Getting married is an exciting time for couples, as it signifies the love you share for each other. Unfortunately, not all marriages have a fairytale ending. Though you and your spouse will likely do everything in your power to make it work, divorce may be the best option. When you or your partner are high net-worth individuals, creating a prenuptial agreement before you get married is a great way to protect your hard-earned assets. However, you must provide full financial disclosure to your partner before signing the agreement. Keep reading to learn more about this process and discover how Los Angeles prenuptial agreement attorneys can help you navigate the process.
Why Is Financial Disclosure Necessary?
When setting up a prenup, ensuring you share your finances with your partner is crucial. This ensures you and your soon-to-be spouse understand the financial status of each other. Unfortunately, many divorces are the result of monetary issues. Creating a prenuptial agreement and seeing your partner’s finances is a great way to protect you and your spouse.
California is a community property state, meaning any assets or properties incurred during the marriage will be split evenly between spouses if there is no prenuptial agreement. This means your spouse could be entitled to the inheritance you receive as a beneficiary if you place it in a joint bank account or use it to purchase a home. However, if you disclose that you could receive this inheritance and include it in your prenup, it protects it as your own property.
In short, financial disclosure guarantees transparency for both you and your spouse.
What Should I Include in My Financial Schedule?
When you and your spouse disclose your finances, you will provide each other with a financial schedule. This is an overview of all your finances. Your schedule should include the following:
- Your income over the past three years
- Business interest
- All assets, including collections and vehicles
- Any inheritance you may receive
- Real estate properties, complete with mortgages and market values
- Banking information
- Retriment accounts
These will need to be completed with detailed accounts of their values and any debt associated with each account. Similarly, you should include credit reports and insurance policies on different assets and properties.
What Happens if I Fail to Disclose?
If you don’t want your spouse to know about your investment accounts or credit card debt, you may want to omit this from your financial schedule. However, this can have adverse effects. If you fail to disclose your finances in full, you run the risk of invalidating your prenuptial agreement. This means you can end up losing more than the value of the assets you hid, as your assets will be subject to California’s community property distribution method.
When you and your to-be spouse are ready to create a prenuptial agreement, ensuring you reach out to an attorney is vital. At the Zitser Family Law Group, we understand how important your finances are to you. We can help look out for your best interests when you create a prenuptial agreement with your partner. Reach out today to connect with one of our seasoned attorneys to get started.