Prenuptial Agreements California Overview

Introduction To California Prenuptial Agreements

A newly engaged couple may be very sensitive to discuss California prenuptial agreements. After all, the couple has just committed to a life of marriage and is engaged. Naturally, they would seem to be contrary to this marital commitment. One may even accuse the other of planning for” a way out” even before the start of the marriage.

However, this sensitivity must give way to practicality where the couple has assets and debts in California. If an engaged couple wishes to plan, clarify, and set the ordering of their assets and debts before the marriage, they must consider a prenuptial contract. 

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 dealing with divorce or separation. It must be in writing, and not verbal, to be enforceable. Although California law does not require the pact to be notarized, it is recommended.

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

When Effective?

The prenuptial contract will become effective when the couple marries. It will last for the length of the marriage, however short or long that is. 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.

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

California’s 7-day Rule For Prenups

Family Code Section 1615.2 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, spousal support, management rights as to property, and may determine the disposition of property on the couple’s divorce or death. This list is not exhaustive.

Assets and Debts

The parties may agree upon the rights and obligations of each of them in any of the property whenever and wherever acquired or located. The parties may agree on what will happen to their assets owned prior to the marriage, in other words, their separate property.

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. Community property is all property (e.g. real estate or personal property) acquired by the couple during the marriage.

It can also include the treatment of separate assets of the parties under California law that may become or take on the attributes 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. However, after marriage, that party then pays the mortgage on the property with community property funds. For a discussion of California law here, visit: How To Divorce Proof Your Home.

Spousal Support

The prenuptial contract may include provisions for spousal support during the marriage. Spousal support may be determined and defined in advance of the marriage. Also, spousal support may be waived by both parties during the marriage.

However, any provisions regarding spousal support cannot be enforced if the party against whom enforcement of the spousal support provision is sought was not represented by an independent attorney at the time the understanding was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. This generally means that the premarital contract is so unfair or one-sided that it should not be enforced.

An otherwise unenforceable provision  regarding spousal support cannot become enforceable solely because the party against whom enforcement is sought was represented by an independent attorney.

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 except for one spouse who operates a community property business.

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 provides for an effective mechanism to 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 community property judgment if the prenuptial contract provides the solution.

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 Cannot Be Included?

The right to child support cannot be adversely affected by a prenuptial contract. Therefore, issues concerning the amount of child support cannot be contracted in advance of the marriage.

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

Do You Need An Attorney?

No, an attorney isn’t needed to draft the arrangement. However, each party must be represented by independent legal counsel at the time of signing the agreement or after being advised to seek counsel, expressly waive representation in a separate writing. 

Furthermore, if one party seeks waiver of alimony in the Pre-nuptial contract by another party,  the latter party must be represented by independent counsel or the waiver of alimony cannot be unconscionable. 

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.

Any Other Requirements?

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

1. It must be signed voluntarily by the parties.                                                                       

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. 

While this requirement can be waived, California law provides that the contract will be unenforceable where the contract is unconscionable and a party waived disclosure of property and obligations.

This list is not intended to be exhaustive. Legal counsel should be consulted before preparations are made.  In general, a prenuptial contract is not enforceable if a party did not sign the agreement voluntarily or executed an unconscionable, basically unfair agreement. 

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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