If you can’t decide whether or not to make a prenuptial agreement, you first need to determine what it can and can’t do for you.
A prenuptial agreement is a legal document executed by a couple before they are married that details how their assets and liabilities will be divided in the event of a divorce. The agreement must be in writing, signed by both parties before a notary public, and contain fair terms based on full disclosure of the assets and liabilities to be divided.
A prenup may help if you have one or more of the following goals:
- Keeping finances separate – California is a community property state. All assets and debts accumulated during the marriage will be divided equally in the event of a divorce. If you want to avoid having some of your individual accumulations during marriage (i.e. inheritance, gift) divided up by a court, you can do so with a prenuptial agreement.
- Debts – Some people bring debts, as well as assets, to a marriage. Without a prenup, creditors can sometimes turn to community property to satisfy the debts of one spouse.
- Children – A prenup helps if there are children from a previous relationship and you want to make sure they inherit their share of your property.
- Family property – If you have property that you want to make sure stays in your family, such as an heirloom, make provisions in your prenup agreement.
- Community property – You and your spouse can specify how your property will be divided if you divorce.
In addition to those stated above, there are many other uses for a prenup, depending on your circumstances. However, there are some things you just cannot do. State laws differ as to what matters are considered off-limits, including anything illegal.