Sunday, December 23, 2012
Orange County-What is a Prenuptial Agreement
A prenuptial agreement is a contract between two peoplr who are engaged to be married. Also known as “prenup,” such an agreement is called a premarital agreement in California and becomes effective upon marriage.
The premarital agreement generally sets forth exceptions to the overall statutes imposed by the law regarding community property and financial obligations. In California, all assets and debts acquired or incurred by either party after marriage and before separation are deemed to be “community” or jointly owned. On the other hand, inheritance and gifts are considered separate property.
A well-crafted prenup can effectively define limits as to what is and is not to be deemed as “community property.” A prenup agreement can include provisions which stipulate how assets and debts acquired during marriage are to be considered. The agreement can also stipulate if a supported spouse will be entitled to spousal support or “alimony” in the event of separation. It must be noted however that a prenup waiving or limiting spousal support, even if it is well-written, may be considered by the court as invalid if the court finds the clause unconscionable.
You may want to know the legal requirements for a valid prenup. Below are the basic requirements:
· It must be in writing and signed by both parties. Oral agreements do not have the force of law.
· It must be done “voluntarily” or freely. No coercion must have taken place and both parties are mentally and psychologically capable.
· Before the signing of the prenuptial agreement, both parties must make a full disclosure of their property and financial obligations.
· Both parties must be represented by an attorney. If one party does not have a lawyer, then he/she must affirm in a separate document that he/she was told to seek the help of an attorney but chose to waive his/her right to a counsel.
· The party presented with the premarital agreement has seven days to agree to the contract. Seven days start from the first presentation to the date of execution of the agreement. (The 7-day provision does not apply if both parties have a counsel.)
· For the party without a lawyer, he/she must be apprised of the legal repercussions of the agreement and affirm in another document that he/she is fully aware of the rights and/or obligations he/she is giving up by signing the prenup.
· Should spousal support be included in the agreement, the spouse against whom enforcement may be sought must have a counsel. Otherwise, said provision will be unenforceable. This will apply even if the party expressly waives his/her right to an attorney.
The chances that the prenup agreement may be deemed unenforceable are higher when one party is not represented by a counsel. Therefore, if you wish to enter a prenup, you should seek the help of an attorney. And you should insist that your prospective spouse should also have a counsel. Otherwise, all your efforts in drafting a prenup may just go to waste
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com