Preparing for your impending nuptials is usually an exciting time in your life, however, if you are one of those individuals who has worked hard for many years to acquire certain assets, it can also be a stressful time.
For many people, the idea of a pre-nuptial agreement is insulting and ridiculous. However, for others, it is a way to ensure that the things you have worked so hard for are protected in the event of a divorce.
Community Property and Separate Property
In California, except as provided by statute, community property is all property acquired by a married person during marriage while domiciled in California. (Fam. Code §760; Marriage of Bonds (2000) 24 C4th 1, 12.) In contrast, separate property includes property owned before marriage, property acquired during marriage by gift, bequest, devise or descent; and the rents, issues and profits of any such property. (Fam. Code §770(a)(1)(2) & (3).) At first blush, it seems that California law will automatically protect any separate property assets of yours in the event of a divorce. However, this is not always the case.
For example, lets say that you own your own business prior to marriage and your business is lucky to break even on a good month. Fast forward five years — now you are married and your business is thriving and you have expanded to a second location. Was this the result of your efforts or as a result of community contributions to the business? Without a pre-nuptial agreement in place to clearly delineate what will happen with your separate property business in the event of a divorce, your soon to be ex-spouse could walk away with a portion of your business (or the cash equivalent).
Benefits of a Pre-Marital Agreement
Although it can be a touchy subject prior to marriage, if you have legitimate concerns about protecting your assets, both present and future, it is a good idea to have an open and honest conversation with your future spouse. By discussing the expectations of each party prior to marriage, you may be able to alleviate any stress or fears regarding what is considered a fair and equitable division of the assets and debts of the marriage, thereby allowing you to focus on what matters…your relationship. Reaching an agreement before marriage on key issues such as what property will remain separate and how community earning and acquisitions are to be dealt with can save each party from the common headaches and heartaches of a traditional battle over division of assets and debts in the event of a divorce. Freedom to leave gives you the freedom to stay.
If you are getting ready to take the marital plunge and think you may be interested in a pre-nuptial agreement, please contact our office to set up a free consultation with a family law attorney.
Amy R. Lovegren-Tipton, Esq.
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