Myths About Prenuptial Agreements

Posted by: Gerald A. Maggio, Esq.

Top divorce attorneys Orange County; The Maggio Law FirmPrenuptial agreements are designed to take a major chunk of the sting away from most divorce cases, by preserving the interests and expectations of both the divorcing parties and keeping the surprise element away from the trial proceedings. In California, a prenup agreement is referred to as a premarital agreement, and governed by the statutes of the state’s Uniform Premarital Agreement Act. However, there are a lot of myths and preconceived notions about the prenup, courtesy popular culture and belief. We are here to debunk a few such myths, and provide you with the correct facts regarding a prenuptial agreement.

Prenuptial agreements are meant for wealthy celebs only

The fact here is that it does not really matter whether or not you have a large estate or property. A prenup agreement will not only provide you clarity of how to manage your finances with your spouse, but also prevent unnecessary conflicts and dispute regarding the same. Having a discussion about your finances, before taking your relationship to the next level will be an effective way of avoiding everyday arguments. 

Prenuptial agreements are biased towards the wealthier spouse

As per the law, a prenup is supposed to be designed in such a way that it conserves and enforces the rights and interests of both the partners involved. An agreement which is biased towards either spouse, will be recognized as unconscionable, and will not be enforced by the court of law. The basis of a prenup is that it should be signed voluntarily by both the parties by their own free will. Furthermore, it is the obligation of both parties to ensure a comprehensive disclosure of their assets and debts to each other. 

Premarital agreements are created to address each and every issue related to a divorce

There is no such law that compulsorily requires a prenuptial agreement to carry instructions for each and every issue that crops up as a byproduct of a divorce. However, since it is largely a private contract, it is up to the partners to decide upon the level of intricacy they want out of the agreement. If you wish to limit your prenup to the protection of your finances, so be it. On the other hand, if you wish to incorporate other aspects such as the execution of a will or a trust, you can create your prenup accordingly. 

A cautiously crafted prenuptial agreement not only provides a measure of peace within the relationship, but also strengthens the bond between the partners by minimizing everyday conflicts over petty issues.

Getting married and divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself about California law before you get married to fully understand why a premarital agreement makes sense.

Invalidating Sections of a Prenuptial Agreement

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyA prenuptial agreement is a legal contract signed by spouses-to-be. It is an understanding about which assets will become a part of the marital property, who will continue to own what assets and how will the finances and assets be divided if a divorce ever occurs. A prenup generally protects the spouse with greater wealth so that they do not have to lose in the event of a divorce.

Women should always opt for a well-executed pre-nuptial agreement. A thoughtfully prepared prenup can be an excellent means of protecting your gifts or inheritances if you ever have to go through a divorce. But the truth is that prenuptial agreements can be contested and certain provisions of the agreement can be invalidated.

Grounds for invalidating a prenup

A prenuptial agreement can be declared invalid on the following grounds –

  • If it can be proved that the prenup is fraudulent. It may be possible that either of the spouses did not disclose their debts, properties and other assets completely.
  • If any party was forced to sign the agreement.
  • If the paperwork is incomplete and inaccurately done.
  • If the agreement was executed without the presence of and validation from any legal representative.
  • If the provisions are not practical.

Ways to prevent invalidation

As it is quite possible to contest and invalidate a prenup on the above mentioned grounds, it goes without saying that you need to make your prenup as foolproof as possible. Apart from that, certain other measures can be taken to prevent the invalidation of a prenuptial agreement and also protect one’s assets. These include –

  • Each spouse should have separate assets and should maintain them separately. Co-owning or having joint accounts will allow the assets to be considered as marital property.
  • Hire an asset protection trust attorney and consult with them. One way of ensuring absolute protection of your separate properties includes transferring ownership into a trust. Do it before you get married or at least before you file for a divorce.
  • Get your properties, businesses and other assets valued at the time of your marriage. Also, get them appraised.

Getting divorced in California can be complicated, so it’s important to know about the divorce process first and then about prenuptial agreement.  So download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Getting a Divorce: How Your Prenup Comes into Play

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyIt has happened. You were both hoping it would not come to this, but it has, and you and your spouse are getting a divorce. As you handle the many details that the divorce process involves, you remember that you had actually planned for this eventuality, you and your spouse had signed a prenuptial agreement. However, you might wonder, how exactly does the prenuptial agreement come into play during the proceedings?

The answer usually depends on the agreement itself. Here are the things you need to be aware of when you head into court with a prenup.

