory authority to be invalid or unenforceable, the remaining sections and clauses shall be deemed severable and independent and enforceable to the fullest extent allowed by law .
6. NO RESCISSION OR MODIFICATION
The parties further agree that this Agreement may not be rescinded or modified except by an instrument in writing signed by the parties hereto.
7. PARTIES TO PREMARITAL AGREEMENT
The name and address of the parties to this Premarital Agreement are as follows:
This Premarital Agreement is executed in duplicate originals with each party having received one.
Date: ______________________
Date: ______________________
Signature of Husband
Signature of Wife
ACKNOWLEDGMENT
State of California
County of _______________
On ____________, 20____, before me, the undersigned, a Notary Public, personally appeared ________________ husband, and _______________ wife, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. Signature: ___________________
(Seal)__ Notary Public in and for the State of California
Tips for Modifying Your Prenup
It is paramount that prenuptial agreements be tailored to meet the specific needs of each couple who decides to execute one. Most couples have unique situations and interests that need to be addressed and this is one of the most important reasons to consider hiring an attorney to draft your agreement. Having a one-size fits all prenuptial agreement can leave out important information or protections that are specific to your situation or needs.
For example, pre-approval of an asset as separate property and/or the reimbursement of community funds spent on a separate property asset is not something you want to leave out of your prenuptial agreement if it is important to you. Only an experienced attorney who focuses on providing prenuptial agreements to clients will be able to fully assess your individual circumstances; provide the appropriate terminology in your prenuptial agreement to fully protect your separate property from being converted into community property during the marriage; and draft your prenuptial agreement to specifically address reimbursement of community funds if needed. A one-size fits all prenuptial agreement would not address these issues that are unique to your situation, and therefore may be the wrong solution for you.
Considerations for Personalizing a Prenuptial Agreement
Below are some things to consider when tailoring a prenuptial agreement to your specific circumstances:
Professional Help & Resources
When it comes to prenuptial agreements, it is vital to have an experienced attorney providing guidance on such a complex and life-changing decision. An attorney will provide the necessary legal assistance to discuss, draft and revise a prenuptial agreement. They will also ensure that all of the requirements of California law are met, so that any future challenge to the agreement will have little chance for success. You should not use a prewritten online template from the internet. While drafting a prenuptial agreement may be simple under California law, if an agreement is not drafted properly, under very limited circumstances, the entire agreement can be rendered null and void. Having a skilled attorney on your side can help protect you from this potentially devastating outcome.
The right attorney can also assist you in composing a suitable and enforceable marital settlement. A prepared and experienced attorney can help protect your assets throughout your marriage , as any prenuptial agreement created by that attorney will be unique to your situation and circumstances. Once a prenuptial agreement is properly drafted, it is likely that the agreement will be upheld in the event of divorce.
Additionally, when seeking out an attorney to draft your prenuptial agreement, be sure that you choose a certified family law specialist. By definition, these attorneys have focused over 25 percent of their practice on family law matters for at least five years and attained additional certification. The State Bar of California certifies attorneys specializing in family law, or as a family law specialist, according to stringent criteria.
However, it is often difficult to find a certified attorney who is a certified family law specialist, as fewer than one percent of all California attorneys are certified by the State Bar as family law specialists.
