Marriage is beautiful. It’s a way to have your commitment recognized by the world. But marriage is more than a public declaration of your love, it’s something far better than that. Marriage--at least the official kind--is also a legally binding contract. And this contract creates certain rights and obligations between the parties. Like any contract, it’s worth reading before signing on the dotted line. We’ll explore a few of the basic challenges that accompany the signing of a marriage contract, before considering a possible solution to those challenges.
Marriage As A Legal Contract
California Family Code Article 720 states: “[s]pouses contract toward each other obligations of mutual respect, fidelity, and support.” While seemingly vague, California jurisprudence has developed the idea of what constitutes “mutual respect, fidelity, and support.” These rights and restrictions are generally understood to require spouses to assist one another in sickness and in health, and to refrain from abuse and infidelity (cheating).
Additionally, Articles 721, 750 through 755, and 760 create the California community property regime. What is a community property regime? Well, this means that once you are married your spouse has an equal share in everything you buy and in every dollar that you earn. This does not apply to the property you owned before the marriage, although it might apply to any rents, profits, or other benefits generated by your pre-existing separate property, if those benefits are generated during the lifetime of the marriage.
Furthermore, in certain circumstances your spouse might obtain a half-interest in an increase in the value of your separate property. So even if you had a house bought and paid for before entering into the marriage, should that house’s value increase significantly your spouse might have a claim to ownership of half of that increase. Thus, if the house was worth $500,000 when you got married, and it increases to $1,000,000 over the lifetime of your relationship, your spouse would be entitled to $250,000 of the $500,000 increase in value.
During the marriage, half of your paycheck belongs to your spouse. Half of any automobile, house, or other property purchased would also belong to your spouse. The money in your bank account from before the marriage would be yours, but half of the interest generated by that money might belong to your spouse. Likewise, a house purchased before marriage would belong to you--but half of any rent generated from that property would go to your spouse once the community property regime has been instituted (i.e., immediately upon marriage).
Also, just as a note of interest, a gift given specifically to one spouse by name, or property transferred to a specific spouse because of a succession, will be considered the separate property of the receiving spouse despite the existence of the marital regime--though still subject to the rules mentioned above.
Although marriage is a contract, it is a contract largely created by law--and not by the people entering into the contract. Fortunately, because it is a contract, certain aspects of it may be changed by the mutual consent of the contracting parties--in this case, you and your better half. In summary, marriage is a contract that requires those participating to share virtually everything they have, but because it is a contract this requirement may be altered by agreement.
The Prenuptial Agreement
A prenuptial agreement is another type of contract that you may enter into that can alter or add to the default marriage regime as defined by California law. The Uniform Prenuptial Agreement Act (UPAA) has applied in California since 1986. This act requires the full disclosure of both parties financial situation before the signing of a prenuptial agreement, and further requires a waiting period of seven days between the presentment of the agreement and the parties ability to give the agreement legal effect.
But if the parties disclose their finances and wait the seven days, they may enter into a prenuptial agreement that can--depending on how it is designed--significantly effect everything we’ve explained so far.
A properly executed prenuptial agreement can reject or alter the community property regime. The contracting parties could reserve their rights as to all of their property, or to specific aspects of their property. A spouse might agree to a community property regime that includes only wages, and excludes rental payments or investment dividends. There is any number of ways to alter the regime, or abolish it entirely for those with a valid prenup.
However, a prenuptial agreement cannot effect a court’s ability to determine anything related to any minor children born of the marriage. A prenup cannot dictate who will have custody, or visitation, or how much child support might be, in the event of a divorce. All those things are in the exclusive ambit of the trial court.
So, if you are concerned about a possible future separation and you have assets you would like to protect, or you simply feel more comfortable leading a separate financial life from that of your spouse, be sure to consult a prenuptial agreement expert before getting married.