A prenuptial agreement, known as a premarital agreement in California, is an agreement between two people intending to marry that helps govern the terms of the marriage as well as potential dissolution of the union. For many years, prenuptial agreements have had a bad reputation as instruments used only to protect the money one spouse has before entering a marriage. However, prenuptial agreements can be useful tools for couples intending to marry because they allow that couple to personally dictate the terms of the marriage and any potential dissolution of the marriage instead of leaving it up to the laws of the state in which the couples have no say govern the marriage and potential dissolution. Prenuptial agreements also offer many additional benefits to couples considering marriage, in addition to helping protect the assets and well-being of each spouse during and after a marriage. Some benefits of prenuptial agreements include:
- Personal control over finances
- Regulation of property
- Improved financial communication
- Overall peace of mind.
Personal control over finances
As mentioned, the absence of a prenuptial agreement means that California laws will govern financial considerations should a marriage end in divorce. If couples want to ensure that they are able to have more of a say in how financial decisions are to be made in the face of divorce, then a prenuptial agreement may be an effective tool for couples to use to make sure their voices are heard by the court and that their wishes can be taken into consideration more than if a court only applied state laws. Additionally, it allows couples that may have unique family arrangements during marriage to predetermine or even waive spousal support in the event of divorce.
Regulation of property
In California, most property owned by one spouse before entering into marriage remains the property of that spouse after a marriage has been dissolved. There are some exceptions to this general rule, such as when a spouse invests a significant amount of money in property that was owned by the other spouse prior to marriage. There may also be exceptions for property purchased jointly prior to a marriage. At the same time, California law dictates that most property acquired during a marriage is community property. While there are also exceptions to this general principle, that means that property acquired during marriage will be split evenly between spouses in case of a divorce. A prenuptial agreement can help couples considering marriage iron out property questions prior to the marriage, including dictating how property is to be divided in the case of divorce.
Improved financial communication
Finances are historically one of the reasons why relationships, especially marriages, fail. Prenuptial agreements can act as a tool for couples to begin discussing serious financial concerns prior to the marriage. Doing so helps improve financial communication between spouses, and encourages honesty in such discussions. Discussing how earning money and spending will affect your marriage ahead of time can help prevent conflict down the road.
Peace of mind
Marriage is unpredictable, which is one of the things that makes it so difficult. Generally, people do not enter into a marriage planning on divorcing at some point in the future. However, any number of events could occur during the course of a marriage that make it impractical for the marriage to continue. Knowing how you and your partner will handle a possible divorce ahead of time can put couples at ease, and help avoid prolonging unhappy marriages in the long run. It allows people to rest easy knowing that there will be less of a need for contentious and costly litigation should a marriage end in divorce. When the terms of the dissolution of a marriage have been settles on ahead of time, the divorce process can be much easier.
Should you have a prenuptial agreement?
Nobody is able to tell you the dynamics of your relationship or what the future holds for you. Deciding on whether or not to use a prenuptial agreement is a personal decision between those deciding on whether or not to enter into a marriage. However, while there are certainly limitations to what prenuptial agreements can do, prenuptial agreements are far more beneficial in many situations than their reputation may lead people to believe.
If you are considering using a prenuptial agreement, you should contact a family law attorney with experience in drafting and enforcing prenuptial agreements. Your family law attorney can help you understand how a prenuptial agreement can fit into your marital plans. For more information on prenuptial agreements, or if you have questions about an existing prenuptial agreement contact JWB Family Law to schedule a consultation.