What is a Postmarital Agreement?

A Postmarital Agreement, sometimes called a Postnuptial Agreement, is an agreement created by a couple during their marriage for many of the same reasons that an engaged couple creates a Premarital Agreement: to govern their financial lives during the marriage and to determine what will happen in terms of property division and spousal support if they should divorce.   

Requirements

There is an additional enforceability hurdle for couples wishing to enter into a Postmarital Agreement: as spouses, they are subject to a set of fiduciary duties that do not exist for fiancés.   This includes the duty not to take financial advantage of the other spouse.  Because a Postmarital Agreement usually includes some circumventing of community property law, the Agreement is going to be subject to a presumption that one spouse is taking advantage of the other.

So while Postmarital Agreements do not appear to be expressly governed by California Family Law section 1600, case law has confirmed that the same rationale applies when enforcing them:  each party must sign “freely, voluntarily and intelligently.”  

In order to avoid the presumption of unfair advantage, most professionals believe that it is imperative that both spouses be represented by attorneys and that all steps be taken to show that both spouses signed the agreement freely, voluntarily and with full knowledge of rights he or she could be giving up. 

If you are interested in a pre or post nuptial agreement, you can contact me at Amanda@gordonfamilylaw.com for more information.

What can't I include in my prenup?

You can protect your property, define your marital rights, limit litigation upon dissolution, and limit litigation on death.  For example, you can waive pension rights, waive property rights, and may even waive probate rights. You can also prevent your spouse from taking a stake in your business or equity. 
Here are some examples of provisions that you cannot do and that have been found unenforceable by California courts:

(1)   Provision for liquidated damages if Husband had a sexual affair during the marriage.

(2)   Clause that made Wife pay a financial penalty if Husband’s drug addiction reoccurred

(3)   Prenup that gave Wife more money if she refrained from placing Husband in a nursing facility when he lost the ability to make decisions.

If you are drafting a premarital agreement and have questions,  you can contact me at Amanda@gordonfamilylaw.com for more information.

Prenups are smart. Here are some reasons why:

  • You can opt out of the default California law and prevent your spouse from getting credit for the time, skill, and effort that you put into managing your money during the marriage. A prenup can ensure that any increase in value of property acquired before marriage stays with that person.  For example, let’s say you have stock worth $100,000 but after you get married you buy a bunch of Facebook or Uber stock. Now, five years into marriage, your stock portfolio is worth $600,000.  A prenup can ensure that the increase in value stays with you. Without a prenup, you would have to split the increase in value with your spouse.
  • You won’t be stuck with your fiancés debt. A prenup can protect your assets from creditors - which is something the default rules do not protect for. If your fiancé has significant credit card debt, a prenup can ensure that creditors stay away from your property.
  • You won’t have to worry about creating a partnership interest for your spouse in your business. The default in California law is that your spouse accrues an interest in your business over the course of marriage. A prenup can prevent your prospective spouse from becoming an unwanted business partner at divorce.
  • You can ensure that choices like relocation, raising a family, and supporting your spouse during grad school are recognized and compensated appropriately in the event of divorce.

If you are drafting a premarital agreement and have questions,  you can contact me at Amanda@gordonfamilylaw.com for more information.

Do I need my own attorney for a Prenup?

Yes.  Prenuptial agreements require that both parties are fully informed about California law and that they disclose finances. Having attorneys on both sides of the agreement prevents future questions about fairness.  A Prenup without two attorneys may be subject to future litigation and enforcement.  Think of it like paying for both the bachelorette and the bachelor party.If you are drafting a premarital agreement and have questions,  you can contact me at Amanda@gordonfamilylaw.com for more information.

Getting Married? Here is why you want a Prenup.

California is a community property state, which means that if your tech startup idea takes off during the marriage, the business will be split (often 50:50) if you get a divorce. This includes any appreciation to any property (like RSU grants and condos) that you acquired prior to marriage. You can opt out, but only with an agreement.  

Gordon Family Law offers workshops at technology companies and individual client services for pre-marital agreement drafting, review, and negotiating agreements entered into prior to marriage.  If you are working in Silicon Valley, have equity in a company, or previously purchased assets, you should be thinking about a prenup.  If you are drafting a premarital agreement and have questions,  you can contact me at Amanda@gordonfamilylaw.com for more information.