Prenuptial Agreement Information 909-725-8199 Divorce & Prenup Lawyers

Prenuptial Agreements

A prenuptial agreement, or "prenup," is a contract between prospective spouses, entered into before marriage, that contractually binds the spouses to certain terms upon the date of marriage. The prenuptial agreement terms identify how the married couple will divide property and/or spousal support in the event of a divorce or death of either spouse. Without a prenuptial agreement, the family law court will divide property and assets acquired during the marriage equally, and award spousal support, if any, based upon a complex formula that takes into account many variables. See Community Property & Spousal Support.

Note: Statistics show that California couples that enter into a prenuptial agreement are more likely to remain married. Some marriage counselors believe that marriage is made stronger by the process of drafting a prenuptial agreement as it promotes early and healthy communication about financial issues and expectations in the relationship. Today, nearly twenty percent (20%) of California marriages are supported by a prenuptial agreement.

Important: Strict legal requirements apply to a prenuptial agreement in order to render the terms enforceable in court. For example, a prenuptial agreement is invalid unless the final draft is served on both sides at least seven (7) days before the prenuptial agreement is signed and at least ten (10) days before the wedding. Other strict legal requirements include, but are not limited to, the following: No unconscionable terms allowed in the prenuptial agreement (either at the time of signing or at the time of enforcement), independent lawyers must be used if spousal support is waived, the prenuptial agreement must be signed voluntarily, and more.

The following covers many of the common terms that are included in California prenuptial agreements.

Common Prenuptial Agreement Terms:

Spousal Support: A prenuptial agreement can set the amount of spousal support (alimony), if any, that may be awarded by a family law judge upon divorce of the spouses.

Warning: Any provision in a premarital agreement that attempts to waive spousal support is not enforceable if the spouse against whom enforcement is sought was not represented by an independent lawyer at the time the prenuptial agreement was signed, or, if the term regarding spousal support is unconscionable, at the time of enforcement. Without a prenuptial agreement spousal support is awarded, if any, based upon a complex formula that takes into account many variables, including the spoues' respective income, the length of marriage, the spouse's needs, and more.

Income Protection During Marriage: Prenuptial agreements can be used to protect income during marriage. Without a prenuptial agreement, income earned during marriage by either spouse equally belongs to both spouses, even if the spouses use separate banks accounts or earn different income.

Business Assets: Prenuptial agreements may predetermine the amount, if any, to which a spouse is entitled to the assets or income of a separately owned business. Without a prenuptial agreement, the family law judge can divide a business and/or the assets of a business equally depending on the circumstances of the case, even a business started solely by one spouse before marriage.

Inheritance Rights: A prenuptial agreement can be used to protect the inheritance rights of a child from a previous marriage. Without a prenuptial agreement, a child from a prior marriage can lose his or her inheritance rights, if any, to the living spouse's elective share right to community; this is true even if the dying spouse executed a will to the contrary.

Property: A prenuptial agreement may predetermine a spouse's rights to existing community property upon death or divorce. Property includes real estate, personal property, and intellectual property.

Note: Sometimes property can change its form after a prenup is signed. For example, a piece of land (real property) may be sold for cash (personal property). Prenuptial agreements are drafted to protect rights to property even if the property changes form. Without a prenuptial agreement, the couple may spend thousands of dollars in lawyer fees trying to trace the property from a changed or commingled form to its original form.

Pet Custody: Dogs, cats, and other family pets are considered property in a marriage and a prenuptial agreement may set out in advance which spouse will be entitled to possess and/or care for a dog or cat in the event of a divorce. Without a prenuptial agreement, a judge may use factors similar to the factors that are used in child custody cases to determine which spouse is entitled to take possession of the family pet. See Pet Custody.

Finance Management: Prenuptial agreements may spell out which spouse is entitled to manage the day-to-day finances of the marriage, or, which spouse will have the ability to sell, transfer, or encumber property or assets, including community property assets and debts.

Debt: Prenuptial agreements may explain which spouse is responsible for which debts, if any, that are incurred by either spouse, or both, before, during, or after marriage. Prenuptial agreement terms that cover debt are usually included when one spouse intends to continue his or her education or business during marriage, or when one spouse comes into the marriage with substantial preexisting debt. Without a prenuptial agreement, most family law courts, upon divorce or legal separation, will usually award community debt to the spouse who benefited from the debt, but a judge may also use equitable powers to award the debt to the spouse who can more easily afford the debt.

Estate Planning: Prenuptial agreements may include estate planning features, such as wills, trusts, and powers of attorney.

Retirement: A prenuptial agreement may predetermine the division, if any, of retirement benefits, such as any interest, vested or contingent, in a 401k, IRA, pension, CalPers, etc.

Note: Waiver of the right to any retirement benefit must be in writing and signed by the party against whom enforcement is sought, on separate and subsequent documents, in order for the waiver to be enforceable.

Jurisdiction: Prenuptial agreements may include the law that will control any legal issue not covered in the prenuptial agreement. This is especially important for couples who intend to move out of state during marriage or for couples who are concerned that the law might change in the future.

Prenup Duration: If a prenuptial agreement is not modified in some way it will be enforceable to the end of marriage, whether the end of marriage is by death or divorce. However, most prenuptial agreements include self-imposed time limits on the prenuptial agreement as a whole, or as to some portion of the agreement. A prenuptial agreement that ends in whole, or in part, at a certain time in the future, is said to contain Sunset Clause. A Sunset Clause is common in prenuptial agreements between couples who have dated for only a short period of time before marriage.

Terms Not Allowed in Prenuptial Agreements

Any term that attempts to control child custody, child support, or child visitation, is not allowed in a prenuptial agreement

Any term that violates public policy, such as a term that promotes divorce. For example, a term that allows for payment of money upon divorce is likely an unenforceable term as it promotes divorce.

Non-monetary terms, such as which spouse is going to take out the trash or wash the dog are unenforceable terms. Also, sexual promise terms are unenforceable.

Any term in a prenup that promotes a crime . For example, a term in a prenuptial agreement that predetermines which spouse will receive proceeds from the illegal sale of narcotics, is an invalid prenup term.

Modifying & Updating a Prenuptial Agreement

After marriage, a couple may modify their prenuptial agreement. The legal requirements to prenuptial agreements also apply to any modification, revision, or updating of the agreement. This includes the legal requirement that any waiver of spousal support (alimony) must be signed by an attorney at the time of the signing of the modified agreement.

Note: If a couple has not executed a prenuptial agreement before marriage they may nevertheless execute an intermarital, or post-marital agreement. See Postnuptial Agreements.

Also, sometimes a spouse would like to be more generous than what is written in a prenuptial agreement. If a spouse, during marriage, has given more to the other spouse than he or she is required according to the prenup it does not automatically waive all thee terms of the prenuptial agreement. To be safe, a restoration of rights term should be included in all prenuptial agreements.

Note: Some terms in a prenup do not become enforceable until some later action is complete, such as signing waiver documents for retirement after the prenuptial agreement is signed or recording the transfer of real property.

Breaking a Poorly Drafted or Invalid Prenup

Unfortunately, some couples might have their prenups broken due to a failure to follow very strict legal requirements in the drafting and execution of the prenup. To ensure a prenuptial agreement will stand against a spouse's effort to break the prenuptial agreement the agreement should be drafted by a lawyer familiar with the divorce and family law issues as well as California contract law. Never use a preprinted prenuptial agreement form without the advice of a divorce and family law lawyer.

For more information on California prenuptial agreements call the divorce and family law attorneys at Dorado & Dorado today for a free consultation.

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