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Whether you call it a "prenuptial" or "premarital” agreement, it's the same thing: an agreement in which a couple sets out the rules that will govern their property, debts, income and expenses in the event of divorce.
A prenuptial agreement allows both spouses to protect their separate property so that it remains separate during the marriage. It also allows both spouses to protect themselves from the other's debts - those incurred before the marriage and those incurred after. Additionally, the agreement may allow spouses to determine what level of support one of them will provide to the other if they divorce or if one of them dies. A prenuptial agreement can also protect heirs.
On the other hand, a prenuptial agreement also allows the spouses to agree that everything they own and everything they owe will automatically become shared from their wedding day forward, or gradually as they stay married over a period of years. The flexibility of the prenuptial agreement is its main selling point.
Most people don’t draft prenuptial agreements. They may be prudent, but premarital agreements just don't feel good. It feels like you're giving up on your marriage before you even get started. You're asking two people who are thoroughly in love and convinced that this is a marriage made to last forever to, in effect, negotiate their divorce settlement before they say "I do." Any way you dress it up, that's a real downer for romance. Regardless, it may be the smartest decision you make.
In California, you can only enforce a prenuptial agreement if it's fair at the time you're enforcing it (a tough standard). There are many requirements that must be met in drafting an agreement that will be enforceable. It may be voidable if the party you're trying to enforce it against had representation when you negotiated and signed the agreement and you did not, or if you signed it less that seven days before you got married. Consequently, as a practical matter, most people who negotiate and execute prenuptial agreements are both represented by lawyers.
Any good prenuptial agreement will include a detailed description of the significant property that each of you owns and the significant debts that each of you owes. This is often the most exhausting part of preparing a prenuptial agreement, because it requires so much data gathering from both of you. If you and your intended are contemplating a prenuptial agreement, you can save yourself some time and money down the road if you begin gathering that information now so that it's ready when you start negotiating.
The actual form of the prenuptial agreement can be relatively simple or incredibly long, depending on the issues to be covered and the size of your estate you wish to protect. But negotiating the agreement need not be complex. You and your intended can sit down in the same room with your respective lawyers and finish the main negotiations in an afternoon, leaving it to the lawyers to draft the language. Then you could meet for another session in which you complete the fine points of the language and actually sign the agreement.
On the other hand, when the spouses lack basic trust and the lawyers take over, negotiations can run for hours upon hours spread out over months, typically culminating in a marathon negotiation and drafting session on the eve of the wedding rehearsal. Don't laugh. It happens.
Expect some tension. In one sense, the negotiation of a prenuptial agreement allows each of you to see the other at their worst, when you're arguing about money. If you have disagreements, that's okay. If you don't disagree, well, if you don't, that may bode well for your future marriage.
Another option: If you and your new spouse-to-be really aren't going to do the prenuptial thing, there are some practical steps both of you can take to control the way your property, debts, income and expenses merge. First, prepare a thorough inventory of everything you own and everything you owe as of your wedding day. You can do this without even sharing it with your spouse. But if the two of you can cooperate, you could each prepare an inventory and then sign a document indicating that you've each shared this information with your spouse.
Second, to the extent that you want property you acquired before your marriage to remain separate, treat it that way. Don't use it for the benefit of the marriage. If you sell or liquidate any of it, make sure you deposit the proceeds in a separate account in your name only and that you don't use the proceeds for the benefit of the marriage.
If you already know that you're going to use some of your separate property for the benefit of the marriage, go ahead and pull out that much cash and deposit it into an account you can both draw out of, leaving the remainder of the separate property in the original account and preserving its separateness.
As your marriage continues, you may be tempted to tap into your separate property account for expenses of the marriage, like a down payment on a house or an investment in a business. Just realize that every time you tap your separate property for a marital purpose, you make it look more like marital community property. |
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| Backes & Associates offers excellent professional services in all aspects of Family Law including Divorce, Legal Separation, Domestic Partnerships, Child Custody and Visitation, Child Support, Spousal Support, Domestic Violence, Restraining Orders, Division of Property, Grandparent Rights, Premarital Agreements, Paternity and Adoptions. |
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| DISCLAIMER: |
| The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Neither this web site nor its contents create an attorney-client relationship. |
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