When you are getting married, it is important to consider how your finances will change. Any property that you mingle with your spouse’s will become community property, which is all divided down the middle if you get divorced.
If you have substantial assets, high-value investments, or business interests, you may benefit from a prenuptial or postnuptial agreement. These can help you keep your assets in the event that you get divorced by keeping them out of the community property pool. For help creating a prenup or postnup today, call the Carpinteria prenuptial agreement lawyers at the Law Offices of Bamieh and De Smeth. Our number is (805) 585-5056.
What Does a Prenuptial Agreement Do?
A prenuptial agreement sets out rules for property division before the wedding. This means that, going into the marriage, each party has a clear understanding of what property will be mingled as community property and what property the individual spouses will keep as individual property. This is important for protecting certain assets that you may not want to share 50/50 with your spouse.
In a California divorce, all property that is acquired during the marriage or intentionally comingled is divided 50/50. This is known as “community property,” and each spouse takes an equal share of this property. This is in contrast to “individual property,” which consists of the assets each party brings to the marriage and gets to keep if they get divorced. When two people live together and share finances, most individual assets become shared, community property subject to 50/50 division upon divorce. A prenuptial agreement lists what property should be kept separate so that it is not shared or lost if a divorce occurs.
Prenuptial agreements are rigid contracts that set up the terms, up front, before the couple is married. Because of this, these agreements are often enforceable as long as both parties have full information and a fair chance to review the agreement. Some divorce cases reveal that the wealthy party failed to fully disclose finances, lied about terms of the agreement, or used threats to coerce their future spouse into signing a prenup. Those prenups are often thrown out, leaving the parties to each take half of whatever the law, not the agreement, defines as community property. Otherwise, the prenuptial agreements are usually strong, enforceable documents.
How is a Postnuptial Agreement Different than a Prenup?
The clearest difference between a prenuptial agreement and a postnuptial agreement is when the agreement is formed, but there are other some effects that stem from this difference.
While a prenuptial agreement is formed before the spouses marry, a postnuptial agreement can be formed any time after the wedding date, allowing flexibility. Some postnuptial agreements are signed soon after the wedding, while others may be formed years into a marriage. If your financial situation changes drastically and you want to ensure that certain assets, investments, or business holdings remain yours after any potential future divorce, you can form a postnuptial agreement at any time. These can also be helpful to create at the time of divorce as part of a divorce settlement.
Since a prenuptial agreement is a contract, both parties can agree to change or abandon it during the marriage. This may require forming a postnuptial agreement to amend the last contract.
Because a postnuptial agreement comes after the marriage already begins, it has some benefits over a prenup. Many people believe that a prenuptial agreement is too demanding and consider it unfair to refuse to get married until after a prenup is signed. Postnuptial agreements can be an excellent compromise which allows one spouse to get married without the prenup looming over the ceremony yet still helps the other spouse protect significant assets. Postnups can also account for things that may have been forgotten or excluded from a prenup.
Are Prenuptial Agreements Fair?
Many consider prenuptial agreements very unfair. While these agreements do tend to protect one spouse over the other, they can include terms that make them much more even-handed and actually beneficial to the other party.
First, prenuptial agreements are usually used to protect the wealthier spouse’s assets. However, this is not always a selfish or unfair choice. In many cases, small business owners use prenuptial agreements to ensure their business ownership is not divided upon divorce, which is a responsible business decision.
Prenups often have terms that help the less-wealthy spouse, as well. The general terms of a prenup help them understand what they would be entitled to if a divorce occurs, simplifying the divorce process and allowing them to start planning for the future if they decide they want a divorce. These agreements can also include things like “infidelity clauses” which would grant the spouse additional assets or set aside the agreement entirely if their spouse is unfaithful. This gives them additional recourse if they were harmed, which is important since California only allows no-fault divorces.
Call Our Carpinteria Prenup and Postnup Lawyers Today
If you are considering a divorce and you have high-value assets, a large investment portfolio, or ownership of a business, you should consider signing a prenuptial or postnuptial agreement. The Carpinteria prenuptial and postnuptial agreement attorneys at the Law Offices of Bamieh and De Smeth may be able to help. Contact us online or call us today at (805) 585-5056 to schedule a free legal consultation.