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Post-Nuptial Agreements

Often referred to as a “post-nup”, a post-nuptial agreement is a written agreement entered into between two parties after they have married. The most common purpose of a post-nuptial agreement is similar to the purpose of a pre-nuptial agreement, to assist parties work through potential problems after marriage before they occur. A post-nuptial agreement offers protection to both parties by allowing the parties to discuss the division of assets and obligations without leaving the division up to guidelines pursuant to California law.

The are many reasons couples seek post-nuptial agreements immediately after or during the pendency of their marriage. One reason is that California is a community property state, meaning all property, real or personal, acquired by a married person during the marriage while living in the state of California is subject to equal division upon divorce. If there is certain property or assets that were purchased by one party to the marriage, during the marriage, and that person wishes to have that asset considered separate from the community property in the event of divorce, that specific item or items could be included in a post-nuptial agreement. Similarly, if one party to the marriage accrues substantial debt during the marriage, a post-nuptial agreement can contain language that excludes that debt from being considered communal to protect the other party that did not incur the debt.

Commonly, clients prepare a post-nuptial agreement to coincide with their Estate Plan. Transmuting property from the separate property of one spouse to community property can save married couples and domestic partners significant money in potential taxes. If a spouse dies before a property is sold, and the property has not been transmuted to ‘community (joint), then the surviving spouse may face thousands of dollars in capital gains. Had the property been community property, there would have been a serious capital gain advantage that can save the surviving spouse.

The terms and details contained in a post-nuptial agreement are often a collaboration between spouses and either a marital mediator or attorneys. Once the parties have finalized the desired terms of the post-nuptial agreement, the post-nuptial agreement is reviewed both parties’ respective attorney. When the post-nuptial agreement is the product of the collaboration of the two parties, who care deeply for one another at that point in time, the result of the agreement is far more likely to be fair and just as to both parties.

Although post-nuptial agreements can be written to designate specific assets and liabilities to a particular person, they cannot be written to void the presence of financial responsibilities such as agreeing to not pay child support. A post-nuptial agreement must be fair and should be drafted based on each party providing a full financial disclosure to the other party. Once the post-nuptial agreement is executed by the parties and their attorneys, that agreement is binding, however, California courts retain the authority to throw out a post-nuptial agreement that they deem to be unfair, or if any evidence is presented that either party was taken advantage of, or did not have independent counsel review the agreement prior to execution. For these reasons, it is imperative to have a family law attorney, review and/or certify your agreement. Should you have any questions or need assistance drafting a marital agreement, the Law Office of Rebecca M. Medina is here to help.

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