California Family Attorneys Giving You the Representation You Need to Protect Inheritances with Premarital Agreements

No one gets married expecting to get divorced. Everyone who says “I do” hopes it lasts forever. Fortunately for many couples, the divorce rate has been declining steadily in California. In 2024, it reached a decade low of 8.9%. Just because we don’t want our marriages to end doesn’t mean we shouldn’t plan for things if they do, though. Many people see prenuptial agreements as a sign of distrust in their future spouse. Others may think they demonstrate a lack of confidence in the ability of the marriage to last a long time.

Prenuptial agreements are essentially marriage insurance. They help plan for an event we hope doesn’t happen. No one buys car insurance wanting to get in an accident. Having that insurance helps put a plan in place in case it does happen. This is why prenuptial agreements can be so valuable for marriages. This is especially true if one spouse anticipates receiving an inheritance during the marriage. Depending on how the inheritance is saved or spent, it could become what is called community property. If this happens, you could lose a portion of what’s rightfully yours.

What is Community Property in California?

California is what is called a Community Property state. This means, in a marriage, money and property acquired by the couple is legally considered to belong to both of them equally. In the event of a divorce, this means the money and property must be split equally. Things considered community property include but are not limited to:

• Money
• Property
• Vehicles
• Business Assets
• Stocks and Investments
• Retirement Plans

In the event of a divorce, a couple is expected to split their assets evenly. If they cannot come to an agreement themselves, they must appear before a judge. The judge will then determine how assets are divided. A couple may not always agree with a judge’s decisions on asset division. One spouse may feel the judge sided with the other and gave them preferential treatment. Items of sentimental value may go to the other spouse. This is why it’s always preferable to try and settle asset distribution amicably instead of appearing before a judge.

Usually, inheritances are not considered community property. The court generally recognizes they are left to one spouse by a close friend or family member who intends it only for them. In the event of a divorce, an inheritance can be exempt from community property distribution. However, this is not always the case. There are circumstances under which an inheritance can be considered community property. The most common is if a partner receiving a monetary inheritance deposits it into a joint banking account. This is called comingling. In the event of comingling, an inheritance can be considered community property. This is why it can be vital to have a prenuptial agreement in place before marriage.

What is a Prenuptial Agreement in California?

A prenuptial agreement is also called a premarital agreement. They are also known as “what’s yours is yours and what’s mine is mine” agreements. They allow couples to stipulate how certain assets will be divided in the event of a divorce. Prenuptial agreements override community property distribution laws. This is because they are contracts signed before marriage establishing how the couple wants to divide assets if they get divorced. A couple can include any stipulations in a prenuptial agreement as long as both spouses agree.

If you are anticipating receiving an inheritance during your marriage, including it in your prenuptial agreement can be vital to protecting it in the event of a divorce. Many married couples only have joint banking accounts. On average, only about ¼ of married couples keep separate accounts. This means an inheritance will most likely be deposited in a joint account. If this happens, your spouse could argue it is community property in the event of a divorce.

Your spouse could also argue the inheritance is community property if you used it to make a large purchase together, including a home or vehicle(s). This could be used as evidence you intended to spend the money as a couple. Any purchases made as a couple with your inheritance could also be considered community property. This is why it can be vital to sign a prenuptial agreement prior to marriage.

What Should I Do if I’m Anticipating an Inheritance During my Marriage in California?

It’s important to understand prenuptial agreements do not mean you expect to get divorced. They also do not mean you distrust your spouse or think they would try to treat you unfairly in the event of a divorce. Prenuptial agreements are simply planning for a worst-case scenario. They are no different from car insurance or planning for a natural disaster. A prenuptial agreement allows you to stipulate what property and assets you want to keep in the event of a divorce. If you anticipate receiving an inheritance, you can include it in the prenuptial agreement. This could even allow you to spend it jointly with your spouse with the understanding it is not becoming community property.

Prenuptial agreements can seem upsetting but they don’t have to be. Marriage is a contract. Prenuptial agreements can just be another part of that contract. If you’re getting married and anticipate receiving an inheritance during the marriage, don’t hesitate to contact Hepner & Pagan, LLP, located at 116 E Campbell Ave, Suite 1, Campbell, CA 95008, three miles Southwest of Willow Street Frank Bramhall Park and one mile Southeast of Campbell Community Center.

Our attorneys are well versed in divorce and family law. We understand how uneasy it can feel to sign a prenuptial agreement. We can help walk you through the process of what exactly a premarital agreement is and does. After a consultation with our attorneys, a prenuptial agreement will seem like just another part of getting married. It’s no different than obtaining a marriage license or hiring a caterer.

Planning ahead doesn’t mean expecting the worst. It simply means being prepared. If you or a loved one are planning on getting married and expect to receive an inheritance, call Hepner & Pagan, LLP now at 408-688-9153 or email us for a consultation.