Premarital agreements are another name for prenuptial agreements. An engaged couple generally enters into this agreement before marriage and the agreement takes effect when they get married. By effectively rewriting California community property statutes as it applies to them, parties can take control of their finances and determine, in advance, the distribution of their property in the case of dissolution or legal separation. Premarital agreements are not just a tool to protect a wealthy spouse.
Protecting Assets Acquired During Marriage
One purpose of a premarital agreement is to protect assets acquired during marriage. In California, for example, salary and wages acquired from the date of marriage to the date of separation are considered community property. With a properly drafted prenup, parties can agree that all earnings shall be separate property.
How Premarital Agreements Affect Ownership of a Home
If one party owns a house prior to marriage, the house is that person’s separate property. If the couple lives there after they get married and uses community funds (earnings during marriage) to make mortgage payments, the community earns an interest in the property. However, parties can agree in writing that the community will not earn such an interest from its contribution to the mortgage.
Limitations to Premarital Agreements
There are two limitations on what can be included in a premarital agreement in California.
1. Child Support or Child Custody. Premarital agreements cannot address child support, child custody, or child visitation rights. If an agreement even attempts to address any of these issues, the entire prenup is voided.
2. Violations of Public Policy. Premarital agreements cannot violate public policy. The court has discretion over what violates public policy, and this can change over time. In the past, a waiver of spousal support violated public policy. Currently, courts have found anything that promotes the dissolution of marriage to be against public policy. However, this generally does not permeate the entire agreement, and the court retains the right to extract that paragraph alone.
Current Requirements for a Valid Premarital Agreement
For a prenup to be valid, it must:  be in writing,  contain full disclosure of all assets and liabilities, and  be signed voluntarily and knowingly. The third requirement means that the agreement must not be unconscionable, such that the agreement must be in a language that the signing spouse is proficient, there must be seven days between when the signing spouse receives a final and complete copy of the agreement and when the agreement is signed, and the signing spouse should have independent counsel.
For more information on prenups, or to discuss drafting a prenup before your marriage, contat the expert Los Angeles family lawyers at Walzer Melcher LLP today.