Prenuptial Agreements in California

• California prenups and the law
• What can you include in a California prenup?
• Financial protections and provisions
• What can't you include?
• 4 things that could invalidate a prenup
• How to create a binding prenup
• Things to know before you sign
• A prenuptial agreement checklist
• References

A prenuptial agreement is a legally binding contract drawn up between two people before they get married. This optional legal document answers potentially delicate questions that might come up during a divorce, including issues involving retirement accounts, properties, and other assets. 

Experts call prenups a form of marriage insurance. If your marriage eventually disintegrates, you won't lose everything in a messy divorce. And like an insurance policy, you may never need it. But, when you do, you'll be glad it exists. 

Prenups were once uncommon, as just 3% of people had them in 2012. But in 2022, 15% signed legal documents like this. 

Prenuptial agreements are enforceable in California with a few important limitations. We'll outline what they are and help you understand how to create one before your married life begins. 

California prenups and the law 

Many people get married in one state but move around the United States during their marriage. It was found that the prenuptial arrangements they made in one state did not always work in their new state. The Uniform Premarital Agreement Act was designed to change that. 

Many states came together and agreed on how these arrangements should work. California was one of those states.

Per the Uniform Premarital Agreement Act, a prenuptial agreement is legally binding when it's in writing, contains acceptable terms, and is signed by both parties. The arrangement becomes effective on your wedding day and can only be changed with another signed, written document agreed to by both parties.

What can you include in a California prenup?

Per California law, couples can hammer out all sorts of issues in their premarital agreements. Your documents could specify details about the following:

• Property: You can determine who owns property you bring to the marriage, and you can outline who has the legal authority to do things like sell or lease those properties. You can also identify what happens to property if you’re separated or divorced.
• Life insurance: You can determine who benefits from your policies, especially if you want the funds to go to someone outside the marriage (like a former spouse).
• Death arrangements: You can determine what happens to property when you die, and you can figure out how a will could refer to this prenuptial agreement.

California’s laws are relatively loose, allowing couples to include details about their rights and obligations as long as they don’t violate public policies. You could include plenty of items we haven’t discussed yet.

But some experts say that prenuptial agreements work best when they’re confined to issues that tend to get sticky during a divorce. Those issues involve the following:

• Property
• Financial support for spouses or children
• Attorney’s fees

Both parties must agree to the terms, so discuss all the issues carefully. Together, you can decide what you want to leave in (and out) of your legal documents.

Financial protections and provisions

During your marriage, you might collect assets such as property, cars, or boats. You might also rack up debt in the form of mortgages or credit card balances. Per California law, anything you buy or borrow during your marriage belongs to both of you regardless of who is using it. 

Items and assets you owned before you were married are often considered separate property. The theory is that what you brought into the marriage is yours alone if the marriage ends. However, if once-separate property becomes commingled between the two of you, it is less likely to remain separate in the eyes of the law.

You could also use a prenuptial agreement to make sure your separate property goes to someone who isn’t your spouse when you die. For example, you may enter the marriage with a home you inherited from an aunt. In your prenuptial agreement, you could give that home to your child (not your spouse) on your death.

Helpful: Property Division in Community and Non-Community Property States

What can't you include in a California prenup?

Some issues couples want to define can't be included in a prenup in California. Those issues involve the following:

• Childcare arrangements: Children change quickly, as do their needs and care requirements. Couples can't predict all variables before marriage (and before all of their children are born). 
• Morality: Couples can't outline what one or the other party can't do to stay in the marriage. This means clauses about infidelity aren't allowed. 
• Some financial incentives: Couples can't add provisions that make divorce more attractive than marriage. 

4 things that could invalidate your prenup

A signed prenuptial agreement should be legally binding. But a few common mistakes could let lawyers and judges break your terms in court. Ensure that your prenup doesn't include these mistakes:

1. A lack of legal counsel 

If you're discussing spousal support in your prenup, you must include lawyers in the discussion. California law requires the participation of independent legal counsel, so parties understand the rights they're retaining and giving away. 

If you can't prove that you both had independent lawyers working on the documents, your prenup could be invalid. 

2. Coercion 

If someone can prove they were forced to sign or somehow lost their rights during the prenup agreement process, courts can throw out the entire agreement. 

3. Deception

Both parties must provide a clear and honest accounting of their financial situation during the prenuptial process. If you hide or devalue assets, and your spouse can prove that in court, the entire document could be invalid. 

Your spouse needs to understand the financial landscape to make smart decisions. Blocking that ability could cost you later. 

4. Speed

California law requires a seven-day evaluation and waiting period. Couples need time to look over all the details and determine if they agree with all clauses. If you can't prove that both parties had that week of review, your agreement is invalid. 

How to create a binding prenuptial agreement in California 

Hire lawyers

Since California requires a lawyer's participation for spousal support, and most couples want to nail down those details in a prenuptial agreement, you both must find lawyers to get started.

Your costs will be determined, in part, by how much your lawyers charge per hour. If you enter the marriage with complicated financial situations and plenty of assets, your lawyers will need a lot of negotiation and research time.

On average, couples in California spend less than $1,000 on prenuptial agreements. But yours could cost much more, depending on the helpers you hire.

What if you want to draft a prenuptial agreement without attorneys? You can do this, though some experts warn against it. A DIY prenup is very easy to overturn in a California court, so all your hard work could be futile without a lawyer. Consider hiring an attorney to review your prenup if you are concerned about its validity. 

Determine what to include

Legal California prenuptial agreements can discuss property, life insurance arrangements, death arrangements, attorney’s fees, and financial support for spouses or children.

Your prenuptial agreement cannot include things like childcare arrangements, morality clauses, and financial incentives that make divorce more attractive than marriage.

Collaborate

Both parties must agree to the terms of a prenuptial agreement, and you can’t use pressure or coercion to make the other person sign. Talk over the terms, and make sure you’re both happy with the plans you’re considering.

Draft review

One lawyer writes up the prenuptial agreement per the conversations you’ve held. That document heads to the other party for a mandatory seven-day review. You can’t speed this process up without invalidating the contract, so be patient.

Final signature

After the seven-day waiting period is over, both parties sign the prenuptial agreement in front of a notary. At that point, the arrangement is legally binding.

Things to know about a prenup before you sign 

A prenuptial agreement is legally binding, and once you're married, it's hard to change it. Use your seven-day waiting period to read through all the clauses and talk over options with your lawyer. Don't rush this important process. 

During the negotiation process, be honest about all of your assets and debts. It can be hard to talk about money with a potential spouse (especially if you’ve never done so before), but transparency is required to create a legally binding document. 

If you start crafting a prenup and change your mind, you have options. You could place your assets into a trust, or you could shift some items (like buildings) into a limited liability company. Talk with your lawyer about which option might be best for you. 

Seeking assistance in drafting a prenuptial agreement?

Our experienced team can answer your questions to help you understand the process and figure out what's best for your specific situation.

 

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A prenuptial agreement checklist

If you’re considering a prenuptial agreement, you’ll need to gather documents for your legal team. This checklist can help you prepare.

Your legal team will probably ask for the following types of information:

• Income verification: Check stubs, tax returns, 401(k) statements, and other financial paperwork can help you prove what you own right now and how much you typically earn.
• Real estate ownership: Deeds, mortgage statements, and other legal documents can help you demonstrate the property you’re bringing into the marriage.
• Other assets: If you own cars, boats, jewelry, or other important bits before your marriage, demonstrate your ownership with receipts, deeds, or other paperwork.
• Debts: If you’re entering the marriage with a large stack of unpaid bills, bring receipts and balance data with you.

References