You may think a prenuptial agreement is not for you. However, you may not realize that you already have one. The state of California has rules in place for dividing marital property during a divorce, and those rules may not conform to the terms you would have chosen.
As a community property state, California’s laws state that you and your spouse will split all community property 50-50 if you should divorce. In most cases, community property is anything you and your spouse acquire during your marriage. This can quickly become a complex matter, especially if decisions about who gets what arise at the height of an emotional breakup. Before you dismiss the idea of a prenuptial agreement, you may benefit from learning as much as possible about its advantages.
Looking out for each other
Naturally, it is not easy to think about dividing your belongings before you have even joined them in marriage. Nevertheless, you may admit that you have witnessed some messy divorces that have escalated emotionally as the couples grappled for their fair shares of joint assets or fought to protect what they believed was separate property. Prenuptial agreements can help you avoid this. You may agree that a little discomfort now may prevent considerable anguish in the future. Some factors a prenuptial agreement can address include these:
- Deciding how you will separate joint assets
- Identifying assets that are not part of community property
- Keeping certain assets from leaving the family
- Protecting funds you may have saved for your retirement
- Sparing yourself from liability for your spouse’s debts and vice versa
- Preventing the loss of assets that rightfully belong to your children from a previous marriage
- Saving your business from liquidation if the court determines it is a joint asset
Having a prenuptial agreement can open conversations many couples fail to address before marriage. You may find that this actually creates more honest communication with your spouse. You can also use your agreement to outline many issues that are often sources of dispute among couples, such as your plans for saving, investing, borrowing and spending money. You can ensure that your spouse is well compensated through alimony if he or she sacrifices to raise the children or repay your student loans, for example.
A prenuptial agreement can be a very flexible and valuable document, one that you and your partner can create together in a spirit of mutual support and compassion. You can begin by seeking the counsel of an attorney and encouraging your partner to obtain separate legal advice.