  1. The document needs to show ample proof that no financial assets or liabilities were concealed during the time of signing

Basically, your prenuptial agreement should not be fraudulent, and you need to be able to prove that. A major part of this is making sure that you declared everything you needed, to before signing the agreement, but it might also involve you gathering evidence to support this claim.

  1. The document needs to be in a legally viable format, and should have been filed properly

This is perhaps the most common reason for a prenup being invalidated in court. Your prenuptial agreement needs to be written out in a paper, preferably by a lawyer, with an equitable distribution of assets, signed by both parties involved under advisement from their legal counsel, and witnessed. If there is any issue in any stage of this process, if your prenup is an oral agreement that you and your spouse came to, for example, then there is a very good chance that the document would not hold up well during the divorce proceedings. If there are any doubts regarding the veracity of your prenuptial agreement, make sure you discuss this with your lawyer.

  1. The document needs to be signed by able individuals, and they cannot be coerced or forced

In case you believe you were not thinking clearly due to factors like coercion, manipulation, blackmail, drugs, illness, and so on, when you signed the prenuptial agreement, it might be cause enough for the agreement to be declared invalid. Disclose any doubts you might have had about your or your spouse’s ability to enter a legal, binding agreement with your lawyer before proceedings begin.

  1. The agreement must be conscionable

If you signed an agreement which stipulated that you would receive no spousal support under any circumstances where there is a huge disparity of income and wealth between the parties at the time that the agreement was entered into, then it might be in your best interest to have that prenuptial agreement invalidated.  Courts frown upon blatantly unfair or lop-sided agreements that favor one spouse to the vast detriment of the other.

There are many ways in which a prenuptial agreement can affect your divorce proceedings, and to have things go your way, you need to disclose everything about the agreement to your lawyer. Only full disclosure of your agreement, the contents and the circumstances under which it was signed, to your lawyer, can help you during your divorce proceedings.

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.  

How Does A Prenuptial Agreement Impact Divorce Settlements?

Posted by: Gerald A. Maggio, Esq.

Top divorce attorneys Orange County; The Maggio Law FirmPrenuptial agreements or prenups are contracts undertaken between two partners who are soon to be married, and detail the terms of what will happen, should the marriage go sour. If you and your soon to be ex had the foresight to work out a prenuptial agreement before you got married, your divorce proceedings should, in general, be a much smoother process. Here’s a look at how having a prenuptial agreement impacts divorce settlements.

What does a prenup do?

A prenuptial agreement is a written undertaking that is legally binding, like any contract, with specific terms laid out usually with regards to the divisions of assets in the event of a divorce. It may also lay down specific conditions or circumstances under which one spouse may give up their rights to the marital assets. For instance, if the prenup says a spouse will not get anything if they are found guilty of adultery, are abusive or use drugs, then this will steer the divorce proceedings in that direction.

Proving infidelity or abuse

In case the prenup has some conditions which exclude either the husband or the wife from taking their share of the assets, for instance if they cheat during the marriage, then the onus is on the other spouse to prove this adultery. Once this is proven in a court of law, the other spouse will lose their right to the assets, as per the terms of the contract. If however, this cannot be proven, then a good divorce attorney might still be able to help get some of the assets, if not an equitable share.

Dealing with what isn’t in the prenup

While a prenup is usually well thought through and arrived at through mediation and with the consultation of a professional, and checked by your attorneys, there are times when it doesn’t cover every eventuality. For these aspects of the divorce, the regular route of mediation or heading to family courts will play out.

Caveat!

Having a prenup doesn’t mean you are covered, if the contract doesn’t hold water in court due to improper phrasing or missed details in the drafting. This is why you must be extra careful when drawing up the prenuptial agreement. Work with family law attorneys with experience in prenups as well as the laws specific to the area you live in.

Even if it is legally accurate, a prenup can be dismissed or ignored by the court if it is deemed unfair or fails to stand up to the requirements of the state the divorce is being filed in. So be sure your prenup is not just perfectly drafted, but also unambiguous, logical and most importantly, justifiable.

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.

Giada De Laurentiis Divorce Highlights Importance of Prenuptial Agreements

Posted by: Gerald A. Maggio, Esq.

Divorce attorneys Orange County; The Maggio Law FirmFood Network celebrity chef Giada De Laurentiis must give up half her assets earned while married to ex-husband Todd Thompson as the divorced couple did not sign a prenuptial agreement when they married in 2003.

