A prenuptial agreement (also known as a premarital agreement) is a legal contract that is entered into by two people prior to marriage. The agreement outlines how assets and debts will be divided in the event of a divorce and can even include issues such as spousal support. Prenuptial agreements are often used to protect the finances of one spouse in the event of a divorce. However, they can also be used to protect the property rights of both spouses. Prenuptial agreements can be a helpful tool for couples who want to avoid the stress and expense of a lengthy divorce battle.
Premarital agreements become effective upon marriage. After marriage, they can be amended or revoked by written agreement of the parties. Couples who are considering entering into a prenuptial agreement should consult with an attorney to ensure that their rights are protected. There are numerous formal requirements that must be met in order for a prenuptial agreement to be valid.
Prenups are not just for the wealthy. Couples of all income levels can benefit from signing a prenup. If you’re considering a prenup, here’s what you need to know.
What Is a Prenuptial Agreement?
A prenuptial agreement, also called a premarital agreement or “prenup,” is a legal contract couples sign before marriage. The document outlines each person’s financial rights and responsibilities in the event of a divorce.
What Can a Prenup Cover?
A prenuptial agreement can cover a wide range of topics, including:
- How property will be divided in the event of a divorce;
- How much, if any, spousal support will be paid in the event of a divorce;
- How debts will be divided in the event of a divorce;
- How future earnings will be divided in the event of a divorce, and;
- What will happen to property in the event of death.
This is not an exhaustive list of the issues that can be covered by a prenuptial agreement; there are many other issues that can be addressed with a prenuptial agreement.
What a Prenup Cannot Cover
A prenuptial agreement cannot cover everything. For example, a prenup cannot:
- Dictate child custody arrangements in the event of a divorce;
- Adversely affect child support payments in the event of a divorce;
- Waive one spouse’s right to alimony altogether, unless both spouses are represented by an attorney, and/or;
- Contain anything that is in violation of California “public policy.” An example would be requiring a “penalty payment” if one spouse files for divorce. Because California is a “no fault” divorce state, a prenuptial agreement cannot restrict that right.
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