Prenuptial Agreements in California
- California prenups & the law
- What can you include?
- What can't you include?
- 4 things to invalidate a prenup
- How to create a binding prenup
- Things to know
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
The Uniform Premarital Agreement Act governs prenuptial agreements in California. A few lines of code outline how these agreements work and how they'll be handled in California courtrooms.
Per this law, a prenuptial agreement is legally binding when it's in writing and signed by both parties (with a few exceptions we'll detail below). The terms become effective on your wedding day, and once they are, you can only change the agreement 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:
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.
What can't you include in a California prenup?
Some issues couples want to define can't be included within a prenup in California. Those issues involve the following:
- Childcare arrangements: Children change quickly, as do their needs and requirements. Couples can't predict all variables before marriage (and 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.
It's tempting to force someone to sign documents. Your pressure saves both time and money. But if someone can prove they were forced to sign or somehow lost their rights during the process, courts can throw out the entire agreement.
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.
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
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. And 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.
Don't try to handle these documents alone, experts say. A DIY prenup is very easy to overturn in a California court, so all your hard work will be futile without a lawyer.
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?
ReferencesGetting Engaged This Valentine's Day? You Need a Prenup, According to These 3 Experts. (March 2022). NextAdvisor.
Here's Why More Millennials Are Getting Prenups. (September 2022). Market Watch.
Chapter 2: Uniform Premarital Agreement Act [1600 - 1617]. California Legislative Information.
Till Prenup Do Us Part? (August 2022). American Bar Association.
Prenuptial Agreement: What Is a Prenup and How Do I Get One? (October 2022). Forbes.
What Is a Prenup and How Does It Work? (October 2022). Northwestern Mutual.
Prenups Aren't Just for Rich People Anymore. (July 2022). The New Yorker.
Is a Prenup a Must for Most Couples? (March 2015). The Wall Street Journal.