By Hossein Berenji, Berenji Divorce & Family Law Group

Much of my work is family law litigation, and in divorce cases a surprising amount of the fighting comes down to questions a well-drafted marital agreement would have answered years earlier: Is the business separate or community? Who manages the rental properties? Does the spouse who put the other through medical school get anything back for it?

I’ve also seen agreements that were signed in good faith, sat in a drawer for years, and then fell apart the moment someone challenged them because of how they were drafted, disclosed, or signed.

This guide is for people considering a prenup or postnup in California, and for people who already have one and want to know whether it will hold up.

What is the difference between a prenup and a postnup in California?

A prenuptial agreement (California law calls it a “premarital agreement”) is signed before the wedding and becomes effective on marriage. It is governed by the Uniform Premarital Agreement Act, Family Code §§1600–1617.

A postnuptial agreement is signed after the wedding. It is judged under the rules for transactions between spouses, which are in some ways stricter, because married spouses owe each other fiduciary duties.

Both let a couple replace some of California’s default community property rules with terms of their own choosing.

Why would a couple want one?

California is a community property state. Generally, what either spouse acquires during marriage belongs equally to both, and what each owned before marriage, or inherits, stays separate. In practice, it rarely stays that simple.

A marital agreement is especially valuable when:

  • One spouse owns a business or professional practice. Even a business started before marriage can acquire a community interest in its growth.
  • One spouse brings significant assets, such as real estate, investments, stock options, or family wealth.
  • There are children from a prior relationship, or an expected inheritance or family trust to protect.
  • One spouse is entering a long professional training period, such as medicine or law.
  • The couple wants to set expectations about spousal support in the case of a future split, instead of leaving it entirely to a court.

There is also a less-discussed reason that comes up often in litigation: control. In many high-asset divorces, the fight is less about what the assets are worth and more about who gets to run them. I have had cases where a spouse who had managed a portfolio of rental buildings for years could not understand why the other spouse wanted to take their share and manage it themselves. His position was, “I’ll handle everything and send you a check every month.” Hers was, “I don’t want to be handed a check like a child, especially from someone I’m no longer with. I want to control my own property.”

Neither position is unreasonable. But when that conversation happens for the first time in the middle of a divorce, it gets litigated, and it gets expensive. A marital agreement lets a couple have it calmly, while they still like each other, and write down the answer.

What can a prenup cover, and what can’t it?

Under Family Code §1612, a prenup can cover nearly any property issue: who owns what, how earnings and business growth are treated, how mixed accounts are traced, who manages and controls specific assets, how property is divided on divorce or death, and, within limits, spousal support.

It cannot:

  • Limit child support. Under §1612(b), any provision that adversely affects a child’s right to support is unenforceable.
  • Decide custody. Custody is based on the child’s best interests at the time of the divorce, not on an agreement made years earlier.
  • Penalize “fault.” California is a no-fault state. In Diosdado v. Diosdado (2002) 97 Cal.App.4th 470, the court refused to enforce an agreement requiring a spouse to pay damages for infidelity.
  • Encourage divorce. Terms that give one spouse a strong financial incentive to end the marriage may not be enforced.

What makes a California prenup enforceable?

Most challenges to prenups are not about the terms. They’re about the process.

It must be in writing and signed by both parties (Family Code §1611).

It must be signed voluntarily. After In re Marriage of Bonds (2000) 24 Cal.4th 1, the Legislature added Family Code §1615(c). For agreements signed after January 1, 2002, a prenup is deemed involuntary unless the court finds all of the following:

  1. The challenging party had independent counsel, or expressly waived counsel in a separate written document after being advised to get one.
  2. At least seven calendar days passed between when that party received the final agreement and was advised to seek counsel, and when they signed.
  3. If unrepresented, they were fully informed in writing, in a language they are proficient in, of the agreement’s terms and the rights they were giving up, and signed an acknowledgment saying so.
  4. There was no duress, fraud, undue influence, or lack of capacity.

