How should we manage our money during marriage?

Here are some tips on how couples can combine their finances and navigate wage inequity in their relationships.:

1. Acknowledge wage inequity: Recognize that most couples, regardless of their sexual orientation or gender, tend to have wage inequity. Factors like the gender pay gap contribute to this disparity. It's important to consider non-monetary contributions, such as childcare or health insurance, which may offset the imbalance.

2. Finance management models:

   a. Combine both incomes into one pot: This traditional approach involves pooling all income into a joint account and managing expenses together. Communication about finances is crucial. This model is commonly used by couples.

   b. Combine some part of your income: Couples can choose to allocate a fixed sum or a percentage of their income to a joint account for shared expenses. They also maintain personal accounts for individual financial independence.

   c. Selectively choose to cover certain expenses: Some couples prefer to manage money separately and selectively decide which expenses they cover individually. This approach suits those valuing financial control or independence.

3. Consider a prenup: Understanding the legal aspects related to shared assets and liabilities is important, especially in the event of separation or divorce.

4. Open communication and agreement: Discussing financial approaches with your partner is crucial to determine what works best for your relationship. Once you agree on a strategy, establish a system to simplify money management and reduce stress.

5. Be aware of economic inequality and wage gaps: Stay informed about economic inequality issues and gender wage gaps. This awareness can contribute to healthier financial discussions and decision-making within your relationship.

What was Marriage of Marvin?

In a pivotal California Supreme Court case called Marvin v Marvin [1976) 18 C3d 660], the court recognized the increasing trend of couples living together without getting married. This groundbreaking ruling set a precedent allowing partners in non-marital relationships to pursue division of property and spousal support upon separation. The case involved Ms. Marvin, an aspiring Hollywood actress, and Mr. Marvin, an established Academy Award-winning actor.

Over the course of their six-years of living together, Ms. Marvin had changed her last name to match her partner's, forsaking her budding acting career to focus on their household (though they had no children). She contended that Mr. Marvin had verbally agreed to provide for her financially and share his earnings.

However, once their relationship ended and the case reached the California Supreme Court, Ms. Marvin was unable to provide sufficient evidence of this oral contract that could have entitled her to a share of the property that would have been considered communal if they had been married. The court ruled that the benefits accorded to married individuals couldn't be extended to those who had chosen not to marry.

Nonetheless, the ruling left room for future cohabiting couples to claim their rights. The court suggested that if cohabiting individuals could demonstrate an explicit or implicit agreement, they might be able to claim the financial security that Ms. Marvin could not.

Is your premarital agreement enforceable?

Premarital agreements often get a bad rap, but the agreements are not about planning for divorce, but rather about proactive planning for various circumstances that may arise during your marriage. By understanding the rules and regulations surrounding prenups, you can approach the process with confidence. Here are some tips:

Understanding Enforceability: It's natural to question the enforceability of prenups. However, in California properly drawn premarital agreements are binding and enforceable. They are very rarely set aside or voided. The California Legislature has recognized the importance of these agreements by enacting the Uniform Premarital Agreement Act (CC§5200 et seq). This

statute outlines the basic requirements for a valid premarital agreement and states the specific circumstances under which an agreement is unenforceable.  An may be set aside if shown to be unfair at the time it was executed. An agreement also may be set aside if assets and liabilities were not fully disclosed, unless the parties expressly waived disclosure or knew apart from the agreement the full extent of the other’s economic circumstances. properly drafted agreements are binding and enforceable if they meet the legal requirements of your jurisdiction.

Full Disclosure is Key: Honesty and transparency about money play a pivotal role in premarital agreements. Complete disclosure of assets, debts, and financial information is required to ensure fairness and avoid potential challenges in the future.

Tailoring the Agreement to Your Needs: Each couple's circumstances are unique, so it's important to customize your prenup to align with your specific goals and concerns. Whether it's safeguarding pre-marital assets, addressing spousal support, or determining property division, work with a qualified attorney to create an agreement that reflects your needs.

Legal Representation:  Each spouse should have independent legal counsel to ensure their rights and interests are protected. Not having counsel is one of the reasons a prenup can be held unenforceable and thus having compete counsel is necessary.

Communicating Openly: Discussing your desire for prenup can be challenging, but open communication is key. Approach the topic with empathy and understanding, emphasizing that a prenup is a practical decision that doesn't diminish the love and commitment you share. Encourage open dialogue to address any concerns or misunderstandings.  

