The 4 Most Important Things You Need to Know About the California Prenuptial Agreement
Money and love are a challenging but inevitable combination. Our advice is to face the issues head on – these two are intertwined whether you like it or not. Use your upcoming marriage as a reason to explore your fiancés expectations about money and to answer any questions you have about money and the law of marriage.
If you and your soon-to-be spouse need a prenuptial agreement, you need one that works. A legal document “works” if it does what you want it to do – sometime down the road when you need it.
To walk the tightrope of money and love – and – ensure that your California prenuptial agreement actually works – you need to follow these four steps:
1. Make a Full Disclosure of All your Assets and Debts
It is imperative that you disclose all of your debts and assets to your fiancé. This is typically managed by including an addendum to your premarital agreement, and by providing supporting documentation to your fiancé via your attorneys. The more robust the paper trail showing a full disclosure, the better.
If you fail to disclose debts and assets, your prenuptial agreement will be weak. In other words, your agreement is more likely to be overturned in the future if you fail to disclose your assets and debts. The reasoning is that parties cannot make rational agreements if they do not understand what they’re agreeing upon.
If you do not know whether something should be disclosed or not, err on the side of caution and disclose it. Your attorney can also help you sort this out. We cannot emphasize enough how important full disclosure is when drafting a prenup.
2. Understand Your Legal Rights and the Consequences of Waiving Them
Your family law attorney should explain California community property law to you. It is very important that you have a baseline understanding of the default family laws in California to understand how your prenup affects your rights. Take the contents of your prenuptial agreement seriously – your future may depend upon them.
Keep in mind that your California prenuptial agreement:
- May eliminate your right to 50% of assets acquired during marriage;
- May terminate your right to spousal support;
- May transform community property into separate property;
- May terminate your rights to inherit your spouse’s separate property.
If you are having trouble deciding which issues matter and which do not, use your family law attorney – that’s what we’re for. We’ve seen these issues before and we can help you prioritize.
3. Engage Separate Family Law Attorneys
California law requires that you each have the opportunity to consult with separate counsel, and that you each understand the agreement you’re signing.
If there is ever a dispute, the only way to prove that each of you has met these standards is for you to each have separate attorneys when negotiating the agreement.
The bottom line is that if you want an enforceable agreement, you need separate counsel. Don’t skimp on this one.
4. Don’t Rush – Follow the Seven-Day Rule
It’s always best to take as much time as possible to negotiate a premarital agreement. That said, the only legal requirement regarding timing in California states that seven days must pass between the time you are presented with a premarital agreement, and the time you sign it. This is rather cleverly called the “Seven-Day Rule.”
You may have noticed that the seven-day rule is anything but crystal clear. Some lawyers believe the rule means that seven days must pass between the time you deliver the final draft of your agreement, and the time you sign that draft. Other lawyers believe the provision means you must wait seven days between the first time you discuss the prenup with your fiancé, and the time you sign the final draft.
To further confuse the issue, a recent supreme court case in California suggests that the seven-day rule does not apply to parties who are represented at the time the prenup is first presented. Most family lawyers do not place much stock in this case and believe it will eventually be overturned.
Because the issue is murky, our advice is to take the most conservative approach. That means waiting seven days between delivering of the final draft of your agreement to your fiancé, and signing of the agreement. Don’t rush this process.
Premarital agreements are one of our favorite areas of practice, and we’re always happy to answer questions. To find out whether you need a California prenuptial agreement you’re welcome to email firstname.lastname@example.org or call us at 415.398.1290.
Categories: Premarital Agreements