The couple’s divorce was finalized on September 3, 2015 after 11 years of marriage. The net worth of De Laurentiis is estimated at around $20 million, while her fashion designer ex-husband is reportedly worth $15 million. When De Laurentiis, 44, first married Thompson, her career was still in its early stages. During their marriage, De Laurentiis opened a restaurant and hosted several television shows on Food Network. She also wrote a number of cookbooks and launched a kitchenware line.

Many couples fail to anticipate their financial growth and success when they get married. A prenuptial agreement can help protect significant assets, along with giving each spouse control over how their money matters are handled in the event their relationship ends.  A prenuptial agreement allows the couple to determine before the wedding how their assets and money will be divided in case they divorce. Per California family law if divorcing spouses do not have a prenuptial agreement, their community property is distributed equally between them. Community property is defined as the assets and income each partner acquires during a marriage.

As the higher-earning spouse, De Laurentiis will share with Thompson 50 percent of the profits from every cookbook she published during their marriage and half of the unpaid advances to upcoming cookbooks. They will also equally divide their various bank accounts worth more than $2 million. Had they signed a prenuptial agreement, De Laurentiis would have been able to protect much of her estate.

De Laurentiis and Thompson have chosen to share joint custody of their 7-year-old daughter. As both parties have the means to continue their current lifestyles, spousal support will not be awarded in this case.

Rather than indicating lack of trust, a prenuptial agreement can help to reduce unnecessary conflict between spouses regarding asset distribution in case of a split, which can adversely affect the children that are part of the marriage.  A prenup is not just applicable to millionaires. It is a useful financial planning tool for anyone looking to protect their assets.

To learn more, see the following:

Learn more at http://www.maggiolawfirm.com/

  • http://www.huffingtonpost.com/entry/giada-de-laurentiis-divorce-is-finalized-and-shell-pay-child-support_55e9ce21e4b093be51bb5b4c
  • http://www.foxnews.com/entertainment/2015/09/04/giada-de-laurentiis-is-officially-divorced-and-owes-ex-husband-money/
  • http://divorce.usattorneys.com/prenup-giada-de-laurentiis-divorce-heating/
  • http://www.wrattorney.net/blog/2015/01/giada-de-laurentiis-may-lose-assets-without-prenuptial-agreement.shtml

The Importance of Prenuptial Agreements for Remarriage

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyOnce you have gone through a divorce, the pain, torment and emotional distress of divorce would be there for you to experience. Divorce can be a sapping experience emotionally as well as financially. This is especially true for spouses that have had to part with a significant chunk of their estate to an idle spouse. Once they have gone through a divorce, they will feel betrayed by the concept of marriage as one that can rid you of your hard-earned assets.

For such spouses the thought of remarrying can bring up the same ghosts of the past. To make sure you avoid them, a prenuptial agreement is the best way out. A prenuptial agreement simply is an agreement that deals with the financial consequences of an Orange County divorce even before the marriage or remarriage has taken place.

A prenuptial agreement is recognized by courts and can be particularly important for those spouses looking to remarry. Here are a few reasons that make it an important addition for them.

Protect your wealth and salary from being distributed further

When you are remarrying you have already ceased a part of your estate to your ex spouse and are likely to be a paying a certain amount off your income to your ex spouse in alimony and child support. When you marry again the resources will be smaller and you may not be able to afford their distribution any further. For that arrangement to be in place you’ll need a pre nuptial agreement that clearly lays down the law as to what the other spouses will get if the marriage ends in an orange County divorce.

When your partner has a high debt load

When you marry a person without checking for their debt load, you need to understand that the rule is all things are to be shared between the spouses in the event of a divorce and liabilities such as debt are included. Before you remarry make sure you have a pre nuptial agreement with the spouse to be that ensure that the debt liabilities aren’t transferred on your shoulder once you have gone through an Orange County divorce.

To keep your business from being affected by your private life

There are cases when you may own a business with another business partner. In the case when you haven’t had a prenuptial agreement drawn up, some portion of your share in the company could be transferred to your former spouses. This would not only cause issues in ownership of the company but can also affect the decision making powers etc. The best way to avoid it is to use prenuptial agreements before you remarry to ensure your business stays out of your private life.

Limitations of Prenuptial Agreements

Posted by: Gerald A. Maggio, Esq.

prenuptial agreements Orange CountyA prenuptial agreement is an agreement that is meant to work out financial terms and post marital expectations as well as to preserve both party’s assets as separate property.  The role of prenuptial agreements has increased in the past few years with more and more people trying to protect their assets legally.