Debunking Common Myths About Prenuptial Agreements in California

Prenuptial agreements, often referred to as prenups, have gained both popularity and notoriety over the years. While they can be valuable tools for protecting assets and establishing financial expectations in a marriage, they are surrounded by numerous myths and misconceptions. In this blog post, we debunk some of the common myths about prenuptial agreements specifically in the context of California law.

Myth 1: Prenups Are Only for the Wealthy

Fact: Prenuptial agreements are not exclusive to the wealthy. They can be beneficial for individuals with various income levels and assets. Whether you have personal property, a business, or retirement savings, a prenup can help clarify how these assets will be handled in the event of a divorce or separation, ensuring fairness and protecting your interests.

Myth 2: Prenups Are Unromantic and Indicate a Lack of Trust

Fact: Contrary to popular belief, discussing a prenuptial agreement does not signify a lack of trust or commitment in a relationship. In fact, it can promote open and honest communication about financial matters, leading to a stronger foundation. Prenups allow couples to have important discussions about financial expectations, obligations, and responsibilities, fostering mutual understanding and trust.

Myth 3: Prenups Set the Stage for Divorce

Fact: While it is true that prenuptial agreements outline how assets will be divided in case of a divorce, they do not cause divorces. Prenups simply provide a framework for addressing financial matters should the marriage end, offering clarity and potentially reducing conflicts during a potentially difficult time. They can actually help couples navigate potential challenges more smoothly.

Myth 4: Prenups Are Not Enforceable in California

Fact: Prenuptial agreements are generally enforceable in California if they meet certain legal requirements. These requirements include voluntary and informed consent from both parties, full disclosure of assets and debts, and the absence of coercion or fraud. It is crucial to work with an experienced family law attorney to ensure that your prenup complies with the state's legal standards.

Myth 5: Prenups Only Protect the Wealthier Spouse

Fact: Prenuptial agreements can protect the interests of both spouses. They are customizable and can address a variety of concerns, such as property division, spousal support, and debt allocation. A well-drafted prenup considers the needs and goals of both parties, ensuring fairness and protecting the rights of each individual, regardless of their financial standing.

Myth 6: Prenups Cannot Address Child Custody and Support

Fact: While prenuptial agreements cannot determine child custody or support arrangements, they can include provisions related to financial support for children from a previous relationship or anticipated future children. However, child-related matters are ultimately determined by the court, which considers the best interests of the child at the time of the divorce or separation.

Conclusion:

Prenuptial agreements are powerful legal tools that can provide clarity, protection, and peace of mind in marriages. By debunking these common myths, we hope to demystify prenups and shed light on their true purpose and benefits. If you are considering a prenup in California, it is essential to consult with an experienced family law attorney who can guide you through the process and ensure that your agreement meets all legal requirements. Remember, an informed decision based on accurate information is the key to safeguarding your financial future.

How are debts allocated in a divorce

Below is a helpful chart about how debts or liabilities are handled in a divorce. Imagine the following:

Scenario 1: John and Emily got married on January 1, 2022. Prior to their marriage, John had incurred a debt of $10,000. According to Fam C §2621, the debt incurred before marriage must be confirmed to the spouse who incurred it, without offset. Therefore, John would be solely responsible for repaying the $10,000 debt.

Scenario 2: Sarah and Michael decided to separate on June 1, 2023, after being married for three years. During their marriage, they accumulated several debts, including credit card debt and a car loan. According to Fam C §§2550–2552 and 2601–2604, debts incurred after marriage but before separation must be allocated as part of the overall division of the community estate. In this case, the debts would be divided equally between Sarah and Michael during the divorce proceedings, subject to any specified exceptions.

Scenario 3: Mark and Lisa have been separated since January 1, 2023, and their divorce judgment was entered on April 1, 2023. After their separation, Mark incurred a debt of $5,000 for medical expenses. As per Fam C §2623, the assignment of a debt incurred after the date of separation but before entry of judgment depends on the purpose for which the debt was incurred. In this scenario, since the debt was for Mark's medical expenses, it would likely be allocated to Mark alone to repay.

Scenario 4: After separating on July 1, 2023, Tom and Sarah are in the process of getting a divorce. During this period, they jointly decide to sell their house. In order to make necessary repairs and renovations to increase the property's value before selling, they take out a home improvement loan of $20,000. Since this debt was incurred for the purpose of jointly enhancing the value of their community property, it could be allocated jointly as part of the overall division of the community estate under Fam C §2623. In this case, Tom and Sarah would share the responsibility for repaying the $20,000 home improvement loan.