At any point before or during the marriage, spouses may enter into a signed, written agreement regarding whether certain assets or debts are to be categorized as community or separate and how property would be divided in the event of a divorce.
These agreements usually overcome how a judge may customarily divide property if no agreement was in place.
An agreement that is entered into prior to the marriage is called a “Prenuptial” or “Premarital” agreement. A Premarital agreement takes effect on the date the parties are married and is usually designed to limit the accumulation of community assets and debts.
An agreement entered into during the marriage is a Marital Property Agreement and is sometimes known as a “Partition” or “Postnuptial” agreement. Very similar to a Premarital agreement, the parties to a Marital Property Agreement often agree to convert community property into the separate property of the parties, thereby “partitioning” the community property between the spouses.
Only if a divorce were to occur would these agreements come in to play.
Premarital agreements are rare for the majority of the population, primarily because they carry the stigma of divorce. A couple in love simply do not want to entertain such a horrible result.
We want every married couple to succeed. Unfortunately, the statistics are simply too high not to at least explore the purpose behind these types of agreements.
Emotional Commitment Versus Legal Entity
Couples should keep in mind that their love and commitment to each other is not determined by the status of the government-ruled legal entity created upon marriage. A marriage is a legal entity theoretically similar to creating a business entity. There are legal aspects that should be treated as such.
In other words, a couple who enter into a property agreement are not necessarily believing a divorce is in their future. Rather, the couple is controlling how the law will treat their property if the other spouse decides to dissolve the legal entity in the future.
Similar to insurance policies, we hope that we never need them. But prudent people know that a car accident–even one that is not their fault–is enough of a possibility to warrant a tool that can help make the event a little less traumatic.
Divorce is often one of life’s more traumatic events. For a divorce to happen, at least one of the spouses must choose it to happen. And the law does not force anyone to remain married. Therefore, each spouse must realize that, just like each originally chose to get married, that same free-will can be used to decided to get un-married. Pre-determining what is to happen is often better than fighting about these things in the middle of the trauma.
Even if you own nothing now, a property agreement can still be very helpful should the unthinkable happen. Attorney Vince Handler will help you evaluate the best course of action for you. Contact us today.