Prenups and Your Estate Plan
Drafting a prenuptial agreement can be a wise step to take if you want to add a layer of security to your estate plan. If you’re considering forming a prenuptial agreement in California, call The Elder & Disability Law Firm, APC in Redlands, California. Estate planning attorney Esther C. Wang can discuss your options and assist you in drafting the terms of your agreement.
Understanding Prenuptial Agreements
A prenuptial agreement is a legal contract that a couple makes before they are married. This agreement determines the division of assets in the case of divorce or death of one of the spouses. (If this agreement is made after the couple is married, it is called a postnuptial agreement and functions in much the same way.)
When you create a prenuptial agreement, you must consider the assets and debts of each spouse, whether one or both spouses has family property that they want to keep strictly in their family, whether one or both of you own a business, whether both spouses are going to move into one spouse’s home that they acquired before the marriage, and whether either spouse has children from a previous marriage.
The requirements for creating a prenuptial agreement in California can seem daunting, but a skilled estate planning attorney can make the process easier. If your prenuptial agreement covers spousal support, an attorney is required by law; however, an attorney can also help you successfully navigate the rest of the requirements and make sure your document is valid.
Both spouses will need to complete a full financial disclosure. The agreement must be notarized and signed by both parties. The agreement cannot contain anything “unconscionable,” or any provision that a court is likely to find extremely unfair. Finally, you must wait seven calendar days between being given the completed contract and signing it.
Benefits of a Prenup to Your Estate Plan
One of the benefits of creating a California prenuptial agreement is that the prenup can override existing state laws on spousal property division. California is a community property state; generally, California aims to distribute marital property (which includes either spouse’s earnings after the marriage) equally in a divorce if there is no former agreement between the spouses. If you and your spouse want to split your marital property in any other way, you can declare that in the prenuptial agreement, and the state will honor your wishes.
The importance of prenuptial agreements in estate planning cannot be emphasized enough if you or your spouse want to protect your individual assets. For example, if you brought a substantial amount of money or property to the marriage, or if you want to pass on a business or certain family heirlooms to your child from a previous relationship, you can stipulate that this property remains separate. In short, you and your spouse can determine which property should be classified as separate and which should be classified as marital property. This can help you avoid a lengthy court battle in the case of divorce or death.
Using a Prenup as an Estate Planning Tool
What to Include
You will most likely want to include provisions determining the division of assets in the case of death or divorce, as well as spousal support and provisions for any children. You will also want to include directions about the dispersal of businesses and certain family property.
What Cannot Be Included
A prenuptial agreement cannot determine child custody or visitation rights in the case of divorce. It is not a will, so a prenup cannot determine an executor for your estate, medical power of attorney, or guardianship of surviving children.
Updating Your Estate Plan to Reflect Prenup Provisions
A prenuptial agreement can work alongside your will to help emphasize your wishes after your death. One of your most important tasks while drafting a prenup is determining which property is separate and which property is marital. Your prenuptial agreement determines which property goes to your spouse, and your will determines who gets your separate property.
In community property states like California, a spouse can also waive their right to their half of the community property. This can be helpful in certain situations. For example, in a prenuptial agreement, Spouse A can waive the right to their share of the marital property if they already have significant family assets and Spouse B wants to ensure that a child from a previous relationship receives a larger share of their estate. If both spouses agree, this can be reflected in Spouse B’s will. You and your estate planning attorney should make sure your will and your prenuptial agreement work together to emphasize all of your wishes.
Get Versatile & Trustworthy Legal Guidance
Attorney Esther C. Wang at The Elder & Disability Law Firm, APC is dedicated to working with you to help you achieve your estate planning goals. Serving Redlands, California, as well as Riverside, Rancho Cucamonga, and Palm Springs, Esther has been working for over thirty years to help clients secure their families’ futures. Call The Elder & Disability Law Firm, APC today for a consultation.