The Protection of Future Assets in California Prenuptial Agreements
The division of assets is specific in states. Here’s what to know about how California prenups protect future assets.
California community property law evenly divides all assets acquired during a marriage between both spouses. A California prenuptial agreement can protect a spouse’s future assets if the contract defines which assets will belong to each spouse.
What is a prenuptial agreement?
A prenuptial agreement (also referred to as a “premarital agreement” or “prenup”) is a legal contract outlining a couple’s properties and finances in the case of a divorce.
Intended spouse(s) with large amounts of wealth or owning a business may seek a prenuptial agreement. Even without pre-acquired wealth or businesses, prenuptial agreements help protect assets under the couple’s agreed terms. A couple whose personal preferences do not align with their state of residency’s divorce laws may seek a prenup.
Related: How to Get a Prenup in California: Prenuptial Agreements
What information about assets can be found in a California prenuptial agreement?
Each state has different rules regarding prenuptial agreements. Under California’s Uniform Premarital Agreement Act (UPAA), a California prenup can outline:
- Income
- Debts
- Real estate
- Present assets
- Future assets
Couples have complete control over asset division when drafting a prenup, but should consult with family/divorce lawyers to ensure the agreement follows California UPAA guidelines.
Related: What to Include in a California Prenuptial Agreement
California as a Community Property State
California is one of nine community property states dividing a couple’s marital assets equally after a divorce. The other 41 states are equitable division states in which a court divides a couple’s marital assets according to what a judge deems fair.
California law considers a divorcing spouse entitled to 50% of money accumulated after marriage. Prenuptial agreements avoid the equal division of marital assets because couples can specifically outline how much each party will receive.
Protecting Future Assets in California Prenuptial Agreements
Couples seeking to protect future assets may distinguish community and separate property in a prenup. Marital property refers to all assets a couple acquired during the marriage. Separate property refers to all assets a couple either acquired before marriage or will individually own after marriage.
Defining future assets as separate property can guarantee a divorced spouse will not gain an ex-spouse’s future assets. A California judge must first recognize a spouse’s future asset and which spouse the future asset will belong to. Otherwise, the judge may assume the future asset will belong to both parties.
For example, a spouse who opens a business during marriage and predicts the business will succeed can define the business as separate property. Should the couple divorce, a California prenup may completely protect future income from the spouse’s business.
Couples can also transmute marital properties (such as a house) to separate properties. Specifying a house will belong to one spouse after divorce helps ensure California law will not automatically divide the house between both parties.
FAQs About Protection of Future Assets in California Prenuptial Agreements
Can a California prenuptial agreement be verbal?
No, a California prenuptial agreement must be a written contract.
Will my inheritance be protected in a California prenup?
A California prenup will protect a person’s inheritance defined as separate property.
Can the future of my children be protected in a California prenup?
No — anything related to the future of a child cannot be included in a California prenuptial agreement.
Related: Can a Prenuptial Agreement Regulate Child Support in California?
Contact Us
If you or a loved one would like to know more about how California prenups protect future assets, get your free consultation with one of our California family law attorneys today!