Engaged couples in California can avoid some dispute, if they ever divorce, by entering prenuptial agreements. While negotiating these agreements is not the most romantic part of an engagement, proper planning can help couples learn about their finances and lower the chances of conflict.
Disclosing assets and liabilities is important. Couples should gather records on stocks and bonds, annuities, bank statements, retirement accounts, tax returns for a few years, recent pay stubs and appraisals of costly property such as a house, car or boat. This information will help with the preparation of a schedule of assets that should be appended to the prenuptial agreement.
A schedule of liabilities should also be attached to the agreement. Accordingly, spouses should locate documents on credit card debt, mortgage, lines of home equity and debt such as personal, student and auto loans.
These documents should be compiled so that they can be shared with the other future spouse and attorneys. Information containing birth dates, social security numbers or account numbers should not be sent in an unencrypted e-mail to the future spouse or an attorney. This confidential information should be sent through encrypted software or on a password-protected flash drive.
The couple should determine whether the agreement should cover divorce, separate support or inheritance matters. Property should be identified as separate or community property.
A spouse may consider paying money or assets after a specific time elapses if that spouse has significantly greater property or assets. The spouse with less property or assets may consider seeking money or property after the marriage lasts a specific period.
Alimony is another consideration. A spouse who does not work or become a stay-at-home parent may want spousal support. Paying alimony is tax deductible. However, a prenuptial agreement may not contain a waiver of child support payments.
A spouse should also find out whether a family member or friend named them as a beneficiary for inheritance of money, real estate or stocks. An attorney can help determine whether this should be disclosed.
The prenup should be signed at least 30 days before the wedding to protect its validity and cause less disruption to wedding plans. Each spouse should also have their own attorney advise them on a prenup to help protect their rights.
Source: Mediate.com, "10 things to consider before signing a prenuptial agreement," By Debbie Smith, Sept. 14, 2017