For many couples, prenuptial and postnuptial agreements can limit the potential acrimony in the event of a divorce and settle questions about the future. A solidly drafted agreement can reduce the costs of litigation in the event of a divorce and improve the chances for a couple to control the disposition of their property, even if California law would have provided for a different outcome. A prenuptial agreement is signed before a marriage, while a postnuptial agreement is signed after a couple is already married. At the Law Offices of Nicola Fitzgerald can help individuals draft and finalize a sophisticated agreement. We know how to reach an arrangement that complies with California law and specifically addresses how all your marital assets will be handled in the event of a separation or divorce.
Constructing Valid Prenuptial and Postnuptial Agreements in California
Prenuptial and postnuptial agreements are contracts that must be in writing and signed by both parties. California gives both prospective spouses and existing spouses broad latitude to arrange their marital affairs and create a plan to establish clear financial boundaries and deal with the possibility of divorce.
Using a prenuptial agreement, prospective spouses can designate assets as separate property that might otherwise be characterized as community property, or vice versa. Prospective spouses can also specify the character of future earnings, pensions that have not vested, and intangible assets like stock options or goodwill. They can also potentially agree as to the ownership of their residence or future real estate that is purchased, even if their agreement differs from California law.
A valid prenuptial agreement can also specify the amount of spousal support to be paid, provisions of property in wills, the right to sell or dispose of property, and the ownership of life insurance benefits. In California, a spousal support provision will not be enforced unless the person whose receipt of spousal support is waived or reduced had independent counsel. It also will not be enforced if it is unconscionable. For example, a prenuptial agreement cannot change child support amounts to be owed or nonfinancial obligations during the marriage, such as frequency of sex or household chores.
Sometimes married spouses want to enter into a legally binding commitment about their property even if they did not consider a prenuptial agreement. Spouses have significant freedom to do this in California. A postnuptial agreement can change the character of the property and determine whether income, retirement assets, or a business are community property or separate property, regardless of what California would otherwise require. Postnuptial agreements should be negotiated and drafted with care by attorneys who understand the potential pitfalls of drawing new boundaries in an existing marriage.
Married spouses owe each other fiduciary duties that are equivalent to the duty of a trustee towards a beneficiary. For example, this means that there is a presumption the agreement is invalid if the character of property undergoes a transmutation during the marriage due to a post-nuptial agreement to the disadvantage of one spouse. Someone who is disadvantaged must fully understand and agree to the change, and therefore it is important for that individual to be represented by counsel.