Collaborative Practice Marin
We Want a Prenup But We are Already Married....Now What?

Post-marital agreements, much like premarital agreements, can be opportunities for married couples to collaboratively create agreements around things like:

  • How to deal with day to day finances
  • How to allocate their income between separate and community propoerty
  • How to work together to plan for retirement
  • How to treat certain income and/or assets differently than the law might treat them
  • How to create a better sense of partnership between a couple, both emotionally and financially
  • How to create a plan to take care of each other going forward and to take care of children from both from the marriage and prior relationships
  • How to take care of each other in the event of a divorce

There are many times during a marriage that the issue of having a Post-Marital Agreement may come up. As example, a couple who are just about to get married realize too late that they would like to have a premarital agreement. Or, a long married couple decides that they would like to have formal agreements around how to treat assets and income going forward to have more parity or to reallocate their respective interest in certain assets (community to separate or separate to community).

Also, married couples with blended families frequently decide they want agreements around their estate planning so that they can take care of each other and still set aside something for their children from prior relationships. All of these couples could benefit from a collaborative post-marital agreement (sometimes referred to as a post-nuptial agreement).

Having said that, post-marital agreements differ significantly from premarital agreements. First, once you are married, in the eyes of the law, a couple is now considered to owe a “fiduciary duty” to one another. This is a fancy legal term that essentially means that a married couple is considered to be in a relationship of trust with one another and that they are to act in their collective best interest. Because of this, these agreements require that both parties make full and complete financial disclosures to each other, that they each have counsel to review and advise them, and that there is a sense of “fairness” to the agreement. In California, an agreement that is deemed to be too one sided may not be enforceable. The same would be true for an agreement that was entered into where both parties were not completely transparent with each other about their assets and income.

For couples just starting out, these agreements can help them create a platform around how they want to manage their financial lives. The agreements can also identify assets and obligations that each spouse may be bringing into the marriage as well as characterize how they want their respective incomes to be treated during the marriage. This can help a couple create their own sense of partnership that may differ from California Community Property Law.

For long married couples, post-marital agreements can help them find parity in their financial lives and help them set their expectations around their future, their estate planning, and how they want to provide for each other and their children (both of the marriage and from prior relationships) both in the event the marriage should end or if one spouse should die.

The best thing to do if you are considering a post-marital agreement is to find the right collaborative team to help you both have a productive conversation about how to best address your respective needs and concerns.


Lissa Rapoport is a family law attorney and mediator in Marin County.
http://www.collaborativepracticemarin.org/members/Rapoport
Photo credit: with thanks from rawpixel.com from pexels

Why, and When, Should We Create a Collaborative Pre-marital Agreement ("Pre-Nup")


               When couples marry in California, there are laws that automatically apply to their assets and income. For instance, income received as a result of either spouse’s labor, skill and efforts is community property and belongs to the marital partnership. Assets owned prior to marriage or received during marriage as a gift or inheritance is separate property unless it increases in value during the marriage due to either spouse’s efforts.

               These default rules can be changed in a premarital agreement. The process for creating such a contract is an important consideration. The relationship needs to be valued and the communication about financial topics facilitated to encourage open and heart felt discussions about the terms to be included. Instead of having a proposed premarital agreement prepared by one client’s attorney and delivered to the other client, in a collaborative process the couples and both attorneys work together to develop a Premarital Agreement. The process should be commenced well before the intended wedding date to assure the topics can be considered thoughtfully without any pressure related to timing.

               Collaborative practitioners begin the premarital agreement process with a meeting between the prospective spouses and drafting attorneys where we learn together about the clients’ personal and professional backgrounds, as well as their goals for their marriage as a couple and as individuals. Full disclosure of all assets, obligations and income is required regardless of process. During the meeting, we review each person’s financial information and ask questions to ensure understanding. A review of what California law provides is given so those rights and responsibilities are known. Then we identify topics to be included in the document and brainstorm options for solutions. After all possible options are identified, each is evaluated to determine viability and connection to the clients’ marital goals and interests. If consensus about the terms is reached, the attorneys will then prepare a draft agreement for review. If the couple needs time to further reflect on the options together, another meeting is scheduled to hear the results of this conversation. After the draft is read by all, there is a final discussion to confirm the document is understood and consistent with the couple’s intent.


Susan Stephens Coats is certified as a Specialist in Family Law by the State Bar of California Board of Legal Specialization.  http://www.collaborativepracticemarin.org/members/Coats


Photo Credit: Ann Buscho, Ph.D.


Do I Need a Premarital Agreement?

 

            A very frequent question I am asked in my practice is do I need premarital (or sometimes referred to as a Prenuptial) Agreement.  A premarital agreement can be important to someone for a variety of different reasons.  The first important aspect of deciding whether you want or need a premarital agreement, is to understand what such an agreement can accomplish and address.  A premarital agreement can address things like:

 

•           how you are going to treat assets and debts that each of you bring into a marriage (examples include real property, retirement assets, inheritance, student loans, support you pay for a prior relationship); 

 

•           how you want to treat assets your earn or are gifted to you during the marriage (this can include compensation, bonuses, stock option grants, inheritance, etc.);

 

•           how you are going to pay your day to day bills;

 

•           do you want to pay each other spousal support (or do you want to limit it in some way);

 

•           do you want to provide for each other in your estate plans;

 

•           do you want to make gifts to each other;

 

            A premarital agreement can be a very positive experience for a couple when it is approached openly and collaboratively.  The objective of a premarital agreement, in my view, should be to address both parties needs and concerns going into their marriage in a way that allows a couple to (1) start their lives together with a solid foundation of being able to talk to each other about difficult topics and (2) find their own solutions.  Often, people's needs and concerns arise from their past experiences (fears that arise from their parents bad divorce, their own bad divorce, or pressure from their families). 

 

            My feeling is that a premarital agreement should be something that is created together, addressing your respective needs and concerns, and reflecting who you are as individuals as well as who you want to be as a couple starting your lives together.  Such an agreement can help a couple set their expectations going into their marriage and allow them each to express how they visualize their marital partnership.

 

            If you decide you do want a premarital agreement, your next step would be to meet with a family law professional to talk about how to best go about creating a premarital agreement and the different processes and professionals you can utilize to help you.


Lissa Rapoport is a family law attorney in San Francisco and Marin County.  lrapoport@lpslaw.com

Photo Credit: Ann Buscho, Ph.D.




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CPM is a community of legal, mental health and financial professionals working together to create client-centered processes for resolving conflict.  We are located in Marin County, California. 

Why Collaborative Divorce?

“Divorce is never easy but the collaborative process made mine bearable.  I had more control and therefore less stress and anxiety because I had an active role.”

~JF

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