For Better or For Worse = You Should Protect Your Assets
by Sommer C. Horton
The most costly mistake of marriage can be made before you even walk down the aisle. Rising superstar, Katy Perry, learned this the hard way after deciding to end her 14 month marriage with British comedian, Russell Brand. Because the couple never signed a prenuptial agreement, Brand could be entitled to an estimated $30 million from Perry’s fortune under California’s community property law. Please get prepared so this does not happen to you. That wise old saying “It is better to be safe than sorry” definitely applies here. Whether you are planning on getting married or are already married, it is time to pop the real question: will you sign this agreement?
Prenuptial Agreements – If you are about to get married you should protect your assets. Prenuptial agreements are contracts between two people who intend to marry each other. These agreements allow couples to create a “road map” that structures their finances and other nonfinancial considerations according to a mutually predetermined plan. Since these agreements typically provide for the distribution of assets upon death or divorce, they serve an important role in effective estate planning.
Prenuptial agreements typically include the following provisions: the disposition of real and personal property rights upon divorce, legal separation or death; the disposition of life insurance death benefits; terms as to how children will be raised and, among other things, it will address and resolve spousal support issues.
Postnuptial Agreements – Postnuptial agreements allow couples to formalize a plan with regard to marital and pre-marital assets – after they are legally married. These agreements are often created when the financial status of one spouse exceeds that of the other.
Courts exercise great scrutiny in enforcing these agreements. Courts consider the following: whether there was full disclosure of assets before the agreement was executed, whether the agreement is fair, whether each spouse’s contribution to the marriage has been considered; and, among other things, if one spouse coerced the other to execute the agreement.
Whether you are preparing to enter into marriage or you are already married, creating a prenuptial or postnuptial agreement enables you and your spouse to protect your financial assets and efficiently plan for the future.
Sommer Horton is an associate at Neil Dymott. Her areas of practice include family law, estate planning, trust administration and probate. For further information, Ms. Horton can be reached at (951) 303-3930 or shorton@neildymott.com“>shorton@neildymott.com