4 Things To Consider Before Signing A Prenuptial Agreement

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyPrenuptial agreement is essentially a contract signed by two individuals who are about to enter into a marriage. The purpose of the prenuptial agreement is to protect either individual’s assets in case the marriage fails and a divorce is required. prenuptial agreements are not exactly a welcome concept in the society but the agreement will be instrumental in resolving any disputes over division of assets during a divorce litigation. The Court often follows the terms mentioned in the prenuptial agreement while making the final judgement.

Prenuptial agreements need to be explicit in their terms. The purpose of the agreement is to avoid unwanted disputes and a well drafted agreement is necessary. There are a few things to keep in mind when signing a prenuptial agreement.

Review the document 

Like any legal document, it is mandatory that the parties signing the agreement get it reviewed by their respective attorneys to avoid any misunderstandings. Either party is required to be forthcoming with all their assets else, the agreement will end becoming void in the court. The agreement should be signed before the wedding takes place.

Consulting attorneys 

Most couples who are about to sign a prenuptial agreement often do not take it much seriously and get it reviewed by a friend or relative practicing law. prenuptial agreements are no joke and it is important to hire an attorney who is well versed in existing state laws and can draft a proper agreement.

What a prenuptial agreement does not resolve

Prenuptial agreements are mainly concerned with the division of assets. They do not resolve:

  • Issues that are non-financial such as division of any important chores.
  • Child related issues such as disputes over child support, child custody, and so on. 

Disclosing your assets and liabilities 

All your assets including stocks, funds, bank statements, inheritances, and liabilities like credit cards, loans, mortgages, and so on must be disclosed in the agreement. In case of a divorce, the Court will consider the agreement invalid if any hidden assets are discovered. Make a meticulous list of all your assets and liabilities to avoid nullification of the agreement.

Discussing division of property 

Both the individuals entering into marriage must discuss the division of their assets. They must rule out which assets were owned individually before marriage and which assets will be considered marital property, meaning both parties will have ownership of the assets equally or as decided by the individuals.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

3 Ways Small Business Owners Can Protect Business Assets In Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce lawyers; The Maggio Law FirmDivorce is a stressful experience, especially when it involves the division of properties, assets and businesses. For some, it is even more painful because a business is about all they have and splitting the business in two can cause a lot of financial damage. Small business owners know how tough it is to operate a business when the economy is constantly changing. Include a divorce and the stress reaches to new levels. So, what should a business owner do at times like these? They can follow three easy steps to limit the impact to their business from divorce.

  1. Maintain an amicable relationship with your ex

Nothing like a good talk between spouses when it comes to splitting businesses and assets. That’s the first thing you should do when faced with a similar situation. If your spouse is a business partner with you, it becomes even more crucial why an amicable relationship is necessary. Focus more on the business part and less on personal matters. An honest talk with your spouse can have great benefits for your business.

  1. Make prenuptial and postnuptial agreements

A prenuptial agreement is not the best gift your future spouse might be expecting from your side but it is more of a gift for your own self. It’s always better to stay optimistic about marriage. Signing a prenuptial agreement will give you the upper hand in business ownership. California is a state that has community property laws which mean that every property bought after marriage is likely to be split equally between both partners. In such cases, a postnuptial agreement comes in handy. It helps determine what part of the business each of you should own after it gets divided.

  1. Form a corporation or a trust

One of the best ways to protect the company and business assets is by forming a corporation or a trust. It’s best to incorporate the trust before you get married. It gives you sole ownership over your business and during divorce proceedings it becomes easy for you to defend it against a division.

If you form your company as a corporation or an LLC, you create a legal entity that is separately owned by you. However, if you use marital assets to pay for company expenses, it may be used to claim the company as a marital property.

By following these 3 steps, you will be able to avoid or at least minimize the damage a divorce can bring to your small business.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

You Should Know These Things About Prenuptial Agreements

Posted by: Gerald A. Maggio, Esq.

divorce lawyer Orange County; The Maggio Law FirmA legal contract that is agreed upon by two people prior to getting married is termed as a prenuptial agreement. In this agreement, the couple takes care of matters like the kind of property rights they will have in the event of their divorce, any property that they acquire during their marriage and the property, which each of them brings into their marriage.

There was a time when the prenuptial agreements were only for wealthy people. Today, things have changed. In case, both the spouses want to own a property jointly, one of them had given up his or her job to bring up the kids or have their own separate earnings, a prenuptial agreement is needed.

