At the end of May, actress Amber Heard filed for divorce from Johnny Depp. As both of them are well-paid Hollywood actors, the amount of money to be divided between them is immense, with Johnny Depp’s net worth estimated to be nearly $400 million. Amber Heard and Johnny Depp reportedly have no prenuptial agreement.
Because California is a community property state, assets in a divorce will be divided in half. The two were married in 2015, so their marriage is fairly new, but Depp may end up paying considerably more of his assets because of the lack of a marital agreement. Depp, having been in many more movies than Heard, as he is 22 years older, has accumulated a much higher level of assets than his spouse.
What Are the Different Types of Marital Agreements?
While California family courts have a general set of rules that apply in a divorce and property division, marital agreements are often given special consideration by the court and, if they are fair, will often control the outcome of a family court proceeding. The common purpose of most marital agreements is to prevent the application of California’s community property laws when a divorce or other event of dissolution happens.
Family Code 850 authorizes couples to exchange property through a marital agreement. While marital agreements are given a lot of deference, public policy considerations relating to marriage, divorce, or child welfare may overrule an agreement. It is always a good idea to place any marital agreement, no matter where the agreement occurs in the process of marriage, in writing. Sometimes a court will overrule a marital agreement because it contains provisions that are illegal, unfair, or dangerous to an individual who is a child.
Also known as prenuptial agreements, these are agreements that both spouses make in anticipation of the marriage. Generally, these agreements are not finalized until the marriage actually takes place. Prenuptial agreements can indicate how property will be divided at divorce or death. These types of agreements can also set how spousal support will be calculated. If you are getting married, and want to either protect the wealth you already have obtained in your life or protect what you may earn during your marriage, these types of agreements can help.
California law does not require an attorney to review these agreements, but it is always a good idea to have an attorney look over any agreement before you sign it.
Spouses can make agreements while living together as a married couple, even if they are not planning on filing for separation or divorce. During marriage, each spouse owes a fiduciary duty, or confidential relationship, to the other spouse. This means that each spouse must deal with the other in the highest good faith and fair dealing. Prenuptial agreements do not have this same fiduciary duty. The marital fiduciary duty requires each spouse to fully disclose any and all information that relates to the agreement. If the marital agreement involves any rights after the death of the spouse, the agreement must comply with California Probate Code. Additionally, if the agreement deals with any pension benefits, the agreement will also have to be in compliance with any pertinent federal laws. Both the Probate Code and federal pension laws are very complicated, and can add much complexity to marital agreements.
Separation agreements can be one step in the process of ending a marriage. These agreements are made while the couple is still married but is contemplating a separation or a divorce. Like marital agreements, these types of agreements will also carry a fiduciary duty because the couple is not yet legally separated or divorce generally at the time of the drafting of the agreements.
While these types of agreements are less common, they are still used by some couples in California. Reconciliation agreements are made in contemplation of resuming a marital relationship after a brief period of separation. A reconciliation agreement that settles any pending marital litigation can also be referred to as a settlement agreement.
There are other types of agreements that spouses can make that are not listed above that are less common, but still allowable under California law.
California Law on Marital Agreements
California has a specific statute related to premarital agreements. The law allows two individuals to contract regarding the rights and obligations of each spouse, the rights of each spouse to buy and sell property, how property will be divided on death or divorce, instructions for making a will, calculating benefits of a life insurance policy, and spousal support. That list is not exhaustive of what can appear in a marital agreement, but shows how a well-thought-out marital agreement can save the parties a lot of time and trouble if something goes wrong later on. If the parties agree that a term is fair, there is a high likelihood that a court will agree.
Why Is a Marital Agreement a Good Idea?
While it may be a sensitive subject to approach with someone who is soon to be your spouse, establishing a marital agreement is always a good idea. Many see prenuptial agreements as documents that are unromantic or documents that are only prepared for an impending divorce, but this is not the case. Many are prepared to cover not only the possibility of divorce but also death. Prenuptial agreements can also settle any financial issues prior to marriage before the arise during the course of your relationship
A well-drafted marital agreement can prevent many headaches later in life, even if you have no intentions or plans of ever getting a divorce.