Splitting marital assets can be tricky during a California divorce, particularly when two divorcing individuals cannot agree on how to proceed with this. Property division can be even more complicated if two people own a family ranch or farm. Prenuptial agreements can be a huge help in divorce situations where high-value assets are at stake.
A prenup is a legal contract that two people enter into before getting married; the agreement spells out what will happen to certain assets in the event that the two become divorced. A prenup is recommended when one individual has more assets and wishes to protect these assets during a marital dissolution. It is also wise to create an agreement when previously made promises must be honored — for example, a commitment to an heir about owning a certain asset eventually.
A prenup lists both parties’ owned or claimed property as well as their debts. Regarding ownership of a farm, it is worth noting that, unless spelled out differently in a prenup, a farm during a divorce proceeding would be treated like a marital asset even if just one of the two parties brought it into their marriage. This is especially the case if bills related to the farm were paid from a jointly owned checking account.
A prenup offers the benefit of potentially reducing tension and internal conflict during a divorce. However, even if two people did not enter into such a contract before getting divorced, they can still try to use mediation to reach a mutually beneficial settlement involving property division. It is within both parties’ rights to fight for their fair share of assets in California.
Source: farmandranchguide.com, “Prenuptial agreements have mixed benefits for farm couples”, Michael Rosmann, March 18, 2015