Prenuptial agreements, also known as premarital agreements, basically outline the post divorce assets and finances that each of the spouse will be entitled to. These are drawn up usually by wealthier spouses to keep hold of more than a portion of the wealth they have built up, but also upper middle class individuals.

There are a few things that prenuptial agreements can do and some that they can’t. Here is a list of some of a few of the limitations on what prenuptial agreements can do.

Spouses Cannot Be Punished For Using A Prenuptial Agreement

No spouse can be punished using a prenuptial agreement. This is because the State of California continues to be a no-fault divorce state. This means that generally even though a spouse may have been unfaithful, the other generally cannot use the prenuptial agreement to punish them.

Yet, there can be some exceptions such as in the case of a spouse who physically or verbally abuses the other spouse. A spouse that is proven to be abusive can be punished using the prenuptial agreement and be refrained from receiving the finances and the support that he or she is entitled to.

Prenuptial Agreements Are Not Entitled To Change Child Support And Child Custody

When couples go through an Orange County divorce, the family courts decide on the cases of using the California Family Code. Keeping this in mind, while prenuptial agreements can define the division of assets etc., when it comes to the issues of children in divorce, the scope of prenuptial agreements is limited.

Family law courts don’t allow the agreements to overall or make determinations concerning child custody, child support, and child visitation.  Prenuptial agreements can have a say with regard to the property and spousal support only.  Yet, in matters related to the children, the final authority lies with the courts. This action is meant to protect the best interest of the child at all times.

Prenuptial Agreements Are Not Allowed To Reign Over Day To Day Affairs

Prenuptial agreements have been primarily made to protect the division of assets between the two spouses and hence it is restricted in its ability to dictate day to day affairs between the spouses. Any issue that interferes with the choice and free will of the spouses is not allowed to be in a prenuptial agreement. An example can be the number of children to be born out of the wedlock.

When a Billion Dollar Divorce Settlement is Not Enough

Posted by: Gerald A. Maggio, Esq.

Top-Orange-County-divorce-attorneys; The Maggio Law FirmIt was considered to be the divorce of the century, involving Oklahoma oil magnate, Harold Hamm, and his ex-wife, Sue Ann Hamm (Arnall), once a lawyer for her husband’s company prior to her marriage to him. Sue Ann Hamm was awarded assets and cash totalling over a billion dollars. However, by her estimation, the award was not an equitable one, considering Harold Hamm’s $18 billion increased income over their 26-year marriage.

The main issue is when the active portion (increases) of the income began – before or during their marriage. Arnall asserts they happened during the marriage. Hamm suggests they happened before the marriage. Arnall, also an economist by training, intends to appeal, a process that may take up to two years to be resolved. Hamm ended up keeping close to 94 percent of the estimated $18 billion in income derived from Continental shares. The trial judge referred to the shares as separate property. When the divorce trial was in progress Hamm’s Continental was valued at about $18 billion. Since that time period, share prices have fallen due to plummeting oil prices globally.

The complicating factor in this expensive and high profile divorce is that the Hamms did not have a prenuptial agreement. No matter what the law of the resident state suggests, not having a prenuptial agreement makes things far more difficult to resolve for both parties. In Oklahoma for instance, the law states that enhanced premarital property value be divided equitably in the face of a divorce if the enhanced value was the result of either spouses skills and/or efforts during their marriage.

No matter what he said/she said, this settlement was far more protracted than it needed to be. In the presence of a prenuptial agreement, unless it was signed under duress or false information was given which did not allow for an informed decision, this divorce settlement and award may have gone in an entirely different direction. Now, the process of extended litigation is painful and expensive, no matter how much money is at stake.

The trouble with the legal system when it comes to divorces is that it is set up to be an adversarial process in which someone wins and someone loses and both pay a hefty fee to hash things out. It ostensibly addresses a wrong done against a spouse. Nowadays, despite prenuptial agreements and mediation, this mindset still prevails. Couples who are able to set aside their issues and work toward a common goal by attempting mediation often fare better when the process is concluded. However, it is far better to have a prenuptial agreement.

Why Prenuptial Agreements Are Not Only for the Wealthy

Posted by: Gerald A. Maggio, Esq.

Prenuptial agreements Orange County; The Maggio Law FirmPrenuptial agreements, also known as premarital agreements, are excellent ways to settle property issues in the instance that a marriage falls apart. The mess of deciding who is entitled to what becomes easier, as it’s already been decided before the two partners decided to end their marriage.

Both parties can otherwise be fighting for their rights to property, but with a prenuptial agreement, this scenario is usually a lot different. Even with the benefits of prenup known, people are still a little unclear on how obtaining a prenup will benefit them.

