Los Angeles – Riverside – San Bernardino – Orange County - California
Why Prenuptial Agreements Are Important in Estate Planning
Because California is a community property state; a married couple may own both community property and separate property. A prenuptial agreement will clearly identify who owns the property, money, and assets owned by the partners prior to the marriage. If one of the partners to the marriage passes away, the legal rights of the survivor are dependent on the nature of the estate, whether it consists of community property or separate property.
Community property is the property, money, and assets obtained by one or both of the married partners through earnings during marriage. It also includes any separate property that is intentionally transmutted to be community property. Community property also includes any income generated from community property, e.g., rents, dividends, interest, etc.
Separate property is any property, money, and assets which were owned by a married partner before marriage and property obtained during marriage by inheritance or gift. Separate property also includes any income generated from separate property, including rents, dividends, interest, etc.
Helpful for Protecting Family Business Interests
Prenuptial agreements are often used when one of the partners to the pending marriage is a co-owner of a family business, and the partner/co-owner wants to make sure that if he or she would to pass away, the business interest would not be a community property asset.
Helpful for Second or Third Marriages
Couples who are entering into their second or third marriage often have children from prior marriages and relationships who they want to benefit in their estate plan, and also have significant separate property interests that they own coming into the marriage. The purpose of the second marriage may be primarily for care, comfort and society, and not for the combining of their estates.
Coordinated With the Estate Plan
Preparation of Living Trusts for married couples in California must always take into account what the estate consists of, and how the specific assets of the estate are distributed upon the death of the settlor. A prenuptial agreement helps to clearly identify the community property vs. the separate property, so that the legal rights of both the decedent and survivor are preserved.
Protect Your Rights and Assets
The early stages of planning are critical. Call me directly at 1-714-385-0044 to schedule a consultation or email me.
Dwight Edward Tompkins, Family Trusts Attorney
Serving: Maywood, Mission Viejo, Montebello, Newport Beach, Norwalk, Orange, OC, Paramount, Pico Rivera, Placentia, Los Angeles County, Orange County, Riverside County, San Bernardino County.