Heath-Newton, LLP Educates on Prenuptial Agreements

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Heath Newton gives tips on what needs to be included in a prenuptial agreement

More people are searching the internet for sample premarital agreements these days. A prenuptial agreement is, by definition, a highly customized contract that is only useful to the couple for whom it was created. For that reason, it’s impossible to provide a prenuptial agreement sample that would do any good. So rather than provide a premarital agreement sample that might steer people in the wrong direction, Heath-Newton, LLP educates its clients by listing the basic requirements of a valid prenuptial agreement in California.

The first issue is what to do with assets acquired before marriage. California is a community property state, which means that income earned during marriage is community property and gets split evenly between the parties if there is ever a divorce. Assets acquired before marriage are separate property and remain separate so long as they’re not commingled. The challenge here is that assets are very easily commingled, and most couples end up doing so unintentionally. The vast majority of California prenups, therefore, address what happens to assets acquired before marriage, and close off the loopholes in California community property law. Whatever works best for the couple is enforceable as long as it is clearly spelled out.

The second issue is income earned during marriage. As mentioned, income earned during marriage is considered community property in California. That means that whatever is earned during marriage is owned one half by each spouse, no matter who is working and how much they earn. This rule simply does not fit with everyone’s philosophy of marriage, and those people choose to modify these terms in their premarital agreement.

The third issue most couples want to address with a prenuptial agreement is spousal support which is often called “alimony” in other states. Essentially, after separation in California, in most cases, the higher earning spouse is going to end up paying the lower earning spouse some amount of money every month in support. The problem is that the amount of money, and the duration of the payments are both up in the air, and left largely to judicial discretion. This makes it hard to plan for the future. Many couples want to create certainty around this issue, so they modify the terms in various ways. For instance, couples might limit the maximum support amount, limit the duration, or create a lump sum payment in lieu of support. Again, most modifications are acceptable to the courts so long as they’re fair, clearly drafted, and everyone knows what they’re getting into.

A prenuptial agreement can include as many terms as a couple can imagine – these are simply the most common. With those out of the way, let’s turn to enforcement basics. These must be handled for a binding and valid agreement in California.

Each party must provide full and fair disclosure of assets and debts. A fair deal is not made if it is not known what is being dealt. Asset disclosures are a basic, fundamental element of a binding prenuptial agreement. The more detailed the better.

Both parties must be represented by Independent Counsel. California law is quite strict on this point. Each party must fully understand what they’re signing, and the only way to ensure this is for everyone to have an independent lawyer. An agreement cannot be signed if there is no representation, but it probably won’t be enforceable in court.

The seven-day rule. Once the final draft of an agreement has been approved by both parties, there must be seven days of waiting before signing it. There is some recent case law that contradicts this long-standing rule, but it is quite limited. To be on the safe side, wait seven days before signing.

Don’t bring up the idea a prenuptial agreement two weeks before a wedding. prenuptial agreements must be entered into free of coercion and duress. Waiting until after the caterer has been hired and the cake is being baked looks a bit like coercion. The earlier one is started on this process the better.

For a prenuptial agreement sample, or any questions about the process, feel free to give Heath-Newton, LLP a call at (415) 398-1290. They are all experienced divorce attorneys, and love this area of the law.

About the company:
At Heath-Newton LLP, they specialize in family law, asset protection and estate planning services. Based in San Francisco, their boutique firm has earned a reputation for managing their clients’ cases well, reaching successful resolutions — and minimizing costs and disruption to their clients’ lives.

They have handled a long list of family-law cases, including a broad range of issues facing new families (such as domestic partnerships, premarital agreements, adoption and more), as well as divorce, asset division, child custody and child and spouse support. They also have extensive experience in estate planning, wills, probate, mediation, living wills and trusts.

Collectively, their attorneys have thousands of hours of experience, allowing them to be both efficient and effective. They are guided by a practical approach that emphasizes avoiding litigation to minimize costs and disruption; however, they can and will be fierce litigators when all other strategies have proven ineffective. For more information visit their website at http://www.heathnewton.com. To discuss a situation with one of their attorneys, please call them at (415) 398-1290.

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Charlotte Jones
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