What Can and Cannot Be Included in a Prenup in California?
By now, it’s likely you have heard the figure that about half of all marriages in the United States end in divorce. Couples do not enter matrimony thinking about divorce. Yet, some choose to enter into prenuptial agreements to protect their property and assets in the event that a divorce occurs.
If a wedding day is in your near future, you and your partner have a good chance of living happily ever after, but you need to prepare in case life doesn’t go as you plan. You need a prenuptial agreement (prenup). Prenups have a stigma that associates them with wealthy people and some do not look upon them kindly, often as a result of how these agreements are portrayed on television, in movies, and throughout popular culture. It’s not true that prenups are one-sided agreements meant to deny a spouse of their fair share in the event of a divorce.
This quick guide provides more background about prenups, common reasons couples choose to create a prenuptial agreement, and things you can and cannot include in your California prenuptial agreement.
What Is a Prenup?
A prenuptial agreement is a legally binding document that details how you and your spouse will divide your property in the event you decide to divorce. Choosing not to create a prenup prior to marriage can make property division a challenge during a divorce. You can think of a prenup as divorce insurance that protects you and your spouse’s property and assets during a divorce, and also prevents conflicts that often accompany financial issues during the divorce process.
When Should You Get a Prenup?
Prenuptial agreements can be beneficial for any couple getting married, but some situations make it crucial for you to create a prenuptial agreement with your future spouse. Examples of scenarios where prenuptial agreements can be helpful include:
- You have been married one or more times before.
- You and/or your future partner has children from a previous relationship.
- One of you makes far more money than the other.
- One or both of you own a business.
In the above situations, you may want to protect your property and assets in the event of a divorce. Without a prenup assets from a previous relationship are typically carried over into your current marriage. This includes cash, but also property, vehicles, and other high-ticket items.
Things You Can Include in Your Prenup
You can include a wide variety of items in a prenuptial agreement. They include:
Allocation of Current and Future Earnings
Your prenup can establish how you allocate your earnings within your marriage and future earnings in the event of a divorce. This is especially common when one partner has accumulated a great deal of wealth prior to marriage.
Allocation of Debt
Some couples accumulate a fair amount of debt during marriage. Without a prenup, you could be forced to pay debt your spouse acquired, or vice versa. Instead, a prenup allows you detail who pays what when you separate.
Allocation of Property
Deciding who should get what personal property and real estate after a divorce is one common use for prenuptial agreement. Your agreement can detail how you will split your house. Maybe one of you gets the primary residence and the other takes a vacation home. Or, you might choose to sell the home and split the proceeds. You can also spell out details related to who gets vehicles, boats, expensive jewelry, artwork, and more.
Allocation of Inheritance
When partners have children from a previous marriage, they often include inheritance provisions in their prenup. For example, if your spouse dies while you are married, you are entitled to inheritance because of community property laws in California. You might choose to name your children as partial or full beneficiaries.
Small Business Protection
Small business owners pour blood, sweat, and tears into a business to get it up and running and turn a profit. Additionally, business owners sometimes have investments, business partnerships, and debts with people outside the marriage. You and your future spouse can use a prenup to establish who gets what in the event of divorce, protecting the business in the event of a divorce. This can include establishing that the original owner keeps the business and all profits after a divorce. It might also grant a percentage of profits to the other partner.
Child Support Protection
If you receive child support as a result of a previous relationship, you can protect that cash to ensure your children are still provided for in the event of divorce. Similarly, you can use a prenup to ensure anything you or your spouse purchased for your respective children stays with them. Your prenup can also include certain financial aspects if you and your spouse have children together. The prenup can provide compensation for college tuition or extra money to support an adult child with special needs.
Establish Terms of Spousal Support
Most couples include terms of spousal support in a prenuptial agreement. For example, the higher-earning spouse will agree to pay a certain amount of money if the marriage lasts for a certain number of years. In other cases, the higher-earning spouse might agree to pay his or her partner a lump sum payment after a divorce.
You Cannot Include Child Custody/Child Support in Your Prenup
Prenups can include a wide array of terms, and permit more than they prohibit. Yet, you can, under no circumstances, include anything in your prenuptial agreement that deals to child custody or child support. Children are not your personal property, so you cannot negotiate them in an agreement. California courts make child support and child custody agreements with the best interest of children in mind.
Contact Pedrick Law Group Today to Discuss a Prenup
It’s in the best interest of you and your spouse to plan for worst case scenario, even though you might not experience it. An experienced family law attorney can help you draft a prenuptial agreement. If you’re already married. Don’t worry. It’s not too late. You can also enter into a post-nuptial agreement, which is very similar to a prenup. Contact Pedrick Law Group today online or at 818-325-3934 for more information.