California law recognizes prenuptial and postnuptial agreements in California as valid and enforceable when certain legal requirements are met. These agreements are typically used to modify how certain property rights are interpreted so that the parties do not become subject to California’s default property laws.
A prenuptial agreement is a legal agreement between fiancées that is executed before the parties get married. The marriage is contemplated as part of these agreements. However, prenuptial agreements in California do not have to be supported by consideration, meaning that the parties are not required to give up a right or interest in order for the agreement to be valid. Prenuptial agreements may be implemented for one or more of the following reasons:
- To protect property for children from a previous relationship
- To maintain a family business and ensure that it stays in the business
- To limit the other spouse’s amount and value of assets that he or she retains in the event of divorce or death
- To ensure that spousal support would be paid in the event of divorce
- To make property ownership adjustments that have tax advantages
Provisions in Prenuptial Agreements
Prenuptial agreements can address a number of issues, such as:
- Whether income will be treated as a community or separate asset
- How to classify certain property and which property will not be considered community property
- How property is divided upon divorce or separation
- Whether a spouse will pay spousal support and in what amount and for what duration
- How property is treated if one spouse dies
- Which spouse is responsible for marital debts
The parties have broad discretion as to what the agreement can consist of. However, the parties cannot include language that limits child support. Additionally, the parties cannot have an agreement that requires an illegal act or violates public policy.
A postnuptial agreement can change separate property into community property or vice versa and designate how property that is in the acquired in the future is classified. It can also define the classification of income as either separate or community property. Postnuptial agreements allow spouses to collectively determine important property rights and classifications to avoid the default findings by state law.
There are certain provisions that are not legally enforceable. For example, California law does not recognize provisions regarding a waiver of child support or provisions related to child custody.
Legal Requirements for Prenuptial Agreements
Prenuptial agreements in California must meet specific legal requirements. These agreements must be in writing. They must be voluntarily entered into. If the agreement was made due to physical force, coercion, threats or deception, it can be invalidated by a court when a party is trying to enforce it. Each spouse must be represented by independent legal counsel or expressly waive independent counsel. Additionally, the party should have at least seven days from the day that he or she is presented with the agreement to seek independent legal counsel.
The agreement cannot be unconscionable, meaning that it cannot be unfair or completely one-sided. Both spouses must provide full and accurate disclosure of the assets, income, property and debts that they have.
California law encourages parties to be adequately represented by independent legal counsel. If a person did not have his or her own lawyer advise him or her, there are a number of criteria that must be met. The acknowledgment must be in writing, state that the terms of the agreement were explained and that the agreement was not executed under duress, undue influence or fraud. Additionally, any explanations regarding the property must be in writing in a language in which the party is proficient.
In addition to permitting prenuptial agreements, the California Family Code also permits spouses to enter into postnuptial agreements. Due to the fact that spouses are already married and that there may not be as much inherent disparity between the spouses, the legal requirements are simplified and the state readily allows spouses to enter into the agreements that they consider fair and just. A postnuptial agreement allows a couple to state how their assets will be divided if they later become separated or divorced.
Timing of Postnuptial Agreements
Unlike a prenuptial agreement, a postnuptial agreement, or postnup or postmarital agreement, is established after the marriage is already in place. As such, the actual marriage taking place is not a condition of the agreement since it is already in place. The postnuptial agreement is usually not completed when the spouses are going through a divorce. However, divorcing parties may enter into separate legal agreements under these circumstances.
Reasons to Get a Postnuptial Agreement
There are many different reasons why spouses may consider a postnuptial agreement. A spouse may achieve greater financial success and may want to protect this income or the assets that derive from it. A spouse may acquire a dangerous habit like drugs or gambling or over-spend to an extent that the other spouse believes that a prenup would provide protection from the other spouse’s behavior. A spouse may take over a family business and may want to ensure that the business does not get divided in the event of divorce.
Reasons to Oppose a Postnuptial Agreement
Postnuptial agreements may not always be in a spouse’s best interests. Some postnuptial agreements may adversely affect a spouse’s interests, such as leaving less property or spousal support than he or she is entitled to. A spouse may be better off financially not signing a postnuptial agreement in order to keep what he or she is entitled to through divorce. If the postnuptial agreement is carried out, a postnuptial agreement can leave the spouses in disparate positions.
Legal Requirements for Postnuptial Agreements
To be legally valid, the agreement must meet a number of requirements, including the following:
- In writing
- Signed by both spouses
- Entered into voluntarily
Additionally, both parties should be fully informed of the marital property involved. When evaluating fairness, the court considers whether the agreement was equitably constructed under fair and just circumstances. Postnuptial agreements cannot be one-sided. The spouse who is disadvantaged by the postnuptial agreement should fully understand the terms of the agreement and sign it in a voluntary fashion. Married couples have a fiduciary duty toward each other, so they must act with care and good faith when executing agreements between each other.
Under California law, couples can convert separate property to community property through a process called “transmutation.” This is accomplished when the agreement regarding this conversion meets the following criteria:
- In writing
- Expressly declared
- Accepted by the spouse whose property interest is adversely affected
This agreement must have an unambiguous declaration that affects a change in the character of the property that is the subject of the agreement. This ensures that there is a clear understanding of the change.
Individuals who are contemplating a prenuptial agreement before they get married or are considering a postnuptial agreement after they have already gotten married may consider an agreement of this nature. Before signing a prenuptial or postnuptial agreement, a spouse should seek legal advice and assistance. These agreements can be negotiated prior to signing so that the agreement provides a fairer outcome. If one lawyer has prepared it, the other spouse’s lawyer can review it with his or her client. He or she can ask for changes as well as advise his or her client what the possible implications are of the agreement.
Prenuptial and postnuptial agreements can be complex and require a complete understanding of the potential legal consequences. It is important that a person does not sign an agreement without understanding all of the possible implications, especially if he or she is feeling pressured by a fiancé or spouse. A lawyer can thoroughly review any proposed agreement and advise his or her client accordingly.
An attorney can draft, review or negotiate prenuptial agreements. He or she can also take measures to ensure that the language is clear and any required disclosures are provided. He or she can ensure that the specific procedures are carried out regarding execution, acknowledgement and recording. If divorce or death occurs, a lawyer can move to enforce the agreement or challenge it if this is in the client’s best interests.