What You Need to Know About the Sunset Clause in a California Prenuptial Agreement
The sunset clause allows prospective spouses to agree when their prenuptial agreement ends. Here’s everything you need to know about the sunset clause in a California prenuptial agreement.
A sunset clause will indicate the agreed-upon number of years that the prenuptial agreement will be in effect. If a couple decides to set their sunset clause at 20 years, for example, the terms they agreed upon will no longer be enforceable after 20 years of marriage. Couples have the autonomy to decide when their prenup will expire. Any financial concerns or reservations that either party had prior to marriage will hopefully be eased by the end of the sunset clause.
Related: Prenup vs Postnup in California: The Difference
Background Information on Prenuptial Agreements
Typically, parties with great amounts of property and assets are more likely to draft prenuptial agreements. Prenuptial agreements can be initiated to protect a party’s assets, especially if they are of great value, from being automatically split between spouses if a divorce were to occur. Prenuptial agreements begin with the process of dividing a couple’s assets, and their obligations and entitlements to each other prior to marriage, which demystifies interpretation of these factors if the couple decides to divorce.
Related: How to Get a Prenup in California: Prenuptial Agreements
Types of Sunset Clauses
In California, couples have the freedom to determine how many years their sunset clause will be, under the assumption that if they have been married for the agreed-upon amount of time, the terms in their prenuptial agreement will no longer apply. Traditional sunset clauses will allow the prenuptial agreement to expire after a predetermined number of years.
On the other hand, a phased sunset clause outlines how any changes to the agreement will evolve over time. When a couple decides to divorce, one party may need to pay alimony to the other due to the financial impact of their separation. The grounds for collecting alimony, and how much, will be determined in the prenuptial agreement. For example, the alimony one spouse pays to the other can either occur after 5 or 10 years of marriage – which can be a big difference based on their earnings or income. A phased sunset clause will detract portions of the prenuptial agreement over time. Instead of setting an end date in years for when the contract ends (as a traditional sunset clause does), a phased sunset clause will periodically alter, change, or void aspects of the prenuptial agreement as the couple’s marriage matures.
When deciding whether a traditional or phased sunset clause will better suit their upcoming marriage, couples can consider important life events that can impact their contract. For example, the contract can either end or portions can be redacted if the couple has a child, has been married for 15 years, or if any other milestones occur that may affect their relationship.
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If you have any more questions about the sunset clause in a California prenuptial agreement, contact us. One of our experienced family law attorneys can help form a prenuptial agreement that works for you and your partner. Get your free consultation with the right attorney today.