Premarital Agreements memorialize the financial circumstances of the parties prior to marriage so that, in the event of a divorce, there is no question as to what each party owned at the outset of the relationship and therefore what remains his or her property should the marriage end. Perhaps more important is that Premarital Agreements can also address whether or not California community property laws will be apply – in whole or in part- during the marriage. By making these decisions at the onset of a marriage, extensive litigation can often be prevented in the event of a dissolution and assets can be preserved.
Pre-marital agreements are often sought by couples who, for example, are entering a second marriage and want to memorialize their current assets or to limit their exposure to paying spousal support; by parties who are beneficiaries of trust funds or those who have received large inheritances; or by individuals of high net worth or business owners who want to ensure their separate assets are documented or remain their separate assets.
Both parties must have attorneys to represent them prior to signing a Premarital agreement. Sometimes one attorney will draft the Premarital agreement while another will serve as a reviewing attorney, but very often, many Premarital agreements are drafted with the assistance of a mediator, so that the parties jointly understand and agree to the terms initially, instead of trading drafts through their attorneys. It is still necessary for the parties to have legal advice from their own attorneys if a mediator is used in the process, as it is vital that clients have a thorough understanding of California law and the ways in which their Premarital agreement might differ from that law.