In California, premarital agreements (informally known as prenups) can address a variety of financial areas for a couple. In my previous blog, Prenuptial Agreements are not always One-Sided, I used the fictional couple, Fran and Max from The Nanny, to illustrate how prenups work well to address business debt. But what else can a prenup cover?
First, it is worth mentioning that a prenup must be in writing and signed by both parties, pursuant to CA Fam. C section 1611. And what is a prenup, exactly? It is a private contract spelling out mutual promises made between the two individuals. It enables the couple to hold one another accountable to the promises they made before marriage, should they ever be faced with divorce proceedings.
Prenups almost always contain a list of each person’s assets, and each person’s debts. Assets can include bank accounts, homes, businesses, and debts will often reference credit card balances, student loans, and mortgage notes.
Many prenups will describe the rights one person has to a particular property, and the obligations expected by the other party toward that same property. For instance, a wife could own a home, and have her new husband promise not to interfere if she one day sells that home and reinvests the proceeds into a separate account, just for her use. They could go onto promise that, if they ever divorced, the house or account with money from the house, should be assigned back to her alone.
If a someone wants a prenup in order to forbid alimony, the couple should each seek out their own lawyer to represent them. Although hiring an attorney is not a mandatory component of creating a prenup, CA Fam. C section 1612(c) has complex requirements about waiving spousal support (or alimony.) In such a provision, the document should address whether one person makes significantly more than the other, and what type of lifestyle they both lead (known as the marital standard of living.)
There is quite a bit of misunderstanding about the purpose of a pre-nuptial agreement. Some believe in a superstitious notion that preparing a prenuptial agreement can make a future divorce more likely. On the contrary, taking the time to review and understand the legal ramifications of marriage encourages the spouses to be to not only understand this sacred union, but to value it in a way they may not have otherwise considered. Having a pre-nuptial agreement in no way means that divorce is on the horizon, it is an opportunity to be transparent with one another about finances. Prenuptial agreements should be synonymous with preparing for the gravity of such a meaningful and impactful decision to enter into a marriage with another person.
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