Naturally, they think that such agreements are only for people with wealth.  This is a misconception.  The reasons listed here debunk this and many other myths that have formed over the years about prenups:

1.     Prenups are Only Reserved for the Wealthy

Let’s get this one out of the way. Every marriage isn’t perfect, there are flaws, and when those become too much to bear, people separate. The legal fees incurred during the divorce proceedings are yet another problem especially for the ordinary couple.  With a prenup in hand, everything is there in writing. Hence, if you own a lot of real estate or run a successful business and divorce rears its ugly head, you will be glad that you and your partner signed a prenup.

2.     Prenups are Only Valuable if the Relationship Ends

Business-minded folks who regularly invest in property could benefit from a prenup in many ways. First, the majority of the estate will stay with you. Second, your partner won’t be able to cut you out of your own property. Third, your children from a previous marriage (if you have any) can remain financially secured.

3.     Prenups Send Negative Signals to Your Partner

You may have a lot of money saved, while your partner might not. So, why take a chance with losing half of it if the marriage crumbles. You don’t have to spring the prenup on them, but get them to gradually agree by stating some facts. Remember that signing a prenup isn’t forecasting the end of the marriage, it is merely clarifying the rights of the parties concerning property and support issues.

4.     Prenups Won’t Uphold in Court

This can occasionally be true is the legal requirements of such agreements in your state have not been met.  For example, California law requires that the parties have their own independent attorneys to draft, review, and counsel them concerning such agreements.  Also, the party who is presented with such agreement must have had at least 7 days from presentment of it before signing it.  A prenuptial agreement presented the day before the wedding is simply not going to be enforceable in California.  A prenuptial agreement drafted with the assistance of an attorney who understands the legal requirements is much more likely to be upheld in court. Prenups aren’t Expensive

The bottom line is that divorce costs more than getting a prenuptial agreement. Getting a prenuptial agreement isn’t expensive and in the future can save you from a lot of trouble, because it is a one-time cost that’s sure to save you a lot of money if your marriage ends.

6 Reasons Why Couples Should Get a Prenuptial Agreement

Posted by: Gerald A. Maggio, Esq.

Top Orange County divorce lawyers; The Maggio Law FirmCouples in the process of getting divorced have to deal with a multitude of issues, with financial assets being one of them. The dispute over financial assets, apart from the custody of children, is the main reason why finalizing the end of a marriage takes a long time. Although no one likes the idea of a divorce, a newly-engaged couple should get a prenuptial agreement drawn up before tying the knot.

“Why get a prenuptial agreement, because we are so in love?”

In the United States, at least 50% of marriages end up in divorce. Being optimistic about your impending nuptials is great, but the “if” factor of things not turning out as planned is there. Why not talk with your partner and come to a mutual and logical understanding of why you both should consider signing the prenuptial agreement. Here are reasons why couples should get a prenup:

  1. Wealthy Partner- if one partner is wealthier than the other one, insisting on a prenup is your right, as marriages can be unpredictable and it will give you the peace of mind that your significant other is not after your money.
  2. Big Earner- You both work, but you earn more money than your partner. If the marriage collapses, one party would have to pay huge amounts in alimony. Signing a prenup can limit the amount of alimony a partner would have to pay.
  3. Second Marriage- If you remarry or have kids from your previous marriage, you want to ensure that, after your death, money is distributed evenly amongst all your immediate family members. Getting your partner to sign a prenup provides you with that assurance.
  4. Huge Debt- If you are being hitched to someone that you know has a huge debt or loan on their shoulders that they haven’t paid, you may want to persuade them to sign a prenuptial agreement. If you marry them without signing a prenup, you would be equal partners in paying the debt.
  5. Business Owner- If you are an owner of a successful business and you didn’t have your partner sign a prenup, the end of the marriage could mean that your partner could wind up owning a part of your business.
  6. Not Wealthy- A prenuptial agreement doesn’t just benefit the wealthy partner, but the partner not so well off can also benefit from it. In the instance that the marriage ends, a prenup signed before the marriage can protect the financially weaker partner, as the division of assets and spousal support were pre-determined.

Prenuptial agreement is a valuable piece of document to have before you say, “I do,” to each other. The agreement doesn’t mean that you forecast the doom of your marriage. Instead, it serves as a fair division of assets, if your marriage crumbles.

Couples deciding to walk down the aisle should contact us to get more information on prenuptial agreement laws in California.

 
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