As you plan for your upcoming wedding, you are probably too excited about getting married, that you cannot imagine anything going wrong in the future. Nobody enters into matrimony with the intention of getting a divorce later. However, the reality is that approximately half of America’s marriages end in dissolution.
Marriage is not only emotional but it also involves financial responsibilities. Though the idea does not sound very romantic, it is prudent to consider the possible outcomes of your marriage, whether positive or negative. This includes a plan of action in the event of irreconcilable differences between you and your spouse. It is easier to put in place a formula for apportioning your assets and liabilities when things are still rosy.
To mitigate contention over assets and liabilities in case of divorce, a San Diego Family Law Attorney will assist you in writing a prenuptial or a postnuptial agreement. Our clients are majorly based in San Diego, CA; but are available to help you with any family law matters if you are located in any neighboring cities.
What is a Prenuptial or Postnuptial Agreement?
A prenuptial agreement, also known as a prenup, is a contract signed between you and your future spouse before marriage. It details your financial and property rights, and responsibilities should a separation, divorce, or death arise. If you are wealthy, you can utilize a prenuptial agreement to protect your assets. In addition, you can use a prenuptial agreement to safeguard family businesses and heirlooms. In California, a prenuptial agreement becomes legal once it is created.
A postnuptial agreement, also known as a postnup, is a contract signed between you and your spouse after marriage. Similar to a prenuptial agreement, it is used to define matters of separate property, rights to family property or businesses, and financial responsibilities. The need for a postnuptial agreement may arise due to your spouse’s disreputable behavior or if you had no time for a prenuptial agreement before the wedding. A postnuptial agreement can assist you to resolve marriage issues concerning inheritances, assets, and finances. In California, a postnuptial agreement is not legitimate until a court validates it.
What are Prenuptial and Postnuptial Agreement Laws?
These are laws outlining the rules you must adhere to when writing a prenuptial or postnuptial agreement. If you intend to marry or are married, you are free to enter into legal contracts with your partner regarding assets, liabilities, and other financial responsibilities. Prenuptial and postnuptial laws dictate the specifics of what you can or cannot include in the agreements.
Similar to other sections of marital law, prenuptial and postnuptial agreements are subject to state law. In determining your case, a judge will often be willing to alter the agreement to protect a depraved party. The agreement may also be held void if it violates public policy or has provisions that are illegal.
How do Prenuptial Agreements Differ from Postnuptial Agreements?
The major difference between prenuptial and postnuptial agreements is the timing. A prenuptial agreement is signed before marriage and becomes legal upon signing, even without the wedding ceremony. A postnuptial agreement is only signed after the legal wedding takes place, can be signed at any time during the relationship and is validated by a judge.
While both agreements outline the course of action after the marriage is dissolved, a prenuptial agreement will safeguard your assets from becoming marital property. On the contrary, a postnuptial agreement cannot protect your assets once they become marital property. In the event of a divorce, you and your spouse have equal claim to the marital assets and liabilities. A postnuptial agreement can only provide a safety measure to protect as many of your assets as possible in case of a separation.
What are the Legal Requirements for Prenuptial and Postnuptial Agreements?
Both prenuptial and postnuptial agreements are used to protect specific aspects of separate and marital property in case your marriage is dissolved. Usually, the details are more significant to the wealthier party, but the legal stipulations are crucial for both of you. Since the agreement is between two people with different aspirations, there are some basic requirements to ensure the validity of the agreements. Failure to comply with any of these stipulations could render your agreement invalid in part or as a whole.
Before signing a prenuptial or postnuptial agreement, you must disclose in full all information regarding all the assets, liabilities and other financial responsibilities that you own separately or as a couple. This information is vital in determining separate property and obligations, and the extent of entitlement to marital assets and liabilities. If you or your partner either falsifies or withholds information, your contract will be invalid.
A prenuptial or postnuptial agreement must be written and signed by you, your partner and your independent lawyers. Oral agreements or those notarized by a single lawyer representing the couple are not enforceable. Having separate lawyers is necessary to protect your individual interests. The agreement must also be all-inclusive and equitable. This is especially enforced to ensure that your postnuptial agreement is not exceptionally discriminatory against you or your spouse.
