How to Create a California Prenuptial Agreement
Today, more and more couples in California are choosing to create a prenuptial agreement before getting married. Once you decide to create a California prenuptial agreement, you may wonder what this process entails. Here’s how to create a California prenuptial agreement, step by step.
Step 1: Each party should hire a separate attorney.
Both parties should find a separate, independent attorney to represent their interests when creating a prenuptial agreement. Each party brings different assets to the marriage and will want to protect different priorities. While one party can waive their right to independent counsel, this creates further requirements that must be met in order for the prenuptial agreement to be enforceable.
How can you find a knowledgeable attorney? Consider asking your estate planning attorney for assistance or a referral. Because a new marriage often means updating your estate plan to incorporate your new spouse, many estate planning attorneys also draft premarital agreements. If they don’t personally do this work, they will likely be able to refer you to an attorney who does.
Step 2: Both parties disclose their finances, including all assets and debts.
Both parties will need to list all of the assets and debts they are bringing to the marriage. Be sure to be honest and thorough in making this list, as failure to disclose information could leave the prenup vulnerable to being overturned in court later on.
Many prenuptial agreement attorneys will ask you to fill out an intake form prior to your initial consultation. The intake form can also serve as a helpful tool, prompting you to list your assets one category at a time.
Step 3: Both parties discuss and negotiate their financial future.
While not absolutely required, it’s a good idea for both parties to have a candid discussion with each other regarding their future financial life together. Decide whether you will have joint or separate bank accounts, who will pay bills, how you will file taxes (separately or jointly), and how large purchases will be made. Getting on the same track financially can save a ton of marital problems later down the line.
Step 4: The attorneys draft and review the prenuptial agreement.
Typically, one of the attorneys will draft the prenuptial agreement. Then the other attorney reviews it and makes suggested changes. The process continues until both parties are satisfied with the terms of the document.
A premarital agreement should:
- Define separate vs community property. Separate property stays in the name of the partner to whom it belongs. In the event of a divorce, the person who originally brought it into the marriage keeps it. Shared or community property should also be defined, along with a method for splitting it in the event of divorce.
- Decide how existing debts will be paid. Will the person who brought the debt into the marriage retain it after the marriage?
- Define spousal support (alimony). In the event of a divorce, will either spouse be required to pay alimony?
- Define what happens to real estate. In the event of a divorce, does a shared home need to be sold? How will the proceeds be divided?
- Define who will pay taxes. In the case of a divorce, who will pay any taxes owed?
- Define how long the prenuptial lasts. If the document contains a “sunset clause”, this clause specifies a date on which the agreement expires. Without this clause, the prenuptial agreement lasts indefinitely.
The agreement should NOT include any of the following, which will not be upheld by a California court in the event of a divorce:
- Any terms about child custody or child support
- Any terms about spousal maintenance requirements if the signing spouse opted out of retaining independent legal counsel.
- Any terms that require a spouse to commit illegal acts
- Any terms that are unfair, unjust, exploitative, or deceptive
- Any terms requiring that one spouse change their appearance (such as losing weight)
- Any terms regarding the relationship
Step 5: Finalize and sign your prenuptial agreement.
Under California law, the final form of the document must be in the hands of each party at least 7 days prior to signing the document. You must sign your premarital agreement in the presence of a notary in order to be valid. Most attorney offices provide notary services.
Be sure that both parties retain a copy of the document and place it in a safe place where it will not be lost such as a safe or safety deposit box. Your attorney should also keep the document in your file, especially if you also have an estate planning file with them.
If you have any questions about creating a prenuptial agreement or if you’re ready to get started, feel free to contact our office.
Law Offices of Daniel A. Hunt
The Law Offices of Daniel A. Hunt is a California law firm specializing in Estate Planning; Trust Administration & Litigation; Probate; and Conservatorships. We've helped over 10,000 clients find peace of mind. We serve clients throughout the greater Sacramento region and the state of California.