What to Expect When Creating Pre-Marital Agreements

When two people decide to marry, there are many things they must consider for their future together. One of those considerations is whether to create a pre-marital agreement, also known as a prenuptial agreement. This legal document can help set expectations and protect both parties in the event of a divorce or separation.

While discussing a pre-marital agreement may seem uncomfortable to some, it can provide clarity and peace of mind. In California, as in many other states, prenuptial agreements are legal and enforceable, provided certain requirements are met. If you’re thinking about creating a pre-marital agreement in California, it’s important to understand the process, its purpose, and what to expect.

What Is a Pre-Marital Agreement?

A pre-marital agreement is a legally binding contract entered into by two people before they get married. This contract typically outlines how assets, debts, and other financial matters will be handled in the event of a divorce or separation. In California, the agreement can also address issues such as spousal support and the distribution of property.

The goal of a pre-marital agreement is to provide both parties with a clear understanding of their rights and responsibilities during the marriage and in case the marriage ends. This can be especially important for individuals with significant assets, children from previous relationships, or those who wish to protect their business interests.

Why Consider a Pre-Marital Agreement?

While the idea of planning for a potential divorce may seem unromantic, a pre-marital agreement can serve as a helpful tool for both parties. Some common reasons couples opt for a pre-marital agreement include:

Asset Protection: If one party has significant assets before marriage, a prenuptial agreement can help protect those assets from being divided during a divorce.
Debt Protection: If one spouse has considerable debt, a pre-marital agreement can prevent the other spouse from being responsible for that debt in the event of a divorce.
Business Interests: Individuals who own a business may want to protect it in case of divorce. A prenuptial agreement can outline how the business will be treated and prevent it from being divided.
Clarifying Financial Expectations: A pre-marital agreement can set expectations regarding the financial responsibilities of each spouse during the marriage. This can reduce misunderstandings about how finances will be handled.
Protecting Children from Previous Relationships: If either party has children from a prior marriage, the agreement can outline provisions for their financial well-being and inheritance.
Spousal Support: The agreement can specify whether spousal support will be paid in the event of a divorce, and if so, how much and for how long.

When Should You Consider Creating a Pre-Marital Agreement?

The best time to create a pre-marital agreement is well before the wedding. Ideally, the agreement should be signed several months before the ceremony, allowing both parties to consider the terms carefully without any pressure or rush.

Creating the agreement too close to the wedding day may lead to claims of coercion or duress, which could impact the enforceability of the agreement later. It’s important to provide both parties with enough time to review and negotiate the terms thoroughly. Each party should also have their own independent legal counsel to ensure the agreement is fair and that both parties understand their rights.

What to Include in a Pre-Marital Agreement

A pre-marital agreement can be tailored to meet the specific needs and concerns of the couple. Some common provisions that may be included in a pre-marital agreement are:

Property Division: One of the primary functions of a prenuptial agreement is to define how property will be divided in case of divorce. This includes assets such as real estate, retirement accounts, vehicles, and savings.
Debt Allocation: A pre-marital agreement can specify how debts incurred during the marriage will be divided. This is particularly important if one spouse has significant debt before marriage.
Spousal Support: The agreement can include provisions about spousal support, including whether either party will be entitled to receive support in the event of divorce, and if so, the amount and duration of support.
Estate Planning: Some couples use pre-marital agreements to address estate planning issues, including inheritance rights and how assets will be distributed if one spouse passes away.
Business Interests: If one spouse owns a business or has an interest in a business, the agreement can specify how the business will be treated in case of divorce, including whether it will be considered marital property.
Protection for Children: If one or both parties have children from previous relationships, a prenuptial agreement can specify how financial matters related to those children will be handled, such as educational expenses or inheritance rights.
Dispute Resolution: The agreement may outline how disputes will be resolved, including whether mediation or arbitration will be required instead of going to court.
Other Personal Provisions: In some cases, couples may include non-financial matters in their pre-marital agreements, such as responsibilities for household chores, pets, or any other matters that may be important to the couple.

The Legal Process of Creating a Pre-Marital Agreement in California

Creating a pre-marital agreement in California involves several important steps to ensure that the agreement is valid and enforceable:

Full Disclosure of Assets and Liabilities: Both parties must provide full and honest disclosure of their assets, debts, and income. Failure to disclose this information can render the agreement invalid.
Independent Legal Counsel: Both parties are strongly encouraged to have their own legal counsel. Having separate attorneys ensures that both parties fully understand the terms and are making informed decisions.
No Coercion or Duress: The agreement must be entered into voluntarily by both parties. If one party is pressured into signing the agreement, it could be challenged in court later.
Fair and Reasonable Terms: The agreement must be fair and reasonable at the time it is signed. Courts may not enforce terms that are overly one-sided or unconscionable.
Written Agreement: The agreement must be in writing. Oral agreements are not enforceable in California when it comes to pre-marital agreements.
Execution of the Agreement: Once both parties agree to the terms, the agreement must be signed before the marriage takes place. It is best to sign the agreement several weeks or even months in advance of the wedding to avoid any potential claims of duress or pressure.

What Happens if a Pre-Marital Agreement is Disputed?

In some cases, a pre-marital agreement may be challenged, either during divorce proceedings or if one spouse contests the agreement’s validity. A court will typically consider several factors when determining whether an agreement should be enforced, including:

Whether both parties had independent legal representation
Whether there was full disclosure of assets and debts
Whether the terms of the agreement are fair and reasonable at the time of enforcement
Whether one party was coerced or pressured into signing the agreement

If the agreement is found to be invalid, the court may disregard it and divide assets and liabilities according to California’s standard community property laws.

Conclusion

A pre-marital agreement can offer peace of mind and protection for both parties entering into marriage. By clearly defining financial responsibilities, property division, and other important matters, a pre-marital agreement helps prevent disputes in the future. While it may not be the most romantic part of planning a wedding, it can provide a sense of security for both spouses. If you’re considering a pre-marital agreement, it’s crucial to consult with a family law attorney experienced in drafting prenuptial agreements in California. A knowledgeable attorney can guide you through the process and ensure that the agreement is fair, valid, and enforceable.