Since the 1950s, Hollywood and the Greater Los Angeles Area have been a magnet for the rich, the beautiful, and the successful. From Millennial entrepreneurs to Silicon Valley transplants, to A-list actors, models, and top-ranking CEOs, Southern California is the place to be.
Given the level of wealth and success in Los Angeles, there is a definite market for prenuptial agreements, more so than in many other parts of the country. In fact, the commonality of prenups in these parts makes our job as family law attorneys that much easier.
Fiancés in Los Angeles are not necessarily shocked at the idea of drafting a prenup these days because these agreements are becoming a normal part of dating wealthy individuals – at least that’s been our experience.
Do Prenups Mean Fiancés Don’t Trust Each Other?
Prenuptial agreements do have an unromantic element because it leaves the future of the marriage open to interpretation. In effect, some fiancés are reluctant to sign a prenuptial agreement because it symbolizes a lack of faith in the relationship.
Even though people can have misgivings about prenuptial agreements, they are very useful legal instruments in the event of a divorce. Given the high chances of a divorce, prenups make sense. After all, if the marriage does last, the couple will never have to pull out the prenup because without a divorce, it has no force.
Prenups Give Clarity in the Event of Divorce
Signing a prenup has no bearing on whether or not the marriage will last. People don’t divorce because of prenups, they divorce because of adultery, financial problems, disagreements in childrearing, domestic violence, and other marital problems. You’d be hard-pressed to find someone who filed for divorce because of a prenup.
If you elect not to sign a prenup and your marriage ends in divorce, your divorce will be governed by California’s complex divorce laws, which are found under the California Family Code and Probate Code.
If you and your spouse cannot come to terms on a settlement agreement, and you don’t have a prenup, a California judge will decide how to divide your marital assets and debts. Meaning, you give up all control.
When you choose to draw up a prenup before the marriage, you and your spouse decide ahead of time how your assets and property will be divided, so long as the negotiations are not unfair. If the agreement leaves one spouse penniless after the divorce, it would be nearly impossible to get any family court judge to enforce the agreement.
Don’t forget – prenups don’t necessarily protect only the wealthy spouse; the idea is to draft them so they protect both spouses.
Prenups Open the Communication Channels
Some couples get married and the less-wealthy spouse knows little to nothing about the wealthy spouse’s finances. A far cry from a lack of trust, drafting a prenuptial agreement can actually enhance a couple’s trust in each other.
A prenup can actually strengthen people’s relationships because they’re putting all of their cards on the table by being open and honest about their financial situation. The process itself is all about full disclosure, so fiancés are being completely transparent, which encourages honesty in the relationship.
Additionally, prenups prepare couples for marriage. When you get married, sooner or later you will have to discuss money, bills, mortgages, insurance, retirement funds, and estate planning – there’s no way around it.
Once you get back home from the honeymoon, it will only be a matter of weeks before you start having to talk about who’s earning money, how it’s being saved, and how it’s being spent –all integral parts of a marriage.
A Prenup Can Give You Peace of Mind
A lot of people do not like to have “fear of the unknown.” It can be unsettling to be in a high-net-worth marriage and to not know the fate of the marital assets should the marriage end in divorce. Whether you’re the wealthier spouse or the less-wealthy spouse, a prenup can give you much-needed peace of mind.
No one plans to be disabled in a car accident on the 405 or 101 freeway. No one plans to get early Alzheimer’s Disease in their 40s or 50s. No one plans to have their house burn down, but they still buy insurance. Hopefully, you’ll never need your prenuptial agreement, but if you do, at least you’ll know what to expect because the mystery element will be removed from the divorce.
What a Prenup Cannot Do
Prenups cannot do anything and everything that people want; they have limitations. California prenups cannot govern child custody or child support manners. Anyone who tells you otherwise is mistaken. If a couple marries and later has children, the court will have jurisdiction to decide on the child’s best interests – that is if the parents are unable to reach an agreement on their own about these matters.
California law does, however, allow spouses to limit or waive spousal support on one condition: it cannot be unconscionable (unreasonably unfair). For example, let’s say the prenup says the less-wealthy spouse will only receive $500 a month in spousal support, but the wealthy spouse is worth tens of millions and the less-wealthy spouse has virtually no assets after the divorce.
If the wealthy spouse tries to enforce the provision of the prenup that strictly limits the amount of spousal support, and they were married over 10 years and the spouse would be virtually broke, a judge probably won’t uphold the spousal support provision of the agreement.
In the Absence of a Prenup
Under California’s community property law, each spouse is entitled to half of the marital estate in the event of a divorce. The marital estate consists of all assets acquired during the course of the marriage, with the exception of separate property, such as gifts and inheritances.
If you don’t have a prenup, by law, you and your spouse would be entitled to half of all community income and assets acquired during the marriage, regardless of who earned them or whose name is on title. A prenup on the other hand, can determine which assets and “community” and which assets are kept separate in the event of a divorce.
Looking for a Los Angeles family law attorney to draft a prenuptial or postnuptial agreement for you? Contact Claery & Hammond, LLPtoday.