Divorcing without a prenuptial agreement
A prenuptial agreement is a contract between two people who plan to marry. It typically outlines each party’s assets and liabilities and determines the property division if the couple divorces down the road. Prenups are often used in high-asset marriages, where one or both parties have considerable wealth they wish to protect. However, anyone entering into a marriage can sign a prenup.
The problem is that no one wants to think about divorce when they’re getting married, especially when it comes to drawing up a prenup. People often think of prenuptial agreements as unromantic. Some even consider it a bad omen for the couple about to be married. What happens, then, if you and your spouse decide to divorce and you do not have a prenup in place?
Dividing up assets without a prenup
The state of California is a community property state. This means that if there is no prenup in place, the law mandates that all community property is divided equally upon divorce without a prenuptial agreement. This applies to any assets acquired or purchased, along with any debts accumulated during the marriage. However, there are a few exceptions.
- Gifts or inheritances received during the marriage are exempt.
- A spouse who has paid for their partner’s education or job training may be reimbursed.
- Income earned before the marriage occurred is usually exempt.
- The court has the authority to modify the division of assets to achieve a fairer outcome if one spouse is proven to have concealed assets from the other spouse.
Other than the examples above, the majority of property and assets accumulated during the marriage will be divided 50/50. This includes every paycheck you receive, any investments you establish (such as a 401(k)) and your house. This also means that if you initiate a business venture while married, your spouse is legally entitled to a 50% share.
Because of the laws and exceptions involved in divorcing in a community property state, it makes good sense to seek assistance with your divorce.