Pre- and Post-Marital Agreements: Key Considerations
With Valentine's Day around the corner, many couples may be thinking of popping the big question. The moment you say "yes" to the big question, you may immediately start planning for your wedding, from food to invitations to center pieces; normally there is a list of tasks that need to be done before your moment at the altar. With all of this planning, you might not realize that among those tasks is evaluating whether or not to prepare a pre-marital agreement.
Typical Scenarios
At Mortensen & Reinheimer, PC, we have consulted with and helped many couples throughout the years, with varied scenarios that created the need for a pre-marital agreement. These agreements help protect each party and streamline the process for their families, in the event of a divorce or after they have passed.
While there are various pros and cons, the most common two reasons to having such agreements are for a second marriage or when one partner has a stronger economic standing. A pre-marital agreement can be important for a second marriage, and especially so when either party has children from a previous marriage. With financial issues being a major cause of divorce, couples who establish pre-marital agreements are taking a positive step toward preventing future financial misunderstandings. Any kind of marital agreement will help ensure that your assets are taken care of in the event that something unforeseen happens to you.
Community vs. Separate Property
Pre-marital and post-marital agreements help clearly define which assets are "separate property" and/or "community property," which are important legal concepts. California is a community property state, which means that each spouse or partner owns one-half of the community property and each spouse or partner is responsible for one-half of the debt. Community property and community debts are usually divided equally. Therefore, it is paramount that you understand the differences between separate and community property and what are the default characterizations.
- Community property refers to any income or assets that are acquired by either spouse during marriage. Each spouse owns 50 percent of all community property.
- Separate property, generally speaking, refers to everything else. For example, all property you own and acquire before you get married is separate property. All gifts to you are separate property. Each spouse also solely owns 100 percent of their separate property.
Ramifications of Post-Marital Agreements
Many couples decide to enact a post-marital agreement. There is no structural difference between pre-marital and post-marital agreements, other than the timing of when the agreement was signed (i.e., before or after marriage).
Regardless of when you sign an agreement, it is typically required to be in writing, signed by both parties, and be duly notarized. The agreement must have full disclosure of all assets, as it can affect the validity of the agreement. Any attempt to force the other spouse to sign the agreement will also void it.
Practicality vs. Emotions
They might not be romantic to bring up, but in situations when a pre- or post-marital agreement is advisable, experienced legal counsel can prepare an effective agreement. At Mortensen & Reinheimer, PC, we can fully assist you with a pre-marital or a post-marital agreement tailored to your individual objectives and needs.
About the author:
Weily Yang is an attorney at Mortensen & Reinheimer, PC, an estate planning and probate firm in Irvine. Weily is a zealous advocate for individuals with special needs. His primary focus is special needs trusts and probate conservatorships together with estate planning, trust administration, and probate. He can be reached at weily@ocestateplanning.net.