A Revocable Trust is not a substitute for a Pre or Postmarital Agreement

A Revocable Trust is not a substitute for a Pre or  Postmarital Agreement

When spouses comingle assets, it makes it easier to contend during a later divorce that the character has been changed from one spouse’s separate property to the community property of both spouses. If one spouse owns separate property, he or she can set up his or her own trust and only put separate property assets into it. In this way, separate property assets and community property assets are not comingled.

But creating and funding such a trust does not do away with the need for a pre or post marital agreement. The pre marital agreement would be entered into before marriage and the post marital agreement would be entered into after marriage.

Such an agreement can say that the spouses have not entered into any prior oral agreements and they will not subsequently enter into any oral agreements. It can attach lists of each spouse’s separate property and it can say that each spouse waives any claims against the other spouse’s separate property. It can limit the community property aspect of a business that one spouse has been active in to that spouse’s pay-check earnings and can state that the community will not acquire an interest in the goodwill of the business. Subject to limitations contained in  each state’s laws, the agreement can deal with spousal support and child support issues.

The strongest agreement is one in which each party has his or her own attorney and in which that attorney signs an attorney certification that the client has been counseled on the effect of the agreement. Since the negotiation of such an agreement can break down, it is advisable in the case of  pre-marital agreements that negotiations  be started and concluded far enough in advance of the  wedding date to allow for cancellation of the wedding  should irreconcilable differences arise.

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About randyspiro

I am a super lawyer in California with dual specialization in Estate Planning and Taxation.
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