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How Can A Postnuptial Agreement Secure My Financial Investments?

How Can A Postnuptial Agreement Secure My Financial Investments?

Postnuptial Agreements generally afford couples the right to protect their assets under a legally binding document that describes how debts and assets will be divided if they get a divorce. Postnuptial agreements can make the divorce process more efficient by saving time and money. However, postnuptial contracts in California are only valid and enforceable if they comply with state marital agreements laws.

If you are married and thinking about protecting your assets if you and your spouse divorce, you might be wondering if an agreement can secure your financial investments. Depending on your circumstances, entering into a properly drafted and executed postnuptial agreement may provide you with financial security and protect your financial investments.

What Is A Postnuptial Agreement?

Postnuptial agreements are contracts that couples sign after they are married. As mentioned above, these agreements provide for divorce terms, including debt and asset division. Marital agreements may address debts and assets acquired before and during the marriage, including financial investments.

Couples sign postnuptial agreements for many reasons, including:

  • They planned to sign a marital agreement before marriage but did not follow through.
  • One spouse decides to take on significant financial risk in a new business venture or investment.
  • One spouse exhibits and exercises financially irresponsible behavior.
  • Unexpected financial circumstances arise after marriage, and couples agree that a marital agreement is appropriate.
  • If one or both spouses have children from a prior relationship.
  • To ensure that a spouse’s inheritance is defined and protected.
  • They wanted a marital agreement but didn’t want to discuss divorce terms while planning a wedding.
  • There is a significant change in one or both spouses’ financial situations after marriage.

What Is The Difference Between A Prenuptial And Postnuptial Agreement?

Prenuptial and postnuptial agreements address many of the same matters and are usually crafted to set forth divorce terms and sometimes for estate planning. Prenuptial agreements are signed by couples before they get married, while postnuptial contracts are executed by spouses who are already married.

Beyond the timing of when the contracts are signed, there are significant differences between prenuptial and postnuptial agreements in California. For example, California courts scrutinize postnuptial agreements more heavily, especially terms that limit one party’s right to spousal support.

Unlike premarital agreements, which are presumed to be valid and binding, agreements signed after marriage are presumed invalid. Because of this presumption, postnuptial agreements must be reviewed and approved by a California court before it is considered a valid and binding contract. A judge will only support a postnuptial contract that appears to be lawful and fair to both parties.

California Family Law And Fiduciary Duties

In California, married spouses are considered fiduciaries, which means that spouses owe each other a duty of good faith and fair dealing. Similar to fiduciary relationships in business matters, spouses are prohibited from taking unfair advantage of each other.

This duty requires both spouses to provide full disclosure of debts, assets, and business dealings before signing the marital contract. If it can be shown that one spouse failed to make full disclosure or otherwise breached his fiduciary duty before signing the agreement, a court may find the postnuptial agreement invalid and nonbinding.

Postnuptial Agreements And Financial Investments

Postnuptial agreements can address all types of separate and marital property, including real estate, bank accounts, 401ks, and other financial investments. If you do not have a marital agreement and make financial investments before or during your marriage, you may be required to divide and share those investments if you and your spouse divorce.

However, you can protect those financial investments by setting forth investment allocation terms in a marital agreement. In the same manner, if you are concerned about financial investment risks your spouse has taken on, you can use a postnuptial agreement to eliminate your potential liability for your spouse’s investment losses and debts.

Speak With A California Postnuptial Agreement Attorney

If you have questions about protecting your financial investments and other assets in a divorce, an experienced attorney can help. Contact the Law Offices of Bruce A. Mandel to speak with a California postnuptial agreement attorney at 424-250-9130 or submit an online form, and he will be in touch with you.

Bruce has represented clients in marital agreements and other family law matters for more than 30 years. He understands California’s postnuptial agreement laws and how to protect your assets and best interests. Follow his Facebook page to learn more about California family law and the legal services he provides.