Written agreements form the backbone of our financial and economic system. Most business owners would not dream of forming a partnership without a written agreement. Most employers would not consider hiring someone without a written employment contract. Buying or selling a house without a written contract is out of the question.
And yet there is one much more important relationship that is very seldom accompanied with a written agreement – the relationship of marriage.
Couples heading toward marriage usually do not even consider a pre-marital agreement – the very idea seems distasteful. After all, they love each other and believe they will be together forever, so why would they need a premarital agreement?
The fact is, that every married couple DOES HAVE a premarital agreement – if they haven’t drafted their own, they are using the one the State drafted for them.
The State-Drafted premarital agreement seems pretty fair. Under California law, any property acquired by either spouse during the marriage is generally considered community property and is equally divided if the marriage is dissolved. [California Family Code Sec. 2550.[ Unfortunately, it may take a long and expensive court battle to really determine what is and what is not community property, and what an equal division would be.
Prudent couples contemplating marriage can avoid this trouble. They can agree, for example, that anything acquired by spouse A will be the property of spouse A. Or, they could agree that the division of community property will be done by binding arbitration by an arbitrator of their choice.
The requirements for a pre-marital agreement in California are covered in by the Uniform Premarital Agreement Act [Family Code Sections 1610-1617.] Some of the requirements are:
- The agreement must be in writing.
- Each party must have 7 days after being presented with the agreement before signing it.
- Each party must make full disclosure regarding income, property and financial obligations.
- A pre-marital agreement cannot affect child support or child custody, but can determine spousal support (alimony) obligations. A party waiving spousal support must be represented by an attorney.
But what if you’re already married? Does that mean you’re out of luck and will have to wait for the next marriage? Not necessarily. A post-marital agreement can accomplish most of the same things that a pre-marital agreement can. Some happily married couples decide it is in their best interests to have an agreement defining their property rights. They might decide, for example, that their house should be the sole property of spouse A, so that it will be safe from potential future creditors of spouse B.
What if you’re cohabitating with your Significant Other but don’t plan on getting married? Then it’s even more important to have an agreement defining your property rights. Because the law is less well defined in regard to non-married couples, the odds of an expensive court battle (and for a bad result) are greater than with married couples.
The moral of the story is – if you’re planning on getting married, already are married, or just want to cohabitate — decide on how you want your relationship to be and then get it put in writing.
For a free consultation regarding your rights and options, call (213) 509-1515.