California Family Code section 1612 lays out what can and cannot be included in a premarital agreement. The most important issues in just about any premarital agreement are the property rights of the parties and whether or not there are any limitations on spousal support.
Yes and no. Many times, if a party is just trying to protect what they already have or protect the separate character of a future inheritance, a premarital agreement may not be necessary. This is because even without a premarital agreement, property acquired prior to the marriage is the separate property of the acquiring spouse. Property acquired by inheritance or by gift is also separate property, even if it is acquired during the marriage. There are still some pitfalls to be wary of here.
Absent a premarital agreement, if skill, labor, or effort is applied to separate property, the community may have an interest in the appreciation of such separate property because, absent a premarital agreement, labor belongs to the community. Also, absent an agreement to the contrary, a loan taken out during the marriage will be presumed to be a community loan and that presumption can be difficult to defeat.
If I want there to be no spousal support for either party, can a prenuptial agreement help me?
Again, it depends. In California, the unconscionability of a premarital agreement is determined at the time of enforcement. This means a court looks at the circumstances between the parties at the time of the divorce, not at the time they signed the premarital agreement. If you want a spousal support waiver to hold up where the other party has no education, no skills, and is expected to raise children, there is a very good chance that such a waiver won’t hold up. However, where both parties are educated, skilled, and are self-supporting, the Court would be much more likely to enforce such a waiver.
If I want to protect myself from my potential spouse’s premarital debts, can a premarital agreement help me?
Yes. Under California law, the separate property of a spouse cannot be used to satisfy the premarital debt of a spouse, unless both parties are signatories to the debt. The community estate, however, can be used to satisfy premarital debts. If a premarital agreement limits the creation of community property, it is also limiting the possible sources of community property that could be used to satisfy a party’s premarital debts.
In California, premarital agreements have quickly become a muddled and complex area in the law. Parties are well-advised to seek legal counsel. In fact, it should be noted that any limitation on spousal support is automatically invalid if the party who is seeking to avoid enforcement is not represented by counsel!
Feel free to contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding prenuptial agreements. Nancy J. Bickford is the only Certified Family Law Specialist (CFLS) in San Diego County who is also a licensed Certified Public Accountant (CPA) with a Master of Business Administration (MBA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.