A California prenuptial agreement provides for what happens to property in the event of a divorce. A prenup is a negotiated contract that identifies rights, obligations, property division, and potentially spousal support in the event your marriage ends in divorce. Having an agreement in place can save expensive divorce litigation and more importantly, provide transparency to the finances in your relationship. San Francisco Bay Area prenup attorneys will answer the following frequently asked questions for clients:
What is the process for getting a prenup?
In order to create an enforceable and valid prenup, there are several legal formalities.
Both parties must be represented by separate independent attorneys,
Disclose fully their finances (including any assets and debts), and
The final form of the agreement must be in the hands of each party at least 7 days prior to signing the document.
How much does a prenup cost?
The cost of a prenup can range between $2000 - $6000 per person. The cost depends on the sophistication of the agreement, the organization of the parties, and the collaborative nature of the opposing attorney.
How long before our wedding date should I hire an attorney for a prenup?
Ideally you should hire your California prenup attorney at the same time you pick your wedding venue. But In reality, you should reach out to attorneys at least one month in advance of your wedding date.
Does a prenup work?
Yes, and here is how:
· You can opt out of the default rules 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 a business acquired before marriage stays with that person. For example, let’s say you have a business worth $100,000 but after you get married you work on the business and it turns out that five years into marriage, your busines is worth $600,000. A prenup can ensure that the increase in value stays with you. Without a prenup, you may have to share some of increase in value with your spouse depending on.
· 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.
Do I need my own attorney if my fiancés attorney prepared the agreement?
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.
Why are Prenuptial Agreements expensive?
I always remind clients that prenups--while not cheap--are an investment. They're an investment in your financial future. This isn't a place you really want to cut corners.
A bad prenup--meaning one that either isn't legally enforceable, misses an important contingency, or that does something other than what you expect it to--isn't worth anything.
A document preparation service or a lawyer that offers a cookie-cutter "quickie" $500 prenup might turn out to work for you, but then again, it might not, and this is something you'll only find out years down the road, where it could well end up costing you far more than if you'd done it correctly.
Every client has a different set of circumstances, goals, and intents, so each client needs a separate prenup, which isn't really something a lawyer can do in three hours or for $500.
Do we need to have our prenup notarized?
I suggest that my clients notarize their prenups to enforce the formality of the agreement. However, there is no specific legal requirement that a premarital agreement be notarized or recorded to be effective.
What is California law on prenups?
Family Code Section 1500 provides: “The property rights of husband and wife prescribed by statute may be altered by a premarital agreement or other marital property agreement.”
Family Code Section 1612 provides what two parties may contract for in a prenup:
1. Rights and Obligations of Property
2. Right to buy, sell, transfer, encumber, use and manage.
3. Distribution of property on death.
4. Death benefits in life insurance policies.
5. Choice of Law
6. Spousal Support
7. Any other matter so long as it is not in violation of public policy.
What is the seven-day calendar rule?
Family Code 1615 states that an agreement is not enforceable if the party against whom enforcement is sought had less than seven calendar days between the time that the party was first presented with the agreement and advised to seek independent counsel, and the time the agreement was signed.
That sounds confusing, right? The Courts have also found this issue to be less than clear. In 2011, an Appellate Court case in California held that the seven-day waiting period may not apply if the parties are represented at the outset of premarital agreement negotiations. Marriage of Cadwell-Faso & Faso. Even so, if possible, most California family law attorneys require a seven-day waiting period for signing, to make sure that all statutory requirements are met.