Prenups in Community Property States 

Jul 13, 2023 | Prenuptial Agreements

If you live in one of the nine community property states, should you get a prenup? Well, there are definitely some advantages to getting a prenup in a community property state, namely, not having your property split 50/50 automatically. That’s right, with a prenup, you can override the community property’s state laws that divide up your stuff 50/50.

 

What is a Prenup? 

A prenuptial agreement (i.e., a prenup) is a contract between future spouses that predetermines certain issues like property division, alimony, and debt. You can also add clauses about things like confidentiality, social media, pets, insurance, and more. A prenup is also an emotional contract. It lays the groundwork for marital expectations, boundaries, and facilitates deep communication. 

 

What is a Community Property State? 

In the United States, there are two different legal frameworks for dividing up property without a prenup: community property and equitable distribution. The majority of states are equitable distribution states, while nine states are community property states. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In community property states, the general principle is that assets acquired during a marriage are split equally (50/50) between spouses in the event of a divorce.

The term “community property” refers to any property accumulated during the marriage, while “separate property” refers to any property acquired before the marriage. To illustrate, let’s consider a scenario where one spouse owned a boat prior to getting married and then bought a home during the marriage. Typically, the boat would be considered separate property since it was acquired before the marriage, while the house would be considered community property since it was purchased during the marriage. As a result, the house would be subject to the 50/50 split, but the boat would not.

It’s worth noting that there are some exceptions to the 50/50 rule, and these can vary depending on the specific laws in each community property state.

 


Can a Prenup Override Community Property Laws? 

The short answer is yes, it can, as long as it’s valid and enforceable! A prenup lets you make your own rules as it pertains to certain topics, such as property division. 

Let’s break it down with an example: the default law is that anything acquired during marriage is split 50/50. But you create a prenup that says anything you purchase during marriage is actually your separate property, not subject to division. Let’s say you buy a house during the marriage. Under the default law, it’s split 50/50, but under your valid and enforceable prenup it’s YOUR house, and yours alone, it is not getting split up at all. 

 

Why Get a Prenup in a Community Property State? 

Without a prenup in a community property state, your property will likely be split 50/50, regardless of who bought it. So, for example, if your spouse doesn’t work and sits home all day and does absolutely nothing, and you work 80 hours a week to support the two of you, the property you buy during the marriage is most likely going to be split 50/50 (with a few exceptions). If you are okay with that, then by all means, do not get a prenup. 

However, if you want to make sure “what’s mine is mine, and what’s yours is yours” (or somewhere a little less rigid than 50/50) you may want to consider a prenup. With a prenup you can make sure to keep certain assets separate. You don’t have to keep everything separate, either. Maybe you’re super generous and you do want to share, but just not everything. That’s perfectly okay and possible with a prenup, too! 

 

Examples of Prenups in Community Property States

Scenario 1

John and Jennie are getting married in California (a community property state). John plans on starting a business during the marriage and knows about the 50/50 rule in California (property acquired during the marriage is split 50/50). He doesn’t want to subject his business interests to the 50/50 rule in case of a divorce. So, he gets a prenup. In his prenup, he makes sure that his current and future business interests are listed as separate property, not subject to division. They live happily ever after! 

Scenario 2

Katie and Kevin are getting married in Texas (a community property state). Katie knows she will be earning a very high income (in the upwards of $500,000 annually) during the marriage. She will be the main breadwinner and Kevin will likely be a stay-at-home dad. She wants to keep much of her property separate, but is okay with sharing some things. She decides to keep her income separate, but is okay with sharing any appreciation on assets she earns during the marriage. She and Kevin talk about this and decide this is what’s best and fair for their situation. The result? Katie’s income is kept separate, but any separate asset appreciation is split. For example, Katie’s houses she purchased increased by $800,000 during the marriage. She’s okay with splitting this 50/50, but wants to keep the income separate.

Prenups in Community Property States

Frequently Asked Questions (FAQs) about Community Property States and Prenups

Q: Are Prenups Enforceable in Community Property States?
A: Yes! You can definitely enforce a prenup in community property states, as long as you follow the state requirements for a valid and enforceable prenup in YOUR state. 

 

Q: How do I get a prenup?
A: You can get a prenup using a lawyer in your state or HelloPrenup’s platform

 

Q: How does a prenup work in a community property state? 

A: A prenup can override the default property division laws of a community property state (i.e., the 50/50 rule). You create a prenup before getting married and then in the event of a divorce, you will abide by the terms of your prenup. Your partner can always challenge this prenup but it will be up to a judge to decide if it’s enforceable (or a settlement between you and your spouse). 

 

Q: What are the community property states?
A: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin

The Bottom Line

Yes, you can get a prenup in a community property state, and yes they can be enforced. The best news? You can set the rules for your property and actually override the community property 50/50 rule in your state. If you want to protect your property and ensure it’s not split up 50/50, then getting a prenup may be something you want to consider!

 

You are writing your life story. Get on the same page with a prenup. For love that lasts a lifetime, preparation is key. Safeguard your shared tomorrows, starting today.
All content provided on this blog is for informational purposes only. HelloPrenup, Inc. (“HelloPrenup”) makes no representations as to the accuracy or completeness of any information on this site. HelloPrenup will not be liable for any errors or omissions in this information nor for the availability of this information. These terms and conditions of use are subject to change at any time and without notice. HelloPrenup provides a platform for contract related self-help. The information provided by HelloPrenup along with the content on our website related to legal matters (“Information”) is provided for your private use and does not constitute legal advice. We do not review any information you provide us for legal accuracy or sufficiency, draw legal conclusions, provide opinions about your selection of forms, or apply the law to the facts of your situation. If you need legal advice for a specific problem, you should consult with a licensed attorney. Neither HelloPrenup nor any information provided by Hello Prenup is a substitute for legal advice from a qualified attorney licensed to practice in an appropriate jurisdiction.

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