|
FAQ |
|
|
|
|
There are several reasons why clients enter into prenuptial
agreements. The following is a summary of the most frequently
cited reasons why our clients typically enter into prenuptial
agreements:
● Preserving Inheritances: If you have children from a prior marriage
or grandchildren who you desire to inherit most or all of your assets, a prenuptial
agreement is an essential tool to assure that your intentions will be honored.
If you die without a prenuptial agreement or get divorced, your children might
have to share a significant portion of your property with your new spouse.
● Asset Preservation and Protection: If one or both
parties come to the marriage with significant assets, income
streams from their current jobs or business interests, one or
both of the parties may wish to clarify what will happen to those
assets or interests in the event of separation, divorce or death.
A prenuptial agreement may specify what will happen to your property,
either community or separate. For example, real estate, antiques,
jewelry, stock options, and accident settlements may all be the
subject of a prenuptial agreement.
● Dealing with Debt: A prenuptial agreement can and
should address how all of your and your fiancee’s debts
will be handled. This includes debts incurred before you are
married and those incurred after you are married. Although assets
or debts acquired prior to marriage are "separate property" as
a general rule, if the parties use their earnings during marriage
to pay the mortgage on the separate property home of one of the
parties, under the principles of community property law, the
community acquires an interest in the home which will need to
be accounted for upon divorce.
● Preserving And Protecting The Interests in Family
and Other Closely-Held Businesses: There are many different types
of assets that people seek to protect through the use of a prenuptial
agreement. For example, people who have ownership interests in
businesses may wish to ensure that in the event of divorce, that
they will not have their interests interrupted. A divorce can
strip a company of assets when one party claims a stake in a
spouse's family business or a closely held company. Even if such
a claim is unsuccessful, hotly contested litigation can expose
your business to incredible intrusion including burdensome discovery.
A prenuptial agreement can help protect you and your fellow stakeholders
in the business against such risks. If you die without a prenuptial
agreement or get divorced, your new spouse might share in the
family business which could dramatically change the family interaction
of the business and cause a serious problems.
● Limiting or Waiving Alimony (Spousal Support): Some parties, especially
those who have already been through a divorce, are nervous about the possibility
of having to pay considerable future spousal support payments. A prenuptial
agreement may limit or waive future spousal support obligation by the parties.
● Preserving and Protecting Separate Property Acquired
Before Marriage: A prenuptial agreement may insure that a spouse's
property owned before marriage remains separate property after
marriage. In other words, the property will remain separate regardless
of any new developments that might otherwise make the property
community property. In particular, when one spouse owns a business
he or she may wish to avoid the difficulties involved in apportioning
the business in the event of dissolution. A prenuptial agreement
can be used to assure that a business will remain entirely the
separate property of the owning spouse, regardless of any actions
taken after marriage.
● Preventing creation of community property: California
is a community property state, meaning all assets acquired during
the marriage, including increased value of assets owned before
the marriage, may be included in the “marital pot.” A
prenuptial agreement may prevent the creation of community property
during the marriage. The party’s may agree that each of
their respective earnings during marriage and before separation,
and any items acquired by the party with those earnings, will
be his or her separate property. For example, should a spouse
get a loan during marriage to fund a separate property business,
under current law, the loan proceeds it will be community property.
This means that the business will have both separate and community
property interests unless a prenuptial agreement is entered into
by the parties that provides otherwise. Prenuptial agreements
may also be used to clarify whether a contemplated gift or bequest,
either before or after marriage has any community property component.
For example, a prenuptial agreement can specify whether a gift
by one spouse's parents of a down payment on a house is a gift
to the couple (i.e., community property) or just to their child
(i.e., separate property).
● Disposition Of Maritial Residence: A prenuptial agreement may address
who will be entitled to keep possession of the family residence in the event
of divorce or death.
● Keeping a Cherished Pet: While child support and custody
issues may not be included in prenuptial agreements under California
law, who gets to keep a cherished pet is absolutely fair game.
In fact, prenups are used to steer a more rational course for
those who, instead of children, have pets dear to their hearts.
If you want to make sure that Fido the Dog or Pete the Parrot
stays with you, make sure to let our lawyers know.
© 2006-2009 L.A Prenup Lawyer L.L.P,
All Rights Reserved. |
