Guide To Prenuptial Agreements In California

Introduction

This guide helps you to determine when your California prenuptial agreement is valid. It also will help you avoid mistakes in making your prenup. A newly engaged couple in California may be very sensitive to discuss a prenuptial agreement.

However, prenuptial agreements in California are practical. These contracts legally clarify and organize the couple’s assets, income, and debts prior to marriage. But strict California law must be obeyed for prenuptial agreements to be valid.

The rights and obligations of a California prenuptial contract are determined by the Uniform Premarital Agreement Act.

What Is A Prenuptial Agreement?

A prenuptial agreement is a written agreement between a couple entered into before marriage for issues that may occur during marriage. These issues may concern a couple’s property, debts, income, and later divorce or separation. It must be in writing, and not verbal, to be enforceable.

A prenuptial contract is sometimes called a “prenup” or premarital agreement. In California, the official name is “Premarital Agreement”.

The prenuptial contract will become effective when the couple marries. It will last for the length of the marriage. Provisions may make rights expire at a specific time during the marriage. Likewise, rights may come into existence the longer the marriage, such as spousal support.

Other Requirements of California Prenups?

To be valid, there are two requirements under California law:

1. It must be signed voluntarily by the parties.  It should also be notarized.

2.   Before signing, each party must be provided with a fair, reasonable, and full disclosure of the property or financial obligations of the other party.                             

3. See below for other requirements of prenups in California. Each party should consult legal counsel before making preparations for a prenuptial agreement. In general, a prenuptial contract is not enforceable if a party did not sign the agreement voluntarily or executed an unconscionable, basically unfair agreement. 

It can be modified or amended during the marriage. If a couple decides to divorce, it may provide prospectively for the terms for the divorce.

California’s 7-day Rule For Prenups

Family Code Section 1615(c)(2)(B) provides the California “7-day rule” for premarital contracts. For prenuptial contracts executed after January 1, 2020 in California, a party must be given 7 calendar days from the time the party was first presented with the final prenuptial contract and the time the agreement was signed, regardless of whether the party is represented by legal counsel.

For contracts between January 1, 2002 and January 1, 2020, a party must be given at least 7 calendar days between the time that he or she was first presented with the final contract, advised to seek an independent attorney, and the time the contract was signed.

What Can Be Included In California Prenuptial Agreements?

A Prenuptial Agreement in California may include provisions concerning the couple’s assets and debts and spousal support. It may include management rights as to separate or community property. It may determine the disposition of property upon a spouse’s divorce or death.

The parties may agree upon the rights and obligations as to assets or debts owned prior to marriage and contemplated after marriage.

Rights to Manage Property. The prenup may determine the rights to manage, mortgage, and control property.  In general, as to the control of community property during the marriage, each spouse has a fiduciary duty to the other concerning such property. 

A fiduciary duty requires a spouse to deal fairly and in good faith in managing the community property. The fiduciary obligation continues until the community property is distributed.  In general, spouses share equal management and control of their community property.

It can also include the treatment of separate assets of the parties under California law that may become or take on the character of community property after marriage, such as real estate.

This happens, for instance, where one party owns real estate which is otherwise his or her separate property before marriage. Separate property is property owned before the marriage by one spouse, property acquired during marriage by a spouse by gift, bequest, devise, or descent, and the rents, issues, and profits of any of the above.

However, after marriage, that party may pay the mortgage on that real estate with funds that are characterized as community property.  Community property is all property (e.g. real estate or personal property) acquired by the couple during the marriage. For a discussion of California law here, visit: How To Divorce Proof Your Home.

Spousal Support. The prenup may provide for a waiver of spousal support by both parties or one party in the event of a divorce. California has strict requirements regarding the waiver of spousal support. If the prenuptial agreement does not comply with these requirements, the waiver of spousal support could be unenforceable and invalid.

Property On Death Or Divorce. The agreement may determine the disposition of property upon the couple’s divorce or death. As to a divorce, the contract may control the outcome of the divorce proceeding.

This is because the premarital contract can provide for the rights and obligations of the couple concerning property and debts. A divorce court will not need, therefore, to make a judgment if the prenuptial contract already provides for the division of the parties’ property and debts.

The parties may agree to the making of a will or living trust to carry out the provisions of the prenuptial understanding. The prenup may determine ownership rights in and disposition of death benefits from a life insurance policy of one of the parties.

What Prenups in California Cannot Include

A prenup may not adversely affect the right to child support. Therefore, issues concerning the amount of child support cannot be contracted in the prenuptial agreement.

Also, it cannot include matters in violation of public policy or a criminal statute.

Do You Need An Attorney?

No, an attorney is not needed to draft the prenup. However, each party must have independent legal counsel at the time of signing the agreement. Or after being advised to seek counsel, expressly waive representation in a separate writing. 

What Is The Cost ?

The Law Offices of Keith F. Carr charges a fixed fee or by the hour based on its complexity. We also charge an hourly fee for the review.

About Author

Keith F. Carr is an attorney practicing Bankruptcy, Divorce, and Estate Planning. Attorney Keith F. Carr has over 30 years experience. Founder of Law Offices of Keith F. Carr, located in San Francisco, San Jose, and Palo Alto, Ca.

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