The seven-day rule trips people up most. It runs from the final version, so a last-minute revision can restart the clock. Start months before the wedding, not weeks.

It must not be unconscionable without proper disclosure. Under §1615(a)(2), an agreement that was unconscionable when signed is unenforceable if the challenging party lacked full financial disclosure, did not waive it in writing, and could not reasonably have known the other party’s finances. A lopsided agreement signed in the dark is in serious trouble.

Can a prenup waive spousal support?

Yes, with limits. In re Marriage of Pendleton & Fireman (2000) 24 Cal.4th 39 held that support waivers are not automatically against public policy. But under Family Code §1612(c), a spousal support provision is unenforceable if the party it is enforced against did not have independent counsel when signing, or if it is unconscionable at the time of enforcement.

If your agreement touches spousal support, the other party needs their own lawyer. And the court judges fairness at the time of the divorce: a waiver that seemed reasonable between two working professionals may look very different after a twenty-year marriage in which one spouse stayed home to raise children.

For how support is calculated without an agreement, see How Spousal Support Is Calculated for Business Owners, Executives & Self-Employed Spouses.

Why does financial disclosure matter so much?

Beyond the legal requirements, there is a practical reason. In my litigation practice, one of the clearest predictors of how hard and expensive a divorce will be is whether the less-involved spouse knows where the money is. When a client can tell me which banks, accountants, business partners, and properties are involved, we move quickly. When they have no idea, we have to find out through formal discovery, often against a spouse putting up roadblocks at every turn.

A properly done prenup or postnup forces that transparency up front. Each party attaches a schedule of assets, debts, and income, which becomes a roadmap years later. If you are the less-wealthy party, the disclosure may be the most valuable part of the agreement for you.

How are postnuptial agreements different?

Postnups are enforceable in California, but the rules are tougher.

Fiduciary duty. Under Family Code §721, spouses owe each other the highest good faith and fair dealing and may not take unfair advantage of one another.

Presumed undue influence. When a postnup favors one spouse, courts presume undue influence, and that spouse must prove the other signed freely and with full knowledge (In re Marriage of Haines (1995) 33 Cal.App.4th 277).

Transmutation rules. Changing property from community to separate, or the reverse, requires a writing with an express declaration of the change by the spouse whose interest is harmed (Family Code §852; Estate of MacDonald (1990) 51 Cal.3d 262). In re Marriage of Valli (2014) 58 Cal.4th 1396 confirmed these rules apply even to property bought from a third party. Putting title in one name is often not enough.

Postnups commonly come up when a spouse starts or buys a business, receives a significant inheritance, reconciles after a separation, or simply never got around to a prenup.

Is a prenup signed in another state or country valid in California?

Often, yes. A prenup can specify which state’s law governs it (Family Code §1612(a)(6)), and California courts generally respect agreements made elsewhere. But a California court may still refuse terms that conflict with California public policy, such as the spousal support limits in §1612(c). If you moved here with an existing agreement, especially one drafted abroad or in another language, have it reviewed in California.

What should business owners address?

If you owned a business before marriage and keep working in it, the community can acquire an interest in its growth, because your labor during marriage is a community asset. Courts generally use one of two approaches:

  • Pereira, used when growth is mainly due to the owner’s efforts: the separate property gets a fair return on its value at marriage, and the rest of the growth is community.
  • Van Camp, used when growth is mainly due to the business itself or the market: the community gets the reasonable value of the owner’s services, less what the family already received, and the rest stays separate.

A simplified illustration. A company worth $2 million at the wedding is worth $10 million eight years later, largely because of the founder’s work. Under Pereira with a 10% simple annual return, about $3.6 million is separate and roughly $6.4 million could be community, half of which could go to the other spouse. (This is a hypothetical. Real cases involve competing valuations and disputes over which approach applies.)

