When a couple with significant wealth divorces, a prenuptial agreement can play a key role in dividing assets. In California, prenups are legally binding if properly executed. However, there are limits to what they can control.
Below are some of the key ways that prenuptial agreements may impact a high-asset divorce.
California and community property
California law generally treats all property acquired during a marriage as community property. This means it is split 50/50 in a divorce. A valid prenuptial agreement can override this rule, allowing spouses to define which assets will remain separate. This is especially useful when one or both spouses bring significant wealth into the marriage.
For example, a prenup can state that a business owned by one spouse before marriage will remain their separate property, even if its value increases during the marriage. It can also clarify how income, real estate or investments will be treated.
Limits on what a prenup can control
There are restrictions on what a prenuptial agreement can include. In California, a prenup cannot decide child custody or child support. These issues must be resolved based on the child’s best interests during the divorce.
Spousal support (alimony) can be addressed in a prenup, but any waiver or limit must be fair. The court may refuse to enforce spousal support clauses if they are unconscionable or if the spouse was not fully aware of what they were agreeing to.
Prenups have strict requirements
To be valid in California, a prenup must be in writing, voluntarily signed and not involve coercion. Each party should have access to legal guidance, and full financial disclosure is required. The agreement must also be signed at least seven days before the wedding to be enforceable.
Before signing a prenup, it’s important to have as much accurate legal information as possible.