Couples can mention the kind of financial responsibilities each will have to fear on the event of their divorce. The agreement can also have in writing what are their e let actions from each other in the marriage and what should happen if their expectations are not fulfilled.

Here is a checklist of the things that should be covered in any prenuptial agreement. This list can help you to take a decision on whether you and your spouse should have such a contract or not.

Assets should be kept separated

The divorce laws of any state define and regulate what is a marital asset and what is not. The real issue is that you need to prove in the court, which were the assets acquired by you before the marriage and after the marriage collapsed. If you had created a prenuptial agreement, you will not need to prove the ownership of assets that were brought by you in the marriage. You just need to provide a list of such assets.

Inherited property

In case you have inherited any property, your spouse and you can agree in your prenuptial agreement that such property will belong to you in the event of a divorce.

Splitting debt

A prenuptial agreement can reduce your ownership when your spouse incurs debts during your marriage and while you get divorced. When you and your spouse agree on the way debts will be handled and the person who will be accountable for the debt in the prenuptial agreement, you can save your money and time when the breakup of your marriage tantamount to extensive litigation.

Divorce settlement negotiations

The most crucial point that a prenuptial agreement can constitute is who will receive what if there is a divorce. If you do not have such an agreement, the divorce laws if the state where you reside and the settlement negotiated by you will ascertain how your marital assets will be divided.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Can a Pre-Nup Agreement Protect You Regarding Spousal Support in CA?

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyPrenuptial agreements are often signed by those getting bound by a marriage contract to protect certain rights and to give themselves exemptions from certain liabilities, in case the marriage doesn’t work out. It can be a pretty useful piece of agreement in case something unforeseen happens.

However, many can’t get past a mental block because of a common perception that it shows lack of love and trust between the partners. However, most experts suggest that these apprehensions are unfounded.

Prenuptial agreement under California laws

Prenuptial agreements in California are governed by its Uniform Premarital Agreement Act.  So, in California, a prenuptial agreement is basically known as a premarital agreement and it is a legally binding document that encompasses most aspects of en engaged couple’s life, post marriage.

It mainly deals with the financial aspects of a family, namely asset ownership but it can address spousal support.  Section 1610 of the Uniform Premarital Agreement defines the word “property” and defines its domain. The partners will be protected from each other’s debts in case of a divorce and the property and income settlements may be made as per the agreement clauses, as long as they fulfill the tenets of law.  With regard to issues of spousal support, as long as what is agreed to is not “unconscionable” (meaning substantially one-sided and unfair to one of the parties) at the time of entering into the agreement, such provisions can be enforceable, but it is highly advisable that you have a family law attorney draft such provisions with care.

Family Code Section 1612 defines the clauses that can be inserted into a pre-nup agreement under California laws and what can’t be. It mainly deals with financial decisions made during the tenure of a couple’s marriage.  It strictly prohibits making any contract about the rights of a child and their support since CA laws clearly state that their rights can’t be infringed upon by those of their parents, in case of a divorce.  It also provides an understanding of your liability towards spousal support or alimony and states that you may not be able to invoke this agreement if the party against whom this agreement is being used was coerced, not represented by an independent counsel or is being invoked with unconscionable objectives.

A party can waive his or her right to an independent legal counsel, prior to entering into a premarital agreement but it should be supported by a waiver written and notarized on a paper separate from the prenuptial agreement. There must also be a gap of seven days before signing the agreement and must have the legal capacity to sign it. If a party is not proficient in English, the agreement must be translated into his/her native language and is entitled to a full disclosure of terms, rights and obligations of the agreement.  The agreement can’t be invoked in case of violation of some public policies, as defined by the laws in California.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Prenuptial Agreements Can Be A Great Act Of Prevention

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyA preventive approach is always better than being careless and then repent later on. This is especially true for agreements related to the spousal property. In litigations related to the division of divorce property endless hours are spent by the lawyers for disputing factors like amount of spousal support, property classification among others. However, such conflicts can be easily resolved through a premarital agreement through just a few paragraphs. Moreover, such contracts can help in other departments too like resolving contentious questions related to an inheritance that may result in expensive probate litigation. Moreover, premarital agreements can convert divorce-related succession issues into family-owned businesses more hassle free that it could be otherwise.

In case you are contemplating about going ahead with a prenuptial agreement, you must know the major benefits associated with it which surpasses the advantages any day.

Benefits of prenuptial agreements

When you go for a prenuptial arrangement, you can get the following advantages out of it.