You and your partner must voluntarily sign the prenuptial or postnuptial agreement. You cannot be threatened, coerced, deceived or physically forced to sign a prenuptial or postnuptial agreement. The document is invalid if either of you was pressurized to sign it by the other, their attorney or their family. Additionally, there must be sufficient time for you to deliberate over the provisions of the contract before signing it. The agreement may not be valid if your partner asks you to sign the papers quickly without reading or as part of other documents. California law requires a waiting period of at least seven (7) days for you to read and evaluate the agreement or have it evaluated by a lawyer prior to signing it.
A prenuptial or postnuptial agreement must be properly executed and in line with California state laws. It is subject to the family code in the state laws and cannot be validated if it contains terms that violate any state law. These include the timings of the agreement during the relationship and scope of content. A prenuptial agreement is only valid if signed before marriage and cannot include issues of child support, while a postnuptial agreement can only be signed after marriage. However, a judge may opt to strike out illegal provisions and enforce the rest of the contract.
At the time of enforcement, a judge will closely examine your document for unconscionability: An agreement is described as unconscionable if it is unfair or particularly biased towards the party that has better bargaining power. The agreement cannot include provisions that are extremely unfair that in case of a divorce, one of you encounters economic hardships while the other thrives. Even if you both agree to the terms of the agreement, a judge cannot enforce an unconscionable agreement.
What Can You Include in Prenuptial and Postnuptial Agreements?
Prenuptial and postnuptial agreements may cover diverse issues and will be enforceable as long as they do not violate state law. These agreements generally deal with rights and obligations to property that you own, and the choice of law under which the agreement is constructed. They include your rights to manage, control or dispose of property in case of disability, divorce, separation or death. They also include the writing of a will or a trust to execute the provisions of your agreement, and rights to possession and disposition of benefits from life insurance policies.
In prenuptial agreements, you can differentiate your separate property from marital property. In the absence of a prenuptial agreement, all property you own with your spouse becomes community property and is split on a 50/50 basis in case of divorce or death. Creditors can also use your marital property to recover your spouse’s debts. However, you can create a postnuptial agreement to modify this formula. You can include provisions on controlling your debt liability, management of mortgages, joint savings accounts, loans, household bills, credit cards, separate businesses, income and deductions, tax returns and retirement benefits.
As part of protecting your estate, you can combine prenuptial or postnuptial agreements with a will and a trust to provide for your children from prior relationships. The same can be used to keep your family heirloom within your birth family. Although prenuptial and postnuptial agreements are mainly used to determine asset distribution in case of a divorce or death, you can include provisions that could result in gain or loss of specific assets.
What Cannot be Included in a Prenuptial or Postnuptial Agreements?
Prenuptial and postnuptial agreements cannot include provisions on child custody, visitation or support. These are matters of public policy; therefore, the court determines them based on the best interest of the child. In addition, waiver of your right to alimony cannot be included in the agreements. The judges determine spousal support based your financial circumstances at the time of divorce and not at the time of inception of the agreement.
Prenuptial and postnuptial agreements are subject to state law. You, therefore, cannot include provisions for anything illegal. At the same time, you cannot include provisions that encourage divorce. Judges will scrutinize your agreements to ensure that no provision offers you a monetary incentive for divorce.
Prenuptial and postnuptial agreements can only detail financial issues. Other personal or domestic matters should not be included. If you need a written agreement on such issues, you can have a separate document which cannot be enforced by a court.
When Can Prenuptial and Postnuptial Agreements Become Unenforceable?
Judges recognize your ability to enter into contracts and will enforce your prenuptial or postnuptial agreement when necessary. While prenuptial agreements are governed by The California Premarital Agreement Act, postnuptial agreements are governed by California contract law. Based on provisions in these laws, your agreement may not be enforceable in some situations.
