Fairy tale weddings don’t always guarantee fairy tale marriages. The story of some couples doesn’t end in “they lived happily ever after.” While you may not want to think about the probability of a divorce right when you plan to say “I do,” it is crucial to do yourself the favor of facing reality. Having a plan to protect your assets before and after marriage is imperative, just in case things go south. At the Los Angeles Divorce Lawyer, we can help you prepare a solid nuptial agreement before marriage or during the marriage. We can also provide invaluable legal aid during divorce, especially during the property and asset division phase.
California’s community property laws provide that couples in a marriage are partners. As such, they have equal ownership of both assets and debts acquired during their union. If your case involves property and asset division complexities, we can help you protect your income and separate property. We have an in-depth understanding of the divorce laws in Los Angeles, CA, and can ensure that your post-marriage financial status is well protected.
The Golden Standards of Protecting Your Property In The Event Of Divorce
In community property states like California, the law provides that each spouse is an equal member of the union. This means that either spouse is entitled to half the marital estates. Separate property is exempted during property division, allowing you to keep property obtained before marriage and even your inheritance.
In most cases, issues arise where there is no clear distinction between separate and community property. A divorce may leave you holding the short end of the stick and jeopardizing your financial future. The property includes houses, cars, and furniture, and it also consists of items of value such as cash, pension plans, bank accounts, and stocks.
There are two types of contracts that set the golden standard for protecting your assets in case of divorce. They include:
A Prenuptial Agreement
A prenuptial agreement is also known as a premarital agreement, and it is executed before entering a domestic partnership or marriage. The contract should contain a detailed list of the assets and debts owned by either party before the union. Your agreement can also touch on other issues such as child custody and alimony. You can outline your future obligations and rights if the marriage fails.
There are certain aspects of divorce you cannot avoid through a prenuptial agreement. For instance, you cannot contract away from obligations such as child support. This is because the laws provide that each child has a right to receiving support from either parent. Your contract cannot legally rob this right from your child.
A Postnuptial Agreement
This is yet another crucial legal tool you can use to protect your assets in case of divorce. Unlike the prenuptial agreement that is drafted before marriage, you can enter into a postnuptial agreement with your spouse when you are already married. The contract allows you to opt-out of the community property laws in California by:
- Waiving your rights to separate property
- Changing community property into separate property
For a postnuptial agreement to be deemed valid, you must act as a fiduciary of your spouse and the other way around. Both of you have to work in each other’s best interests and provide full disclosure of your assets and debts.
We can lend a hand if you need to protect your assets through marital agreements. Our team has unrivaled experience preparing marital agreements that can survive court scrutiny. We can also help you defend or challenge the validity of a pre or postnuptial contract during divorce proceedings.
For a marital agreement to be deemed valid in California, there should be no trace of:
- Coercion — Any type of marital agreement is only considered valid when it is implemented by both parties voluntarily. There should be no threats, manipulation, or undue influence that may prevail over a signer’s free will.
- Fraud — As aforementioned, it is necessary for spouses to act in good faith for marital agreements to work. Any deception about the contents of a contract and the rights being waived can invalidate an agreement.
- Procedural and fundamental unfairness — No court can validate a one-sided marital agreement. To protect the validity of your contract, both you and your spouse must be truthful, fair, and reasonable.
- Violation of community policy — The courts can also not enforce an agreement that infringes on public policy. For instance, no judge will violate a contract whose terms can be interpreted to encourage divorce.
Advantages and Disadvantages of Nuptial Agreements
There are various aspects of a marriage that a marital agreement can address. These aspects include:
- Management of future earnings
- Terms of assets possession
- Division and control of the property
The contract can also be helpful when you dissolve the marriage or upon the death of one of the spouses. If you wish to create such an agreement before the wedding or during your union, both of you must understand the expected pros and cons.