  • Your individual property is protected.
  • You can support your estate plan
  • You can also give a definition to which is a community or marital property
  • Set up ground rules and procedures to decide future matters
  • Get special agreements clarified between you
  • Save money and minimize conflicts in the event of your divorce

Prenuptial agreements can make your relationship stronger

When you go for a prenup, you may come out stronger in your relationship. Though there is a misconception among some people that there may be a conflict while negotiation through a prenup takes place when you communicate freely about your financial matters, your relationship quality can improve to a great extent and also ensures free communication between you and your spouse.

Though, you may not have your signature on the written document at the end of the day, speaking freely about property and money can do away with misunderstandings, which might otherwise pop between the both of you. You need to note that eventually you and your spouse will end up discussing financial matters. Most legal experts and psychologists will advise you that it is better to start doing it early, in case you are equipped to handle it.

Moreover, spouses who have become parents from an earlier relationship should also contemplate of going ahead with a prenuptial agreement.

After all, kids from earlier marriages also deserve to get all possible protection while one walks down the aisle once more. Prenuptial arrangement can easily achieve this by ensuring that some assets like insurance policies, retirement accounts, and some other assets should be in the names of such kids instead of in the name of their new spouses. Otherwise, the latter may inherit them when their partner is deceased.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Can a Prenuptial Agreement be Modified?

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyPrenuptial agreements are essentially contracts which couples enter into prior to the marriage. This contract determines what happens to the spouses and their income/assets in the event of divorce, separation or death. Very specifically, such agreements help in preserving the nature of both spouses’ property if the marriage terminates.

Modification of a Prenuptial Agreement

The prenuptial agreement between you and your partner can in fact be legally modified or altered sometime in the future (when agreed by both parties). Those terms of the agreement which are not altered remain as is, until and unless both spouses demand cancellation of the entire prenuptial agreement in written.

Generally speaking, when a prenuptial agreement needs to be modified, both the parties review each and every provision in the existing agreement and take a decision regarding which agreements need to be modified.

The validity of a prenuptial agreement is dependent on complete disclosure by both spouses with respect to the income, assets, liabilities and debts. In case there is a change in any aspect of this information since the time the prenuptial agreement was signed, it needs to be shared openly. It would be incorrect to assume that the other party is aware about the change.

There are some states in which the prenuptial agreement is altered without involving the party. For instance, it is possible for prenuptial agreements to become void a year and half after the involved parties become parents (until and unless there is a renewal of the agreement in writing at a later stage).

Revision or Termination?

Both parties need to decide whether they wish to modify or end their prenuptial agreement. When a major portion of the existing agreement needs to be modified, then it might be more sensible to end it completely.

It is important to know that in case the prenuptial agreement is completely revoked, state marital property laws will become applicable to property division if and when the spouses decide to terminate the marriage.

Hiring an Attorney

Even though it is possible to revoke or modify a prenuptial agreement after marriage, the parties need to get consultation with an experienced family lawyer. A fiduciary obligation is imposed on the spouses after marriage. This means that the court will be very strict in scrutinizing the changes made to your prenuptial agreement. So if you wish to modify or revise your prenuptial agreement anytime after marriage, you might benefit by taking the help of an experienced family law attorney.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

3 Reasons Why Your Premarital Agreement Might Be Invalid

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyPrenups are a great option for couples who are thinking of tying the knot. They are not only meant to protect the interests and rights of both the parties, but also are effective in minimizing conflicts and disagreements in the event of a divorce. However, many a time, the spouses who design their own prenups end up making glaring mistakes in the text. Such mistakes can cause the entire prenup to become invalid in the eyes of the law. Let us have a look at some of the factors that might make a premarital agreement unenforceable by your state laws.

#1:  An absence of independent legal counsel

The parties signing up the agreement must have sufficient time before they can make up their mind to agree to the terms of the prenup. Also, they must fully understand the implication of each of the legal terms and clauses mentioned on the prenup. The state of California, therefore, makes it mandatory, for both the parties signing the prenuptial agreement to have independent legal representation in the form of a personal attorney, to render the agreement valid. In case, either one or both the parties fail to obtain legal counsel before signing the prenup, the document will be considered unenforceable by the state law. 

#2:  The agreement possesses fraudulent information

There are many cases, wherein one of the partners purposely discloses false or incorrect information regarding the value of his/her property and assets in the prenup. If a spouse is able to prove in the court of law that his or her partner has made an incorrect declaration of their property or assets for obtaining an undue advantage over the former, they have a strong case for requesting the judge to consider the prenup invalid. 

