Providing Divorce Mediation Services Throughout California
Providing Divorce Mediation Services Throughout California
Dina Haddad and her team provide expert mediation services for Californians. If you want help related to any family law issue, call us or book a consult.
Understanding prenuptial and postnuptial agreements is crucial when planning your financial future in California. These legal contracts can serve as alternatives to California’s community property laws, offering asset protection and clarity for financial transfers.
Although a prenuptial agreement (prenup) and a postnuptial agreement (postnup) are both legal contracts, they have different legal meanings and uses in California.
Understanding the differences can help you make informed decisions about your financial security and whether to enter into a marriage. For expert advice on your marital agreement, book a free Marital Agreement consult with Dina Haddad – an expert prenup and postnup mediation lawyer– for a California-focused approach.
Before deciding on prenups or postnups, you need to understand what both agreements are and when to use them.
Definition: A prenuptial agreement is a contract both parties sign before their marriage. It is a legally binding agreement that sets out how you’ll handle finances, assets, and debts should your marriage come to an end.
A prenup is not a plan for divorce; it is a plan for marriage that establishes clear understanding around your financial partnership.
While both contracts protect your interests, they safeguard different relationships. A prenup is between two individuals who are preparing to marry in the near future. A marriage needs to take place in order for a prenup to be valid.
A cohabitation agreement does not require marriage. A California cohabitation agreement is a contract between romantic partners who share a residence but do not have intentions of marriage.
A prenup must be signed before your wedding ceremony takes place. Written prenuptial agreements signed by both parties, in contemplation of marriage, will become effective upon marriage.
Can a prenup be signed if you are already married? No. Because after you marry, any agreement similar to a prenup becomes a postnuptial agreement, which has different legal constructions.
Your prenuptial agreement may touch on a couple of important issues:
Definition: A postnuptial agreement is the contract you sign after marriage to modify how you will divide assets, how you’ll handle debts, and your financial duties.
Different from prenups, postnups are intended to address any changes experienced during your marriage, or to adjust or resolve financial disputes.
You can develop a postnup whenever after your wedding. There is no waiting period – whether you are married for one month or twenty years, you can create this agreement whenever your situation changes.
Postnups address similar financial matters as prenups, with one crucial limitation:
In California, it is also important to note that postnuptial agreements cannot waive or limit spousal support rights, unlike prenuptial agreements. Need help drafting a postnup agreement? Contact a postnup mediation expert today.
Prenuptial and postnuptial agreements serve a very similar function in protecting your financial interests, just under different governing laws in California. Let’s take a closer look at both legal concepts.
Your prenuptial agreement must be completed before the wedding ceremony. California’s 7-day rule requires a final version of the prenuptial agreement to be delivered to the other party at least seven days prior to signing.
This requirement gives both parties enough time to consider terms and review with independent counsel, without the pressure of a wedding date looming.
Postnuptial agreements can be developed at any time during your marriage – there is no waiting or deadline. Whether you started with a marriage of six months or fifteen years, you can establish a postnuptial agreement when your financial situation changes, or you want to clarify existing arrangements.
California premarital agreements are governed by the Uniform Premarital Agreement Act (UPAA), and there are some special protections such as:
Postnuptial agreements differ from prenuptial ones because a postnuptial agreement is created by spouses already legally bound to one another and have the following additional requirements:
Prenuptial agreements and postnuptial agreements can both deal with assets, debts and financial responsibilities. They can outline what property will remain separate property and how to allocate debts that were acquired prior or during the marriage.
Both prenuptial and postnuptial agreements can waive, or limit, spousal support and, therefore, provide you with a significant level of control over your future alimony obligations.
However, if it is very unfair at the time of enforcement, the court can refuse to enforce the agreement. For this reason, it is best to mediate a prenuptial or mediate a postnuptial, and then in addition have attorneys sign off on the agreement, one attorney for each party.
Either premarital or postmarital, both agreements can protect family inheritances, gifts, and business interests. You could, for example, designate that property will remain separate even if that property appreciates in value during the marriage, or you may define how ownership of the business will be structured.
In order for either agreement to be enforceable it must meet the following elements:
Courts may refuse to enforce agreements when they find:
California courts do enforce postnuptial agreements (postnups), but they don’t treat them like any other contract. The court will apply more scrutiny in reviewing the postnuptial agreement to evaluate fairness due to the fiduciary relationship between spouses.
On the other hand, Prenups face standard contract review. The court may determine that the agreement was one-sided or did not follow proper execution, but this normally applies to postnuptial agreements more strictly.
You can modify either type of agreement, but the methods for doing so will differ. A prenup can be modified using postnuptial agreements subsequent to marriage.
In contrast, postnuptial agreements may be modified by a mutual written agreement as both spouses must agree in writing to change any aspect of the postnuptial agreement. Any modifications must comply with the same legal requirements as the original agreement.
Both types of agreements require financial disclosure including their property (assets), debts, income, and expenses. If either spouse does not fully disclose information about their finances, the agreement may be void.
Prenups and postnup agreements cannot address child custody and child support obligations; these must be established by a court based on the best interests of the child. Also, both prenups and postnups must comply with California public policy.
They cannot include clauses for illegal activity or non-financial personal conduct; however, the major limitation is that postnups cannot waive spousal support rights, but prenups can include these provisions.
