The Importance of Prenuptial Agreements in Second Marriages: Safeguarding Personal Assets
Prenuptial agreements often receive a bad rap, mainly due to misconceptions about them. They’re frequently portrayed in movies and television shows as a safeguard, protecting an older, wealthy person from a gold digger’s devious plans.
In reality, prenuptial agreements are an effective legal tool. In marriages where one or both spouses have been previously married, unique financial dynamics are at play. There may be significant personal assets that need protecting, especially if either spouse has children from their previous relationship.
Understanding Prenuptial Agreements
A prenuptial agreement is a legally binding contract that both parties sign before marriage. It outlines how assets, debts, and other financial responsibilities will be handled during the marriage and upon its termination, whether by death or divorce.
While the details will vary, a solid prenuptial plan will include:
- An inventory of what each spouse owns coming into the marriage
- How assets will be classified and divided if the marriage ends
- Who is liable for what premarital debts
- The terms for spousal support
- The protection of assets for children from a previous relationship, if any, or other beneficiaries
- Safeguards for business ownership or a professional practice
Why Second Marriages Need Extra Financial Protection
While many second marriages can last a lifetime, the statistics show a sobering reality. 50% of first marriages end in divorce, compared to a 60-70% divorce rate for second marriages.
When you remarry, it’s usually not just two people joining lives. Almost 40% of American families are blended, meaning there is at least one step-parent relationship. It’s essential to ensure that each spouse’s biological children inherit certain family assets. A prenuptial agreement protects the children’s inheritance while the couple builds their life together.
People getting married for the second time have typically established some wealth, such as:
- A home with equity
- Retirement accounts built over decades
- Valuable collections or family heirlooms
- Business interests
- Investment portfolios
These assets represent years of hard work. A prenuptial agreement ensures that they remain separate and don’t become subject to California’s community property laws.
Second marriages also involve ongoing commitments from previous relationships, including:
- Spousal support
- Child support
- Shared custody expenses
- College funding plans
A prenuptial agreement provides clarification regarding these responsibilities so they don’t become a source of conflict during the marriage.
California’s Community Property Laws
California is a community property state, which means most assets acquired during the marriage are owned equally by both spouses. This includes:
- Income earned by either spouse
- Property purchased with marital income
- Contributions made to a retirement plan during the marriage
- Any business growth that occurred after the wedding
Without a prenuptial agreement, your spouse could claim rights to half of everything you received during your marriage. This could be problematic if:
- You own a business that experiences growth during the marriage
- You receive an inheritance that you intend to pass to your children
- You contribute to your retirement using separate property funds
- You make improvements to a separate property using community funds
A valid prenuptial agreement can override California’s community property laws. You and your spouse can agree to keep certain assets separate during the marriage, establish your own property division rules if you divorce, and protect business interests from community property claims.
Taking Action to Protect Your Finances and Your Family’s Future
Prenuptial agreements are particularly crucial for second marriages, given California’s community property laws. A well-crafted agreement can provide peace of mind for you, your spouse, and your families. Our attorneys at Lonich Patton Ehrlich Policastri have the experience you need to ensure your prenuptial agreement meets your needs and complies with California’s Uniform Premarital Agreement Act.
Contact us at 408-553-0801 to schedule your free consultation.
Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
Michael Lonich
Specializing in Divorce and Estate Planning, I am San Jose Attorney, Michael E. Lonich; and I have been battling for client’s rights for nearly 40 years. When focusing on divorce, child custody, and related matters, I know all too well the emotional and financial toll divorce has on clients. Integrity, common sense, and a passion for what I do which guarantee the best possible results for my clients. Resolution of family law issues requires an attorney able to navigate the myriad legal and emotional issues presented in cases. Financial issues, child custody, domestic violence, valuation of property, analysis of RSUs, hidden assets, spousal and child support, all may require trial, mediation, or a collaborative effort with the parties. Regardless, each client gets the individualized attention they require. Every family law case is unique, we partner with you to develop a comprehensive approach to get the best results.
