When planning the future, many couples in California consider legal contracts to protect their financial assets in case of divorce or separation. Gone are the days when prenups or postnups were seen as relevant only in the case of divorce. While there may be some truth, both options provide security and peace of mind.
You may even wonder whether a postnup is as good as a prenup. While both serve a similar purpose and are sometimes used interchangeably, there are some key differences between a prenup vs postnup California. Both are legal binding documents that aim to help couples clear up financial matters.
Keep reading as we explore the exact ways in which prenuptial agreements differ from postnuptial agreements in California.
Prenup vs Postnup California
In California, couples may consider two types of contracts: prenuptial (prenup) and postnuptial (postnup) agreements. Both agreement types are valuable in helping spouses or future spouses secure their financial future and protect their assets.
The main difference between a prenuptial contract and a postnuptial contract is the timing of when it is drafted and signed. For instance, a prenup is a legal contract couples sign before they get married, and is effective immediately upon marriage.
In contrast, a postnup is an agreement signed by an already married couple. Regardless of which one a couple gets, the goal is the same: protect the interests of both parties during and in the case of a marriage breakdown.
Both prenups and postnups are legally binding documents, which is why you should ensure you have the best California prenup lawyers drafting yours. Generally, both postnups and prenups may cover various financial matters, including:
- Property division
- Spousal support
- Debts
- Premarital assets
- Investments
- Inheritance
- Retirement and 401(k) accounts
- Legal issues in case of death
What Is a Prenup?
California defines a prenuptial agreement as a written legal contract signed before marriage outlining how property, debts, and other financial matters will be settled in case of divorce or death.
A prenuptial agreement can also contain provisions about how financial matters will be handled even during the marriage. In California, prenups follow the Universal Prenuptial Agreement Act (UPAA) guidelines.
Common reasons to get a prenup include the following:
- Protecting individual assets
- Addressing potential spousal support
- Safeguarding family inheritance
What Is a Postnup?
A postnuptial agreement is a contract that two spouses enter into after marriage. California’s Family Code governs postnuptial agreements with sections 1500-1502.
Section 1500 states that a premarital or other marital property agreement (e.g., postnup) can change spouses’ property rights. Section 1502 states that all marital contracts may be recorded in the office of the recorder of each county where the property affected by the contract is situated.
The most common reasons couples seek to get a postnup may be due to:
- Financial changes after marriage
- Protecting business interests
- Clarifying financial obligations
- The couple wanted to enter into a prenup but did not due to timing or other reasons
Key Differences Between Prenup and Postnup
While both types of marriage agreements are legally binding documents, they have some critical differences between them, including:
- Timing
- Psychological Factors
- Coverage
- Legal Standards and Enforceability
Timing
As we have mentioned previously, time is the most significant difference between the agreements. Prenups are signed by engaged couples and expect to get married soon. On the other hand, postnups are written and signed after you are already married and can happen days, months, and even years after the marriage.
Psychological Factors
Prenups may be viewed as a proactive measure by couples looking to get married and protect themselves and both parties’ assets in the event of a divorce. In contrast, postnups most often might arise from financial or personal changes after marriage.
Coverage
If you and your spouse are planning to get married, you may input provisions about potential future assets if you want to keep them as separate property.
Postnups will take into consideration the property earned before and during the marriage. In this case, the property already exists. You just separate them to avoid California’s community property laws.
Legal Standards and Enforceability
Prenups are generally easier to enforce because there are clear legal guidelines in the UPAA according to which couples draft them. Your prenup will be valid if it meets California’s Uniform Premarital Agreement Act at the moment of signing. If everything is lawful, it becomes valid.
Postnups, on the other hand, can be more challenging, especially if one party feels they were pressured. Postnups can face more scrutiny in court because courts assume there may be more coercion after marriage. A postnup becomes valid only after the court’s approval. This is where your attorney can advise you.
When to Consider a Prenup
If you both want to protect individual assets or define property rights before getting married, a prenup is the right choice. Prenuptial agreements are a great way to set financial expectations for couples entering a marriage with significant wealth or assets.
When to Consider a Postnup
Suppose you and your spouse are already married but are facing significant life changes. In that case, postnups can address significant life changes including starting a business, receiving an inheritance, or experiencing financial difficulties.
Some couples utilize postnups as a way to rebuild trust after issues like infidelity or financial mismanagement. Postnups allow them to set clear financial expectations to help them through such challenging times.
Lastly, postnups are also suitable for couples who are already married but foresee potential divorce. They may use a postnup to minimize legal battles and simplify the divorce proceedings.
Conclusion
The most significant difference between a prenup vs postnup California is that one is signed before a marriage while the other after. If you are a couple yet to be married, you and your spouse should get a prenuptial agreement and if you are already married but are facing significant life changes, postnuptial agreements are an excellent way to address those.