Your agreement will not be enforceable if either of you did not sign it voluntarily. If you are receiving the contract, you must have the legal capacity to sign, wait a minimum seven (7) days before signing and sign without duress. Moreover, each of you must be represented by an independent counsel to avoid a conflict of interest. Before signing the agreement, you are entitled to full disclosure of your rights, obligations, and terms of the agreement. If you are not proficient in English, the agreement has to be translated to your native language. In spite of these conditions being met, the court will scrutinize the agreement for unconscionability at the time of enforcement and not at inception.
Because state law supersedes prenuptial and postnuptial agreements, they cannot be enforced if they include provisions that are illegal or violate public policy. The agreements must adhere to all relevant laws concerning inheritance, the division of property and child support, visitation and custody. Provisions related to domestic services, child-rearing, and those that encourage divorce are unenforceable.
In California, postnuptial agreements are occasionally complicated by the fiduciary nature of marriage under California law. The judges will, therefore, examine your agreement rigorously, to ensure that there was full disclosure of monetary information prior to signing the agreement.
What are the Pros and Cons of Prenuptial and Postnuptial Agreements?
Due to the fact that marriage is emotional in nature, the pros and cons of prenuptial and postnuptial agreements are both emotional and financial. Since finances are a major cause of divorce, discussing financial matters with your spouse in advance can eliminate conflict in the future. The major benefit accrued from a prenuptial agreement is the opportunity to document and protect separate property from marital property. This is especially significant if you are wealthy, were married before or have children from a previous relationship. It protects your financial assets including businesses and organizes financial decision making and sharing of responsibilities.
Prenuptial agreements are a useful tool for protecting yourself from assuming your spouse’s debts as well as compensating you in case you sacrificed your career for the marriage. In case of a divorce or death, a prenuptial agreement helps you avoid court intervention in property distribution, lengthy court proceedings and conflict.
Despite these benefits, prenuptial agreements have some drawbacks. From the emotional point of view, discussing the possibility of divorce and financial distribution before marriage is not romantic. Your partner may interpret a request to sign a prenuptial agreement as a sign of mistrust. Furthermore, the timing may be wrong because, in the days preceding the marriage, you may be too excited to imagine a divorce or death, or to be concerned about financial responsibilities. While prenuptial agreements can be customized to meet your specific needs, they are intended to cover financial matters only and cannot include provisions on child custody and support, or other personal preferences.
Without a prenuptial agreement, a postnuptial agreement can define how marital property would be distributed in case of death or divorce, and ensure that your children from previous relationships are entitled to designated assets. Since it can be done at any point in the marriage, there is no risk of killing romance in the honeymoon phase of the marriage. Before marriage, some fiscal issues seem inconsequential but may become burdensome after the honeymoon. Discussing finances may provide an avenue for you to openly converse with your spouse which could be beneficial to your marriage.
Once you are married, you have better insight into your interests regarding property and finances. With time, you may experience sickness, disability, career changes, and varied financial circumstances. Your spouse may incur significant debt or make irresponsible fiscal decisions, or you may have left employment to care for young children. In all these scenarios, a postnuptial agreement can help you secure your financial resources in case of a divorce.
Despite the many benefits, postnuptial agreements have a downside. If you do not introduce and communicate the idea delicately and in a sensitive way, it may cause problems especially if you can’t reach a compromise with your spouse. Though it serves as a safeguard, it may appear as a setup for divorce particularly if it is drafted after a distressing occurrence like infidelity. Additionally, a postnuptial agreement may make you feel more entitled if you have a larger income or victimized if you earn less.
If you are considering a legal separation or divorce, a postnuptial agreement can be used as a final attempt to safeguard your assets. It may also help reduce legal expenses by streamlining asset division and alleviating potentially lengthy divorce proceedings. However, court decisions are not subject to such provisions. Finally, postnuptial agreements are only validated by the courts. Even when you agree to the terms of the contract and voluntarily sign it, the judge reserves the right to legalize it. The agreement, therefore, cannot guarantee any future outcomes.
Find a Family Law Attorney Near Me
California has laws on divorce and property that apply to all married couples. You can use a prenuptial or postnuptial agreement to amend the laws to correspond to your views on finances as a couple. Call a San Diego family lawyer at 619-610-7425 to guide you in navigating through this process in your best interest.