An agreement can take that fight off the table by defining how growth is treated, how and when the business is valued, and who controls it. See also our Business Owner’s Guide to Divorce and High Net-Worth Divorce Guide.

Can a prenup protect my rental properties and real estate?

Yes. Under Family Code §770, property you owned before marriage stays separate, and so do its rents and profits. But if community income pays the mortgage, the community can acquire a share under the Moore/Marsden formula (In re Marriage of Moore (1980) 28 Cal.3d 366; In re Marriage of Marsden (1982) 130 Cal.App.3d 426). Substantial time spent managing the properties during marriage can also create a community claim to part of the growth.

An agreement can settle whether rents stay separate, how mortgage payments are treated, and whether appreciation is shared. It can also say who manages the properties, which, as described above, is often what drives the fight.

What happens if I put separate money into our family home?

If a house bought during marriage is titled jointly, it is presumed community property (Family Code §2581), even if one spouse paid the entire down payment from premarital savings or an inheritance.

That spouse can usually get the traceable contribution back under Family Code §2640, but only the amount put in. There is no interest and no share of appreciation. If you contributed $1 million to a home that is now worth three times what you paid, the growth on your money is generally split equally.

A prenup or postnup can change that result, for example by giving the contributing spouse a proportional share of appreciation.

How are stock options, RSUs, and other equity compensation treated?

Equity granted during marriage, even if it vests after separation, is often partly community property, divided by a time-based formula (In re Marriage of Hug (1984) 154 Cal.App.3d 780; In re Marriage of Nelson (1986) 177 Cal.App.3d 150). For executives, these awards can be worth more than everything else combined.

An agreement can define in advance which grants are separate and how unvested awards will be split.

Does my trust protect my assets, or do I still need a prenup?

Usually not. A revocable living trust is an estate planning tool and does not change whether property is separate or community. Inherited or trust assets generally start out separate, but once they are mixed with marital money or used to buy joint assets, they can lose that protection.

The agreement defines what stays separate; the estate plan carries out what happens at death. The two should work together.

What about a spouse who supports the other through professional school?

This can be one of the most emotionally charged situations in a divorce: one spouse supports the family through the other’s medical school or residency, and the marriage ends just as the high earnings begin.

Family Code §2641 allows the community to be reimbursed, with interest, for community funds spent on that education, but not a share of future earnings. A marital agreement lets a couple decide this in advance.

What are the most common mistakes that get prenups thrown out?

  • Signing too close to the wedding, or changing the final draft and restarting the seven-day clock.
  • One lawyer “for both of us,” or no lawyer for the less-wealthy spouse, especially with a support waiver.
  • Incomplete disclosure of a business interest, trust, foreign asset, or significant debt.
  • Downloaded templates that don’t meet California’s requirements.
  • Not living by the agreement: commingling “separate” accounts or putting separate funds into joint property.
  • Assuming a trust, an LLC, or keeping property in one name protects it without a written agreement.
  • For postnups, no paper trail showing the process was fair.

What happens if my prenup is challenged?

The court often decides the agreement’s validity first, in a separate trial. The evidence that matters most is the process: when drafts were exchanged, what was disclosed, and who represented whom.

An agreement can also be amended or revoked after marriage, but only in a writing signed by both spouses (Family Code §1614), and that amendment is subject to the same fiduciary rules as a postnup.

If you want to enforce or challenge an agreement, involve a family law litigator early.

  • A Business Owner’s Guide to Divorce
  • High Net-Worth Divorce Guide
  • How Spousal Support Is Calculated for Business Owners, Executives & Self-Employed Spouses
  • A California Divorce Preparation & Strategy Guide

If you are considering a prenuptial or postnuptial agreement, or need to enforce or challenge an existing one, contact Berenji Divorce & Family Law Group to schedule a consultation with our Los Angeles and Beverly Hills family law attorneys.

This guide provides general information about California law and is not legal advice. Every situation is different, and the law changes. Consult a qualified California family law attorney about your specific circumstances.