Summer is now upon us, which means it is officially wedding season. If you’re getting married and unsure if you should get a prenuptial agreement, Aloha Divorce can make recommendations in line with your needs. Many people have heard about premarital agreements, also known as a prenuptial agreement or “prenup,” but assume it’s only for the wealthy; or if only one spouse wants to protect their own assets from the other spouse. This is not the case. Premarital agreements are made to protect both parties’ separate and community property rights and assets.
A prenuptial agreement is defined as a contract executed between prospective spouses in contemplation of marriage, fixing marital property rights and financial responsibilities upon consumption of the marriage. The contract then becomes effective upon marriage. See, e.g., Hogoboom & King, Cal. Practice Guide: Family Law, supra, pp. 9-57., 2015.
Marriage in California is treated as a business, and spouses are seen as equal partners. Your date of marriage marks the start date of your marital business. Everything you accumulate after that marriage date, regardless of whose name an asset or debt is under, is presumed to belong to the marital business and each spouse is presumed be to entitled to, or responsible for, one half. This concept is known as “community property.”
Having a premarital agreement circumvents the community property presumption and allows the prospective spouses to expressly agree how they legally categorize assets and debts as either community or separate property assets should they break up. Premarital agreements are, in essence, marriage insurance, where you get to set the terms of the policy. And like an insurance policy, the terms do not become effective unless the marriage ends.
A spouse’s separate property can eventually be mixed with community assets. Sorting out commingled property is tedious, expensive, and difficult to prove in court. Having a written agreement signed in advance will ultimately save a lot of time, heartache and money if your marriage unexpectedly fails.
Your premarital agreement is meant to protect both you and your partner. It protects spouses similar to the way that a car’s seat-belt protects its passengers. Why do you put your seat-belt on before you drive? Surely you don’t anticipate an accident to occur but the reality is that accidents do happen, as do divorces. Divorces are expensive and could take years. The more issues that exist, the more there is to fight about. If the issues are already addressed in a prenuptial agreement, the divorce becomes much simpler and faster to resolve. So if you are looking to protect you and your loved one be sure to take the necessary safety precautions before you go on your journey together.