Let’s begin with the advantages of marital agreements:
Protects Your Pre-Marital Assets
A good agreement will highlight all the assets you own before marriage. This will make it easier to define assets obtained during your union. In case of divorce, you will have an easier time determining the community properties and ensuring they are divided equally.
Protect the Future Financial Stability of Your Kids
Your contract can define matters of property division and control upon divorce. This means that you can set aside the assets you want your children to inherit. Without this form of agreement, your spouse may end up receiving property you wanted your kids to possess.
Avoid Future Conflict
For any marital agreement to be deemed valid, both partners must be open and truthful about their assets and debts. Discussing these matters before a divorce reduces the risk of unwarranted future conflicts in the event of divorce. Once you and your spouse have signed the contract, it will be easier and faster to settle matters if you choose to terminate your marriage.
Assigns Debts and Liability
You may also use your contract to assign debt and establish your level of liability to your partner’s debts and vice versa. This will again streamline the process of distributing debts should your union go sour. With a marital agreement, you can avoid extended court proceedings and settle everything during negotiations. After all, the contract sets what to expect in case of divorce.
The disadvantages of marital agreements are:
Sense of Distrust
It’s not easy to bring up the idea of nuptial agreements without leaving a sense of distrust. Your spouse or spouse-to-be may feel as though you don’t trust them. A contract may also leave both of you more open to the probability of divorcing in the future.
Can Be a Trap
Sometimes, nuptial agreements create more problems, especially for the partner with lesser assets. The contract can be used as a control tool, trapping you into a marriage that is not necessarily working in your best interests.
Can Create Burdens
One inevitable aspect of life is change. Circumstances change over time, and this means that an agreement that seemed to work for you at first may turn into a burden in the future. In such a case, you will still be limited by the terms of the contract you signed.
Understanding How Property Division Works In California
Nine states uphold community property laws. California is on this list, meaning that it uses the same structure used in business partnerships to decide property division matters during a divorce. Both spouses are considered equal co-owners of assets acquired during a marriage.
The courts decide how property is to be divided between spouses in the event of divorce. While it is perfectly okay to divide your property informally, you have to turn to the courts to formalize your agreement. Before a judge signs off your contract, the assets and debts in question will still legally belong to both of you, irrespective of who controls them.
Property is classified into three groups. There are California laws that define how property and debts should be divided based on their classification.
Any property acquired before marriage or after divorce is classified as separate property. This property belongs to you and is exempted from the property division process. Other properties left out of the process include inheritance and gifts.
According to the California legislature, community property refers to all the assets acquired during a marriage within the state. If a union turns sour and divorce is inevitable, these assets should be split in two. Of course, you can opt out of California’s community property laws using nuptial agreements.
This type of property includes assets acquired or owned outside California before your relocation into the state. California laws provide that such property should also fall under community property, even if it is not classified as such.
Most people will want to know about property division before they consider divorce. The courts can intervene when couples cannot handle asset distribution, among other crucial terms of the divorce. However, it is possible to avoid court intervention if you can compromise and create a fair plan that works for both you and your spouse.
If you don’t have nuptial agreements before a divorce, it can be challenging to decide on matters of property division, parental responsibilities, and even spousal maintenance. Fortunately, a divorce attorney can provide invaluable assistance. The expert can represent you in or out of court and ensure your best interests and financial future is protected.
Tips for Protecting Your Most Important Assets During a Divorce
Community property laws ensure the equal division of property during divorce. With proper documentation, you can also keep assets you brought into the marriage or anything you received as a gift or inheritance.
Here are some essential tips to protect your assets during a divorce:
Keep Your Personal Property
Your valuables are separate property, and they are off-limits during property division. They include gifts given directly to you or passed down to you in the form of inheritance. Create a list of these items and take their photos. If possible, go a step further and obtain written proof of gifts or valuables handed down to you by friends or family members. Obtain as much info about an item as possible. The idea is to have adequate proof to ascertain that it remains with you even after a divorce.
