Prenuptial Agreements

Prenuptial agreements have a bad reputation. Many are unconformable having extensive financial discussions and disclosures before the big day.

Instead, a prenuptial agreement should be viewed as the contract that sets the financial terms of the new business partnership formed by the marriage. It also creates a snapshot in time of what the respective separate property of the spouses were at the time of marriage.

Key provisions typically surround spousal support, also known as alimony, the identification of and use of separate property brought into the marriage, and characterization of profits and wealth from the operation of a separate property business after the marriage. 

Some provisions like child support limitations and custody provisions cannot be included. Also, the prenuptial agreement cannot be viewed as ‘unconscionable,’ and cannot encourage divorce. It is easier to attack a prenuptial agreement with recent changes in case law, so additional layers of protection need to be included to make the prenuptial agreement more iron-clad. All prenuptial agreements are subject to attack at the time of filing for divorce. The less ‘unconscionable’ a prenuptial agreement is, and the more it is a rationally based business decision, the easier it will be to later uphold in court if the other spouse seeks to attack it in a divorce process.

Each spouse should have an attorney representing them, and the process needs to be started well in advance of the wedding with specific formalities required by California law. You should consider making sure your spouse has quality representation so the prenuptial agreement is less likely to be subject to a legitimate attack if a marriage ends in divorce instead of Death.

Each new marriage will end in one of two ways … either with Death or divorce. Either capital letter D - Death, or lowercase d - divorce. Trust and estate planning should also be done with the prenuptial agreement with the assistance of an outside trust/probate attorney chosen by the client.

No two marriages are alike. So the default divorce provisions of the Family Code may not fit your marriage. If you are happy with the default divorce provisions provided by California (or the state you divorce in), then do not get a prenup. Some feel that the amount of spousal support ordered under the Family Code is too high, or that spousal support should be excluded altogether. Others want a basis for spousal support from their wealthy spouse who has no ‘income’ and in a marriage that will likely generate little to now community property (as can occur when one spouse brings tremendous wealth into a marriage), or want to prevent spousal support litigation by setting a spousal support amount in the prenuptial agreement (but in a way that does not encourage divorce).

Having financial discussions before marriage is very beneficial to ensuring a successful marriage. And, if it ends in divorce, then the process can be streamlined and valid separate property claims preserved. A good prenuptial agreement should save the spouses attorney’s fees in the event of a divorce.

I have analyzed many prenuptial agreements that were not worth the paper they were written on, and many which were done without the required formalities of California law. In the event of divorce, a bad prenuptial agreement will likely result in litigation over the prenuptial agreement. If you get a prenuptial agreement, make sure you and your spouse hire competent family law attorneys for the drafting and review.

The best part of this process is the ‘signing ceremony’ which should be scheduled well before the bachelor party, or the bachelorette party. This is an early step, not the last step, in the process of forming a hopefully life-long marriage that will never need this prenuptial agreement.

If you would like to discuss being retained to either draft or review your prenuptial agreement, please set up a consultation. Please note that our firm regularly declines being retained for a prenuptial if a wedding is less than one month away.