This table illustrates the key differences between prenups and postnups in California. The main difference between both contracts is the timing, as this dictates what happens in the marriage:
| Aspect | Prenup | Postnup |
|---|---|---|
| Timing | Before Marriage | After Marriage |
| Effectiveness | Starts at marriage | Immediate upon signing |
| Legal Standard | UPAA requirements | Higher fiduciary duty |
| Court Scrutiny | Standard review | Heightened scrutiny |
| Modification | Through postnuptial agreement | Mutual written agreement |
As previously established, while prenups provide more expansive protections, they require proactive planning.
Postnups, on the other hand, provide more flexibility while being married, but come with additional challenges – mainly the stricter enforcement and scrutiny. Always consult an attorney to determine your optimal course of action.
Suppose you are unsure about the type of agreement to tailor to your specific situation. In that case, these real-life examples illustrate the ideal situations for obtaining prenuptial and postnuptial agreements to safeguard your financial future.
Below are some scenarios that make sense to get a prenup:
If you have substantial wealth and you’re about to marry for the first time, you may want to consider a prenuptial agreement. This wealth could include real estate, investment accounts, retirement funds, or collectibles that you’ve gathered before meeting your spouse.
A prenuptial agreement helps you keep these assets as separate property and protects your hard work that took many years to accumulate.
Business owners face unique exposure to risk without prenuptial protection. If you own a company, professional practice, or valuable intellectual property, you may open yourself to community property claims on these assets if you marry.
A prenuptial agreement may help you keep your business assets separate so your spouse will not have ownership rights that could be problematic for your business or require you to sell it. In some cases, this might allow you to divorce without needing to split assets.
Blended families create complexity around inheritance and a prenup can address these complexities. You need to protect all assets you want to give to your children from your previous marriage(s) while also being fair to your new spouse.
A prenup specifically identifies which assets pass to which beneficiaries and allows you to avoid complicated and lengthy legal fights while giving your children financial security.
When you are far more successful than your partner from a financial perspective, prenuptial agreements can limit future spousal support obligations.
This is especially important if you have enormous earning potential in medicine, law, business ownership, etc. The agreement will ensure that you are not liable for excessive alimony payments, while still treating your spouse fairly.
Family wealth needs protection to continue within your bloodline. If you do not have a prenup, the gifts received from your parents, or an expected inheritance may become community property if received during marriage.
Postnuptial agreements assist couples in modifying financial arrangements after marriage. Below are some circumstances for which a postnup may be beneficial:
If you receive an inheritance, experience a financial windfall, or have a successful business, a postnup provides clarity about your property and asset ownership, and prevents disputes about ownership in case your marriage ends.
After an affair or separation, a postnup can bring clarity and start rebuilding trust by creating written terms about financial and lifestyle changes to the marriage, and ensure there are fair and clear terms if divorce happens later.
If your prenuptial agreement no longer suits your situation – new children, your career changes – a post-nup can update the terms of your original agreement or create an agreement if you never created a premarital agreement.
Each of these situations provides clarity about finances while being able to adapt to changes in life. Need assistance drafting your postnup? Mediate with a professional today.
These agreements impact capital gains taxes (resulting from clarifying separate versus community property); alimony deductibility (if done correctly in accordance with IRS rules); and estate taxes (if you are preserving a family inheritance).
It is also essential to recognize that planning these marital agreements and taking them seriously can help reduce your tax obligations. Here are some planning opportunities to consider:
With careful drafting, couples can protect their wealth and remain tax-efficient. Consult a financial advisor or mediator to optimize your agreement.
Mentioning a prenup or postnup is no easy feat. However, if you can reframe your perspective, viewing financial planning as a means to trust rather than distrust, it becomes an easier conversation. Many people think of prenups/postnups as “planning for divorce,” but, in reality, it is about visibility and protection.
To reframe:
Some things to keep in mind while discussing Prenups/Postnups with your partner:
Want help starting the conversation? Contact Dina Haddad for expert mediation for a constructive discussion!
Choosing mediation saves 60-70% in fees compared to hiring a lawyer. It also saves time as issues are addressed in as few sessions, reduces conflict and allows future relationships to endure.
Mediation also typically results in more flexible and mutually agreed-upon agreements, where both parties feel heard and their needs are met. Though mediation helps couples save money and get the most of the family law matters done outside the court, however, it is not recommended in all cases.
Before making a commitment, ask the prenup or postnup mediator:
Mediation is typically suitable for the majority of situations, particularly for divorce consultations or to simplify complex marital decisions. However, attorneys are recommended to sign off on the prenuptial or postnuptial agreement.
Additionally, you may need to use a divorce attorney to negotiate the agreement for you where there is reluctance for financial disclosure, or a significant degree of imbalance in the power relationship.
These higher-risk situations involve coercion and require more legal direction and guidance to ensure a just and fair process with transparency, voluntary agreement, and compliance maintained throughout negotiations. Book a free Marital Agreement consult with our experienced mediators to protect your future without the drama of a courtroom.
Under California’s laws, prenuptial (before marriage) and postnuptial (after marriage) agreements provide an opportunity to protect your finances, with significant differences in timing and enforceability.
A skilled mediator can assist in making sure your agreement is fair, legally binding and tailored to your needs. Whether you want to safeguard assets, update your agreement, or restore trust, a marital agreement can protect the future of your relationship while providing greater clarity and security in your partnership. Protect your future. Schedule a free consultation with our expert mediator.
Families First Mediation is a pioneer in the field of divorce mediation. Our entire divorce mediation team takes great pride in being active trainers, divorce mediators and teachers of mediation in the greater California area. If you are considering a collaborative divorce, legal seperation or looking for a san jose divorce lawyer we have services that may be beneficial to you. Take advantage of our vast expertise and background in the field of divorce mediation and our genuine desire to help with your divorce mediation services.
