It’s February and love is in the air. A time when people honor their love for each other and often, get engaged; what could be more romantic than working on a prenup together? Okay, almost anything, right? As with all of my blogs, this information is general in nature, relates only to California law existing at the time the blog was written, and does not create an attorney-client relationship. Everyone’s situation is different, so please speak with a licensed attorney before relying on anything you find on the internet.
Let’s start with what a prenup does.
When you marry or enter a domestic partnership, there are a new set of rules that apply to things you acquire during that time, be they homes, income, investments, or debts, rules that apply to managing your partner’s finances or health care decisions if they can’t because of an illness or injury, and rules that apply when one partner dies. In a prenup, with some limited exceptions, you change those default rules.
Who needs a prenup?
Anyone who wants to provide for children from a prior relationship, or aging parents or other family members, anyone who has assets from before the marriage or partnership, anyone who might become ill or get injured, and anyone who might die. So, assuming you’re not immortal, whether you’re asking for a prenup, or you were just handed one, there are benefits if you do it right. Prenups bring up important topics that a lot of couples don’t discuss and resulting in conflict later on. You may have very different saving and spending habits, or strong views about having or raising children. Learning early on how to communicate about uncomfortable or difficult topics can only strengthen your union.
The Enforceable Prenup
There are many rules that govern prenups. If you do not follow these rules, your prenup can be deemed invalid and tossed out in court when you need it the most. So, that $300 online prenup that looks so good to you now, could end up costing you tens or even hundreds of thousands of dollars later if a judge rules it invalid. Not only would have spent legal fees to prove the prenup is valid, if the judge ruled against you, you’d have to litigate all the issues the prenup would have resolved, had it been done right. And, yes, that may mean, you spend $10,000-$25,000 or more on the prenup today. If it can save you tens of thousands of dollars in a California divorce or prevent you from losing your home if your partner dies before you, it will have been more than worth it. The most expensive prenup is the one tossed out in court.
While there are no guarantees, here are some tips that can strengthen your prenup so that it holds up in court:
- You should each be represented by your own attorneys. Most prenups have complicated language and long-lasting effects. If you don’t understand what a homestead or family allowance waiver is, you’re likely to regret it if your partner dies before you. Your attorney will explain not only the law and how your agreement changes it, but s/he should put it into terms that you can understand on a practical level – how does it affect you in real life. If you don’t understand this, you shouldn’t sign the agreement. You are more likely than not to have been properly advised as to how the agreement affects you individually if you had an attorney. If your partner refuses to retain an attorney, your prenup may not be upheld in court – this is not a certainty if the property language is included, but it definitely weakens the strength of the agreement.
- Both of you must actively participate in the negotiations. It should not be unilaterally drafted by one person and accepted as is by the other. Judges look for some back and forth. If you are in a collaborative process, the agreement is prepared by both lawyers together, after joint discussions about your goals, concerns, and, finally, your agreements. Outside of that process, usually a draft favoring one partner is prepared by his/her lawyer and then sent to the other partner’s lawyer who will then make changes that favor their client, and the back-and-forth continues until both partners agree on a final draft.
- Exchange accurate and complete financial disclosures of your assets, debts, and income.
- Each of you should have plenty of time to review and consider the final draft before signing so that neither of you feels pressured in any way. If you get the final draft three days before the wedding, you have a problem.
- Update your prenup. Your lives will change throughout your union. Your prenup, like an estate plan (will and trust), should reflect your most current situation. I recommend annual reviews. Because here’s the kicker, even if you follow all of the rules surrounding prenups (and there are a lot of them), if at the time of a divorce, it would not be appropriate to enforce the prenup, the judge can invalidate all or any part it at that time. For example, if you were married 10 years, and one of you sacrificed a career to be the stay-at-home parent for young children over the last 8 years, upon a divorce, it’s unlikely a judge would enforce a waiver of spousal support at that time, if that was part of the prenup.
This is just a brief introduction to prenups. We have more detailed information available to our clients who want to create agreements that meet their needs and can be relied upon. Our prenuptial agreements are tailored to our client’s situations, goals, and concerns. If you’d like more information, you can schedule an online meeting with an attorney experienced in prenuptial agreements so that we can get you started on the right foot.
Our office is located at 111 West Ocean Blvd.
Long Beach, CA 90802