Estate planning is not usually the first thing that comes to mind for those
about to enter into a marriage, but planning out financial matters ahead
of time can have a positive impact on a marriage. Pre and post marital
agreements can clearly define which assets are separate property and which
are "community property.” There are only nine states that recognize
marital “community property” as a legal category, and California
is among them.
It is also important to understand the difference between "jointly
owning" a property and "owning a half interest" in a property.
Each spouse owns 50 percent of all community property, but each owns 100
percent of their separate property. Assets acquired after a prenuptial
agreement is signed are dealt with differently. Income is community property,
but certain gifts and inheritances are given a separate property status.
No one is required to leave their half of community property or separate
property to the other spouse in a will. Premarital agreements speed up
and simplify dealings with the IRS after the death or divorce of one’s
spouse. They can also clarify who owns what, and prevent delays in distribution
of trust property.
Another option many married people seldom think about is a post nuptial
agreement. The difference between a pre and post nuptial agreement is
not in either purpose or structure, but rather when the agreement is signed.
Put simply, pre-nuptials are agreed to before marriage, while post-nuptials
are signed after marriage. Either way, it is typically required that they
be in writing, be signed by both parties, and be duly notarized. Full
disclosure of all assets by both parties is a major requirement affecting
the validity of any pre or post-nuptials. Any attempt to threaten, force,
or deceive the other spouse into signing such an agreement would also void it.
Especially in cases of second marriages and "blended" families,
it is common to get a prenuptial agreement or postnuptial agreement to
sort out how assets will be disposed of. The desire to ensure children
from another marriage are included is often a major concern. For assistance
with pre and post nuptial agreements and other aspects of estate planning
in or around Orange County, California, contact Mortensen and Reinheimer,
PC today at
fill out the online request form to learn more or schedule a consultation.