Finding “the one,” and getting married is exciting for couples. Sometimes a prenuptial agreement is the last thing on their minds, especially when they don’t expect their wonderful relationship to ever fall apart.
However, when couples get married, they must remember that if their marriage does end in divorce, there will be some definite financial ramifications, especially if they are in a high-net-worth marriage.
Engaged couples need to remember that California is a community property state, which means that most property acquired during the marriage is subject to division, a 50/50 split.
While some couples may be uncomfortable sharing the details of their finances, they must know that once they say “I do,” both spouses are equally entitled to the money earned during the marriage, regardless of who earned it.
If you have significant assets, children from a previous marriage, or if you own a business and you got married without a prenuptial agreement, you may want to seriously consider drawing up a postnuptial agreement, which essentially acts like a prenup, the only difference is that it is created after the marriage has taken place.
How a Postnuptial Agreement Works
As we mentioned earlier, under California’s community property laws, both spouses are entitled to 50 percent of the assets acquired during the marriage. However, when you draft a postnuptial agreement, you can dictate different terms should your marriage end in divorce.
For example, if you want your earnings during the marriage to remain separate, you can spell that out in the postnuptial agreement. Or, if you want your children from a previous marriage to receive certain property or assets, you can address that in the postnuptial agreement.
This document can outline who will be responsible for certain debts, and it can ensure that a stay-at-home parent receives a sufficient settlement should the marriage end in divorce. Providing the terms are not unconscionable, spouses have a lot of flexibility to tailor their own terms.
If you own a business, have children from a previous marriage, or recently experienced great financial success, you should consider drafting a postnuptial agreement.
Most legal and financial experts agree that from a legal standpoint, prenuptial agreements are preferable in the above situations, especially in the absence of a prenup.
If you need a Los Angeles family law attorney to draft a postnuptial agreement, contact Claery & Hammond, LLPfor a consultation.