#3:  Duress or coercion

A prenup will be considered as invalid if one party has been forced into signing the document or did not have the mental capacity to do so at the time of signing. For example, if a spouse forces his or her partner, who is under the influence of alcohol or drugs to sign the agreement, the prenup will not be considered enforceable by the state laws. Another example of a prenup being rendered invalid is when a party is coerced against their will to sign the agreement in exchange for some favors.

It is, therefore, advisable, to get a legal consultation from an attorney while crafting a prenup, in order to eliminate the chances of you encountering any legal pitfalls in the future.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

What Cannot Be Included on Your Prenuptial Agreement?

Posted by: Gerald A. Maggio, Esq.

divorce lawyer Orange County; The Maggio Law FirmAlthough a prenuptial agreement is an excellent approach to minimizing conflicts in the event of a divorce or a legal separation, it is absolutely essential for it to be designed in such a way that it is eligible for enforcement by the state court. The state laws have imposed restrictions on the inclusion of certain aspects of a marriage or related issues, which would otherwise render the agreement as invalid or unenforceable.

Provisions that specify anything illegal 

All the states restrict you from mentioning any illegal provision that stands against public policy, in your prenuptial agreement. In the event of a failure to follow this guideline the entire agreement falls at the risk of being completely nullified. 

Instruction for child custody, visitation or support 

A prenuptial agreement cannot include the details of child support, visitation or custody related issues. In the event of a divorce, it is the right of the court to evaluate and announce the final settlement in such matters, by keeping the best interests of the child in mind. The court will not, under any circumstance, take into consideration the provisions of a prenup in deciding a child’s custody, visitation or support settlement and will announce the verdict at its own sole discretion. 

Waiver of spousal support or alimony 

The California state laws limit an individual’s right to modify or waiver spousal support by means of a prenuptial agreement. The implication is that you cannot mention provisions completely denying your obligation of providing alimony or support to your partner, if you decide to separate from him or her. 

Intentionally encourage divorce 

If the court of law is able to establish that the provisions of a prenuptial agreement have been intentionally designed to promote or encourage a divorce or a legal separation, the court will render the agreement unenforceable. A court cautiously scrutinizes all the aspects of a prenuptial agreement in order to prevent any intentional divorces, which have been pre planned for gaining personal financial incentives out of a property division. 

Guidelines about non-financial aspects of the relationship 

Specific provisions that outline the relationship duties of a marriage are better dealt with separately and should not be mentioned on your prenup agreement. For example, you cannot list the division of household responsibilities, agreements of having and raising offspring or your relationship with the step children or in-laws on a prenup. Such non financial issues are not held binding in a court of law.

For more information about premarital agreements in California, contact The Maggio Law Firm at (949) 553-0304.

The Terms You Can Put In Your Prenuptial Agreement

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyA prenuptial or premarital agreement not only provides a sense of security to both the partners but also minimizes marital conflicts and disputes. However, the State of California stipulates specific rules and guidelines of the terms and clauses that can be incorporated in a prenuptial agreement.

Keep your finances separate 

Every state has its own guidelines to classify certain assets acquired within a marriage as marital or separate property.  In the event of a divorce or a death of either spouse, the court of law is obliged to equally divide the marital assets between both the parties. In case you do not want your individually acquired property to be divided according to the state laws, you can mention the same in your prenuptial agreement.

Limit your debt liability

Both you and your spouse might bring along individual assets as well as debts to your marriage. However, in case of a default, the creditors might turn to your marital or community property in a bid to pay off the debt of either spouse. In order to ensure that your marital assets remain untouched, you can limit each other’s debt liability by mentioning a term to that effect in your prenuptial agreement.

Inheritance for your children from a previous marriage

If either you or your spouse has children from another marriage from the past, you can ensure that they inherit their share from your property, by mentioning it in your prenup agreement. This will not only minimize conflicts, but also ensure that your children receive adequate financial support in the event of your demise.

Keep your family property within your bloodline

If you own a family business or heirloom or are entitled to a future inheritance, you can keep it within your birth family by specifying the details of your wish in the prenuptial agreement. Since your spouse will be in agreement of keeping the property separate from the relationship, you can stay assured that there will no conflicts regarding its distribution in the future.

Provide instructions for property distribution in a divorce

As aforementioned, every state has its specific laws that govern the ultimate division and distribution of property in the event of a divorce. In other words, the court of law decides who gets what. However, you can effectively bypass the protocol by specifying in your prenup agreement, as to who will be entitled to what asset or property in the event of a divorce.

If you are thinking of creating a prenuptial agreement with your partner, contact The Maggio Law Firm who can assist you in clearly defining the terms of the agreement.

 
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