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When people are on their second or subsequent marriage, many times they have children from a prior relationship. Conflicts can arise regarding assets that were intended for the children and assets that were intended for the new spouse. Upon death, a spouse may have a claim in California to community property and also to a spousal share of the separate property. In order to properly protect your intent with your assets, the parties can enter into a prenuptial agreement with matching estate planning.
Prenuptial agreements can be extremely useful for couples marrying later in life and/or after accumulating assets and/or wealth. Many couples look at estate planning more seriously as they get older and try to plan appropriately to avoid probate and disputes among potential heirs. Without a prenuptial agreement, a surviving spouse may have the right to claim a percentage of the deceased spouse’s estate outright. This may be problematic. For example, if the deceased spouse has a business and wants the business to continue with his partners, a prenuptial agreement can protect this intent.
With a prenuptial agreement, the business can remain with the partners and the spouse can be protected through other assets and/or life insurance. However, without a prenuptial agreement, there is a possibility that the estate will be disputed in probate and the assets liquidated to cover the cost of probate. Moreover, a prenuptial agreement can potentially override a will or cause a case to be contested in probate if it does not match the provisions in the estate planning. Such confusion and conflict can be extremely costly. So, it is essential that the prenuptial agreement and estate planning provisions match.
The Uniform Premarital Agreement Act under California Family Code Sections 16000-1617 provide statutory requirements for prenuptial agreements in California. The above information regarding prenuptial agreements is intended only with regard to prenuptial agreements under California law.