Prenuptial agreements allow couples to define the legal terms of their marriage rather than be subject to California’s default marital rules. If you are getting married, you may be considering a prenuptial agreement.
It is essential to understand some common prenuptial agreement clauses. These provisions can have significant consequences on your marriage and, if it comes to pass, a divorce.
Discuss your prenup with a qualified attorney at Cyrus Pacific Law.
Below, Cyrus Pacific Law explains some standard prenup clauses and their significance. Understanding these clauses allows you to make an informed decision about your prenup. However, it is always a good idea to consult with an attorney when drafting a prenuptial agreement to ensure that it addresses your specific concerns.
Common Prenuptial Agreement Clauses
Below are some common prenuptial agreement clauses. The most important clauses vary depending on each couple’s needs and goals.
1. Division of Property Clause
A division of property clause is one of the most common prenup terms. This clause allows the parties to designate the division of assets and debts in the event of a divorce.
Default California Law: Separate and Community Property
Unless you have a prenuptial agreement establishing how to define separate property and divide marital property, your marriage is subject to California’s default matrimonial laws.
Under California law, separate property is property owned by one party before the marriage or acquired during the marriage by gift or inheritance. All other property that either spouse acquires during the marriage is community property. Upon divorce, a court generally divides community property equally between the spouses.
Separate property remains the property of the individual owner. Sometimes, however, a court may consider something to be community property even if one spouse believes it is separate property. For example, if the other spouse invested time or effort in improving the property, a court may find that they have some interest in that property.
Property Distribution Clause
In a division of property clause, you can specify that assets or debts typically considered community property will be treated as separate property upon divorce. For example, you may state that individual credit card debt acquired during the marriage is separate rather than community debt.
Your prenuptial agreement could also establish a specific property division. For example, it can allocate a more significant portion of the marital estate to one party in exchange for them waiving spousal support.
Property Distribution Upon Death of a Spouse
You can also include a clause specifying how a court should distribute the spouses’ separate property if one spouse dies. Generally, in the event of the death of one party, their separate property passes to the heirs or beneficiaries designated in their will or trust or to the heirs or beneficiaries determined by state law if the deceased party did not have a will or trust.
However, you can use a prenuptial agreement to specify a different distribution. For example, you may specify that if a spouse dies, the other spouse will receive the deceased spouse’s separate property.
2. Spousal Support Clause
A spousal support clause specifies how spousal support, also known as alimony, will be handled upon divorce or separation. Spousal support is a payment made by one spouse to the other during or after a divorce. Spousal support provides the receiving spouse financial assistance for a reasonable period to allow them to become financially self-sufficient.
A spousal support clause in a prenuptial agreement can specify the amount of spousal support, the duration of the support payments, and other terms and conditions. For example, the clause may specify that one party will pay spousal support to the other spouse for a specific period of time.
You may include a spousal support waiver in the prenuptial agreement. This may be desirable for various reasons, such as if the parties have agreed to an unequal division of assets or want to avoid seeking financial support from the other party.
3. Continuation of Business Clause
A continuation of business clause specifies what will happen to a business owned by one of the spouses upon divorce. Generally, a business, even if owned and controlled by one spouse, may be treated as a marital asset.
A continuation of business clause, however, may alter this designation. For example, you may specify that the business will remain the property of the individual owner and will not be subject to division. You could also state that the business will be divided equally between the parties. Or you can agree that one spouse has the right to continue operating the business and will buy the other spouse out upon divorce.
4. Pet Clause
A pet clause clarifies what will happen to your pets if you get divorced or separated. It may specify which party will get custody of the pets and may include provisions regarding the financial responsibility for the care of the pets.
5. Sunset Provision
A sunset provision stipulates that the agreement will expire or become void after a certain period. Generally, a prenuptial agreement remains in effect until the marriage ends. A sunset provision, however, may specify that the agreement will expire or become void after a certain period, such as after a certain number of years of marriage.
Provisions You Cannot Include in a Prenuptial Agreement
Even if you’d like to, spouses cannot include certain provisions in a prenuptial agreement, such as:
- Waivers of child support: You cannot waive a child support obligation.
- Waivers of child custody and visitation: Neither party can waive their rights or responsibilities regarding child custody and visitation.
- Infidelity provisions: Infidelity is not a ground for divorce in California; thus, a party can’t be penalized for infidelity in the prenup.
- Waivers of the right to seek legal advice: Neither party can waive the right to seek legal advice before signing the agreement.
You should speak with an attorney when drafting a prenuptial agreement to ensure that you don’t include anything that won’t be legally enforceable.
Contact Our Office for Help with a Prenuptial Agreement
There are many potentially crucial prenuptial agreement provisions depending on your circumstances. You need an experienced prenuptial agreement attorney to tailor your prenup to meet your relationship goals. Fortunately, Cyrus Pacific Law can help. We know California family law and can help you craft a legally enforceable prenuptial agreement specific to your needs. Contact us today.