Top 5 Signs You Need a Postnuptial Agreement

1. You Received a Large Inheritance or Gift

Under California Family Code § 760, property acquired during marriage is presumed community property. But under California Family Code § 770, property acquired by gift or inheritance is separate property. The problem is that separate property can become community property if it is commingled with marital funds.

If you received a $200,000 inheritance and deposited it into the joint checking account, the presumption shifted. Your spouse can argue that the money became community property because it was mixed with marital funds. A postnuptial agreement can clarify that the inheritance remains your separate property regardless of where it is held.

This is especially important for military families. A service member may receive a VA disability lump sum or a reenlistment bonus that qualifies as separate property under federal law. But if the money goes into a joint account, the characterization becomes disputed. A postnuptial agreement removes the ambiguity.

2. You Started a Business During Marriage

Businesses started during marriage are community property under California law. Even if only one spouse runs the business, the other spouse owns half the community property interest. This creates problems when the business grows and the operating spouse wants to protect it from division.

A postnuptial agreement can define the business as separate property or establish a buyout formula if the marriage ends. It can also address intellectual property, goodwill, and future earnings. Without an agreement, the business must be valued and divided, which requires expensive forensic accounting and may force a sale.

We draft postnuptial agreements for business owners that protect the enterprise while providing fair compensation to the non operating spouse. The agreement specifies valuation methods, buyout terms, and payment schedules. This keeps the business intact and avoids litigation.

3. You Reconciled After a Separation

Couples who separate and reconcile often carry unresolved financial issues. One spouse may have opened a separate account during the separation. Debts may have accumulated. Property may have been acquired. The lines between community and separate property are blurred.

A postnuptial agreement draws a clear line. It defines what each spouse brought back into the marriage and what belongs to whom going forward. This is particularly useful for military couples who separated during a deployment and reconciled upon return. The agreement addresses the property and debts from the separation period and establishes rules for the future.

California courts respect postnuptial agreements that are entered into voluntarily, with full disclosure, and without coercion. The agreement must be in writing and signed by both parties. Each party should have independent counsel to avoid claims of undue influence.

4. You Want to Protect Children From a Previous Relationship

Blended families face unique property challenges. A parent may want to ensure that assets accumulated before the current marriage pass to children from a previous relationship. Without a postnuptial agreement, those assets may be divided as community property, leaving the children with less than the parent intended.

A postnuptial agreement can designate certain assets as separate property and specify that they pass to the children from the prior marriage. It can also address life insurance, retirement accounts, and real estate. This does not disinherit the current spouse. It simply clarifies what belongs to whom.

We see this issue frequently with retired service members who have children from a first marriage and a second spouse. The retired pay is community property with the current spouse, but the service member wants to ensure the children receive a share. A postnuptial agreement combined with an estate plan accomplishes this goal.

5. You Have Significantly Different Income Levels

When one spouse earns significantly more than the other, spousal support becomes a major issue if the marriage ends. California Family Code § 4320 lists the factors courts consider when setting support, including the earning capacity of each party and the standard of living during marriage. A postnuptial agreement can define support terms in advance.

This is not about avoiding support. It is about certainty. Both spouses know what to expect. The higher earner can plan financially. The lower earner has security. The agreement can include a waiver, a cap, or a specific formula based on years of marriage and income differential.

For military couples, the income gap may include BAH, special pays, and allowances that civilian courts do not always understand. A postnuptial agreement defines how military income is treated and what counts for support purposes. This prevents disputes later about whether flight pay or hazardous duty pay should be included.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney client relationship. Results vary based on specific circumstances, and past performance does not guarantee future outcomes.

Sources:

• Cornell Law School Legal Information Institute
• California Legislative Information