People often choose someone to review their prenups who is closest to them. The best choice would be someone who is familiar with the ins and outs of prenups, as there are many. A prenup is a very serious document with important consequences and it’s essential to have it reviewed by someone who both writes them and more importantly, understands them. Reviewing a prenup involves not only reading it, but guiding the person who is asking you to review it so that the client is provided adequate and worthwhile counsel, and can make an informed choice.
It’s important to realize that what is not covered in a prenup, is something you are giving away. For example:
1. Any accounts that you cominlge;
2. Your retirement plan:3. Any income property your spouse contributes to (could be a payment, or a repair) called community efforts in managing separate property.4. Any property (real or financial accounts) you do not disclose:
5. Gifts made to the community jointly;
6. Property transfers to the other party; and
7. Deferred Compensation; and
8. Waiver of Rights on the death of a spouse.
If you forget to disclose assets, especially those outside the state or country, they could be declared community property on the basis offraud, as many people conveniently ‘forget’. There may be some issues your spouse wants you to enjoy, and those have to be understood, along with the consequences. If you file a joint tax return is that a sign the prenup is waived?
There are various issues to consider that one would not consider on a daily basis without a prenup. If, for example, your spouse helps you to repair your income property, he or she can state that they raised the value of the home, especially if you sold it. In today’s California housing market, a home will sell quickly due to a lack of inventory. You may sell it for $100,000 above asking and your spouse could claim those repairs she or he contributed made a difference and you could owe him or her.
These are just some of the factors to consider when signing a preunup. There are many many more. For example, in a prenup, many people are willing to leave ‘some’thing to the less wealthy spouse upon divorce. The question then becomes of how much is enough to survive until that person finds another job or source of income. Some people like to have a cliff-vesting schedule wherein the longer the marriage lasts, the more the person receives. There are many issues to consider as the elements of a prenup work both ways and by signing a prenup you are also controlling your own assets; perhaps not all of the controls you require are listed. These are some of the many things that affect a prenuptial review.