What Are the Key Elements of a Strong Premarital Agreement?

What Is a Premarital Agreement and What Makes for a Good One?

A prenuptial agreement, or premarital agreement, is a contract you sign before you get married. The purpose of the document is to list existing assets and debts and define the property rights each person has to those assets during the marriage and afterward, should the marriage end. For example, a prenuptial agreement may spell out a property division agreement relevant to real estate, cash, and other assets each person brings into the marriage should the individuals get divorced.

With divorce rates at 40 percent or higher in the United States—and typically much higher for second or third marriages—it’s not surprising that individuals are interested in the functionality of premarital agreements. When structured correctly, these types of agreements can provide protection for both parties and potentially safeguard generational assets against major losses in a divorce.

What Are the Legal Requirements for a Premarital Agreement?

In California, there are some specific legal processes you must follow to ensure your premarital agreement is valid. First, you must abide by a seven-day waiting period. This is a required seven-day period between the time both parties receive the document and when they sign it. The purpose of the waiting period is to give both people time to review and understand what they are signing and carefully consider the implications the agreement might have on their futures.

The seven-day waiting period only starts when the final version of the premarital agreement is presented to both parties. This means that the waiting period occurs after any negotiation and subsequent changes to clauses within the document.

In some cases, you can create a cooperative premarital agreement—one that you work on together with the help of a single lawyer. However, if you plan to include a waiver of spousal support in the premarital agreement, both sides have to be represented independently by their own attorneys for the agreement to be considered valid.

General legal requirements that apply to contracts also apply to these agreements. Each person has to sign the document willingly and be of sound mind when doing so. If someone can show they were forced physically to sign an agreement, for instance, or were truly not able to understand what they were signing, the agreement may not be valid.

What Should You Include in a Premarital Agreement?

While each premarital agreement is unique to the situation and couple at hand, there are some common provisions typically included in these documents.

Disclosure of Assets and Debts

In creating a premarital agreement, you lay all the financial cards on the table, so to speak. Each person should include all of their assets and debts. This allows both parties to have a clear big
picture of each other’s financial situations and negotiate a prenup in good faith.

Listing all assets is especially important because declaring the assets within the agreement helps you protect them. If you don’t list an asset in your premarital agreement when protecting it from potential future property division, it may become part of the assets that are split if the marriage ends in divorce.

Property Division Provisions

After listing all the property and debts, you can agree on how property might be divided should your marriage end. This does not have to be equitable. Often, the purpose of a prenuptial agreement is to protect generational wealth or the product of someone’s work through the years from being split equitably with a spouse who did not contribute to the building of that wealth.

Terms for Potential Spousal Support

You can agree on spousal support paid from one person to another should the marriage end in divorce. This can reduce the risks of a fight over spousal support later and the potential impact of the family law courts in such a decision. You can also waive spousal support entirely.

Can a Prenup Include Child Support or Custody Agreements?

Typically, no. These are matters that are the purview of the family law courts during the divorce process. However, you might be able to include language in a prenup that protects assets from being claimed or inherited by step-children from a previous marriage.

Other things you can’t generally include in a premarital agreement include anything that conflicts with the laws of the United States or California, personal details and preferences (such as who will take out the garbage or how much time you’ll spend with the inlaws), or anything that can be seen as encouraging a divorce.

Are Premarital Agreements Enforceable?

Yes, premarital agreements are enforceable as long as they comply with federal and state laws. However, they can be contested at a later date, and judges may strike down certain clauses or the entire agreement if there are any legality issues with it.

Get Help From a Family Law Attorney

By working with an experienced family law team, you can enhance the strength of your premarital agreement and the likelihood that it will be upheld if it becomes applicable in the future. To make an appointment to discuss your premarital agreement needs, reach out to Hepner & Pagan, LLP, by calling 408-688-9153.