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ENFORCEABILITY OF PRENUPTIAL AGREEMENTS

In 1976 the California Supreme Court in the landmark decision of In Re Marriage of Dawley in which California’s Supreme
Court recognized that prenuptial agreements that contemplated divorce were not invalid per se and against public policy
but should be reviewed on a case by case basis to determine if they promoted marital breakdown. In 1986 California took
another important step in recognizing the validity of prenuptial agreements by adopting its version of the Uniform Premarital
Agreement Act which was further amended in 2002. This Act is now adopted in twenty four other states. The current version
of California’s Premarital Agreement Act is contained in Family Code sections1600-1617.

In order to ensure its enforceability any attorney drafting a prenuptial agreement (also referred to an antenuptial or
premarital agreement) should be familiar with the provisions of California’s Premarital Agreement Act and the case law.
For prenuptial agreements executed after January 1, 2002, the Family Code provides that an agreement will not be
enforceable if either (1) the agreement was involuntary or (2) the agreement was unconscionable and there was no
adequate disclosure or (3) the agreement violates public policy.

The following general conclusions can be learned from these requirements which are discussed in more detail below:

• Both parties should be represented by independent counsel
• Never wait until just before the wedding to sign a prenuptial agreement
• Always provide full, fair and reasonable disclosure of all income, assets and liabilities of both sides
• Ensure that the agreement is fair and does not leave one party without any means of support in the event of divorce

We take pride in efficiently representing clients throughout California who wish to enter into prenuptial and postnuptial agreements. The entire process can be handled over the phone. If you would like to speak with one of our attorneys, please fill out our potential client intake questionnaire or contact us at (949) 478-4401.

Initial telephone consultations are free of charge.

California Prenuptial Agreement: Top 3 Misconceptions

In California, property acquired during marriage is presumed to be community property, equally divisible in divorce. The exceptions to this are when property is acquired by gift, bequest, inheritance, or there is a prenuptial agreement in effect.

A prenuptial agreement is an agreement between prospective spouses in contemplation of marriage, to be effective upon marriage, that addresses present and future property rights.

Specifically, a California prenuptial agreement is used when a couple wants to avoid or modify the state’s community property law regarding assets already owned by each person, and to property and income acquired during marriage.

Misconception #1: Prenuptial agreements are unfair and unromantic.

In movies involving prenuptial agreements, one party is often trying to take advantage of the other party. The truth is, if a prenuptial agreement is very slanted in favor of one person, the other person will likely object to it during a divorce. Thus, attorneys drafting reasonable prenuptial agreements help their clients avoid problems in the long run.

In actuality, a couple working on a California prenuptial agreement is laying down rules for property and support in case of divorce. Prenuptial agreements are often used to preserve a person’s property rights.

Deciding how your finances will work before marriage may lead to a smoother marriage. Money is something many couples fight about, and it makes sense to discuss how the household finances will work.

As with any other partnership, two people would meet and formulate a plan for handling monthly expenses, financial obligations, savings, and other goals.

Misconception #2: A California prenuptial agreement is too expensive.

To quote a professional who recently got divorced and did not have a prenup, “They are expensive because they are worth it.” The reason prenuptial agreements cost thousands of dollars is that clients are paying for the attorney’s time in negotiating the terms of the prenuptial agreement, as well as the attorney’s signature approving the prenup.

Should a party ever contest the prenuptial agreement, the attorney will likely have to serve as a witness as to events concerning the execution of the agreement.

Misconception #3: Only really wealthy people need a prenup.

Anyone with significant income or with property or possessions valued at $10,000 or more should consider having a prenuptial agreement to protect his/her assets in the event of a divorce. Prenuptial agreements can protect an asset from becoming community property, divisible at divorce.

If a party has an asset that is valuable and would like to make sure he or she receives that asset in the event of a divorce, that person should consider a prenuptial agreement. California prenuptial agreements are commonly used by:

1. Two Professionals (e.g. they both have retirement plans and savings that they wish to preserve),

2. People Entering a Second Marriage (e.g. he or she would like to preserve assets for children from a prior relationship), and

3. People Who Inherit/Will Inherit, who would like to make sure the inheritance is preserved for future generations. Unlike an estate plan (e.g. will), prenuptial agreements take effect right away.

We take pride in efficiently representing clients throughout California who wish to enter into prenuptial and postnuptial agreements. The entire process can be handled over the phone. If you would like to speak with one of our attorneys, please fill out our potential client intake questionnaire or contact us at (949) 478-4401.

Initial telephone consultations are free of charge.

Six situations in which you may need a prenup

Disparate assets: If one party is coming into the marriage with a home and an investment account, the agreement can spell out whether those assets will be kept separate or how they’d be taken into account in the event of a split.

Disparate debts: Although young couples may have fewer assets to split,they may often have debts. If one party has significant obligations, the prenuptial agreement can keep the debts separate too.

Vastly disparate income: While earning more or less than your spouse generally isn’t an issue while you’re married, due to a presumption that both people share and give alike. But in the event of a split, a prenuptial agreement can set a limit — either a minimum or a maximum — on the amount the higher-wage earner pays or the lower-wage earner would get.

Second marriages: Prenuptial agreements can also dictate who pays which expenses for children from previous marriages. They also can outline how both partners’ assets will be split at death (as well as in a divorce).

Business ownership: If one or both parties have a small business, a prenuptial agreement is warranted. It protects the business’ assets and protects the non-owner spouse from potential business liabilities.

Inheritances: If you know you are going to come into some money or other inheritance assets, it is encouraged to be prepared to prevent the assets from being commingled with the marital assets to keep his or her ownership intact. Under California law,inherited property is seperate property however, depending on how its managed or commingled with marital assets,it can become community property. A prenuptial agreement can spell out how you maintain your separate interest in what you acquire and bring peace of mind to a family concerned about leaving an inheritance to an heir. The prenup can provide assurance the property will stay in the family.

We take pride in efficiently representing clients throughout California who wish to enter into prenuptial and postnuptial agreements. The entire process can be handled over the phone. If you would like to speak with one of our attorneys, please fill out our potential client intake questionnaire or contact us at (949) 478-4401.

Initial telephone consultations are free of charge.