It is also necessary to move your personal property to a different location, especially if you intend to move out of your matrimonial home. In case you remember something you left in the house, it is perfectly okay for you to go back and retrieve it.
If your spouse denies you entry or even changes the locks, you can lawfully hire a locksmith to help you access the property and retrieve your items. This move can only be illegal if the courts give your spouse exclusive ownership of your matrimonial home.
It is not enough to simply retain possessions that can secure your financial future. It is also necessary to know their status and determine whether your spouse placed any liens against them or used them as collateral to obtain loans.
Handle Property Division Professionally
During a divorce in California, either spouse should receive 50% of assets acquired during a marriage. A surefire way to ensure you are compensated fairly is to hire an appraiser to go over your valuable assets, including real estate, retirement plans, and joint businesses.
Depending on the type of business you own, it may make sense also to hire a forensic accountant. The professional can help interpret business records and place the correct value on your venture. A forensic accountant can also provide invaluable information about the business, ensuring that it’s easier for you and your spouse to act in each other’s best interests.
It is necessary to list down community property and note what you don’t want to replace. Both you and your spouse have equal rights to common assets within your home. List down and photograph what you want to keep and take photos of significant value items that your spouse will keep. These records can help to clear out misunderstandings when formalizing your divorce.
Acquire All Personal and Business Records
A simple way to protect your best interests and make your attorney’s work easier is to create copies of all vital personal and business records. These are essential documents that your lawyer can obtain with subpoenas, although it is faster and easier for you to just make your copies before leaving your matrimonial home.
These documents may include:
- Bank statements
- Income statements
- Real estate property deeds and titles
- Credit card statements
- Stock receipts
- Income tax returns
- Retirement account statements
Any documents allied with your assets or finances will be used during negotiations. Your attorney needs to know about them to protect your best interests and also detect marital fraud. For instance, if you have a joint business, you have a right to obtain vital business records. This will help you confirm that you are receiving the amount of profits or interests that you deserve. You can have your lawyer obtain these records for you, or you can legally acquire them in person from your spouse’s office.
In case you are in charge of running the joint business, you can avoid unwarranted squabbles by keeping your records as transparent as possible. For instance, avoid changing your billing practices and keep your business files available through attorney privilege, at least until your divorce is finalized.
Negotiate and Compromise To Get the Best Settlement
So, what happens when you and your spouse don’t want to share specific property, and it can also not be split into two? It’s simple; you merely need to note the value of a property and ensure it is compensated with other assets of equal value. Let your attorney know about the valuables you want to keep, such as your business or family home. The expert will represent you during negotiations and work on strategies to ensure you keep what you want.
Negotiations work best when both couples are willing to compromise. For instance, you could choose to let go of the family home and, in return, retain full ownership of your business. A competent attorney will ensure that the compromises you make are worth it in the long haul.
Confirm the Details of Your Nuptial Contracts
If you had entered a prenuptial or postnuptial contract with your spouse, this would be the ideal time to confirm the details of your agreement. Even though such agreements have numerous benefits, one of their most significant perks is defining property division matters during the divorce.
As long as a contract is legally enforceable, you can opt out of California’s community property laws. For instance, if the agreement shows that a specific asset belongs to you, it cannot be subject to division, even if it falls typically under community property.
Find a Los Angeles Divorce Lawyer Near Me
Divorce in Los Angeles, CA, is complex, and it may leave you suffering financial setbacks on top of your emotional stress and heartache. While a competent lawyer cannot protect your heart from breaking, he/she can defend your property and financial future. Contact the Los Angeles Divorce Lawyer before filing for divorce, and let us help you plan for your future. Whether yours is a complex and high asset case or you simply need to divide a few vital assets, we can provide the much-needed legal assistance. What makes us different from other law firms is our ability to focus on the needs of our clients with unwavering dedication. You can depend on us to provide invaluable legal counsel and advocate for your rights and best interests. Call us at 310-695-5212 to schedule a confidential consultation and take the first step towards protecting your property.