Circumstances change before and during a couple’s marriage, and if significant, spouses may want to address them officially. In the event of a divorce, married couples may seek a postnuptial agreement to safeguard themselves. But is a postnuptial agreement legal in California?
In this article, we will address this question in detail. You can learn whether postnuptial agreements are valid in California and the legal requirements for getting such a contract.
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Is a Postnuptial Agreement Legal in California?
In California, postnuptial agreements are legal and recognized but must meet strict requirements. A postnuptial agreement is a contract between two already married parties.
You and your spouse may write and sign a postnup any time after you are married; it does not matter if it’s weeks, months, or years after the fact. Like a prenup, a postnup allows you and your spouse to address and specify how your assets, property, and debts will be divided during a potential divorce.
When it comes to postnuptial agreements, the most common reasons for them are the following:
- Significant changes in finances for one or both spouses after marriage
- An attempt to protect business interests
- Clarifying the financial obligations of both spouses.
As a postnuptial agreement deals with sensitive topics like asset division and spousal rights, both parties may need to contact a California postnup attorney. With the help of an experienced lawyer, you and your spouse may ensure your rights are protected.
California family code provisions that apply to postnups
While prenups are covered under the UPPA, postnuptial agreements are governed by California’s Family Code sections 1500-1502. Both sections provide clear instructions for marital agreements and protect spousal rights.
Section 1500 of the Family Code states spousal property rights, as per statute, are subject to alteration by a premarital or other marital property agreement (postnup). According to section 1502, spouses may record marital contracts in the office of the recorder of each county where the property affected by the contract is located. This is optional and mainly serves as notice to third parties.
Another necessary California Family Code provision that applies to postnups is 721. Section 721 requires both spouses to treat one another with transparency and fairness in all contracts, including marriage agreements.
The key difference between a postnup and a prenup
The key factor that differentiates postnuptial agreements from prenups is timing. As their names suggest, prenups are contracts signed prior to getting married, while postnups are after you are already married.
Beyond the timing, the purpose of both marital agreements is the same: to determine property and asset division during a divorce. Postnuptial agreements allow both parties to make decisions after the marriage and address all considerations without feeling pressured.
It’s important to note you and your spouse have a fiduciary duty to each other, which imposes a higher standard of fairness and disclosure. Family Code 721(b) states spouses are subject to the state’s general rules that govern fiduciary relationships, which control the actions of individuals in confidential relations with each other.
Marriage is a “confidential relationship,” meaning it imposes fair dealing and the duty of the highest good faith on both of you. Neither you nor your spouse should take any unfair advantage of the other to ensure the postnup’s validity.
California Postnuptial Agreement Requirements
Postnups are written and executed under the guidance of a combination of general contract rules, court decisions, and marriage laws, such as the ones previously mentioned. This gives clear legal requirements for a valid postnuptial agreement, including the following:
Voluntary agreement
Both spouses must enter the agreement freely and without coercion. The postnup cannot be signed under threats, deception, intimidation, or force or will be deemed unenforceable
Full financial disclosure
A valid postnup requires complete transparency about assets, debts, and income. Both spouses must fully understand the other’s financial situation before signing a postnuptial agreement.
Fair and equitable terms
If the court perceives your postnuptial agreement as unfair or one-sided, it may reject it altogether. If this happens, asset division will be done according to California’s community property guidelines.
Legal representation
Both parties should seek independent legal counsel to ensure informed consent and understanding of the terms and consequences of the postnup.
Written and signed document
The postnuptial agreement must be written and signed by both parties as ral agreements are not enforceable.
Common Uses for Postnuptial Agreements in California
Addressing changes in financial circumstances
Financial circumstances may drastically change during your marriage. For example, one party:
- May receive an inheritance or large financial windfall – A postnuptial agreement may ensure inheritance received remains in the family in the event of divorce.
- Business ownership or new partnerships – Apostnup may help protect one party’s business and clear up any potential ownership doubts in the event of a divorce. This also addresses new business entities or partnerships.
Debt management
As with property, both spouses have separate and shared debts. With a postnuptial agreement, you may clarify your responsibility for marital and individual debts and decide who will pay off the debts if you divorce.
If one of you has a credit card solely in their name, you can document in writing that the associated debt will remain their obligation. On the other hand, if you have a mortgage, you may also include provisions on how it will be handled.
Pros and Cons of Postnuptial Agreements
There are many benefits to getting a postnup and some potential disadvantages.
Pros
- Allows flexibility to address financial changes after marriage
- May strengthen communication about financial matters
- May offer protection for both parties in case of divorce
- Possibly held to the same fairness standards as prenuptial agreements.
Cons
- Could cause tension in the relationship
- Possible risk of unenforceability if not correctly executed
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Conclusion
Is a postnuptial agreement legal in California? Yes, as long as properly executed. A postnup allows both parties to address financial changes after the marriage and avoid any potential disputes in the event of a divorce.
To ensure your rights are protected and your contract is valid, contact one of our legal experts for guidance!