Understanding Community Property in California
When you marry in California, most income earned and assets acquired during the marriage are considered community property. This means that, as a general rule, each spouse owns an equal one-half interest in those assets—regardless of who earned the income or whose name appears on title.
Community property typically includes:
- Salaries and wages earned during marriage
- Homes purchased with marital funds
- Retirement contributions such as 401(k)s and IRAs made during marriage
- Business income and growth
- Stock options, bonuses, and investment returns earned while married
If a marriage ends in divorce, community property is generally divided 50–50, even if one spouse earned more or managed the asset.
While there are exceptions and nuances to these rules, community property law is the default framework that applies to married couples in California unless they choose otherwise.
What Does a Premarital Agreement Do?
A premarital agreement—commonly called a prenup—allows couples to contract out of California’s default community property rules in the event of divorce. In simple terms, it gives couples the ability to decide in advance how assets, income, and financial responsibilities will be handled, rather than leaving those decisions to statutory formulas or a judge.
With a properly drafted prenup, couples can:
- Define what will remain separate property
- Decide how marital property will be divided
- Address how future earnings or business interests are treated
- Reduce uncertainty and potential disputes
Not every issue can be addressed in a prenuptial agreement, and certain terms are restricted under California law.
While community property law may seem straightforward in theory, its real-world application during a divorce is often complex. Disagreements over asset characterization or division can quickly escalate, and unresolved issues are ultimately decided by a judge—often at significant emotional and financial cost.
Why Planning Ahead Matters
When couples are engaged, it is natural to assume that if a divorce ever occurred, it would be amicable and straightforward. Assets would be divided fairly, and everyone would “do the right thing.”
In practice, divorces rarely unfold this way.
Even well-intentioned people can behave unpredictably when emotions run high. I have seen disputes arise over items as small as houseplants or coffee mugs—and as significant as homes, pets, and financial accounts. When conflict enters the picture, what once seemed simple can become contentious and drawn out.
Planning ahead while both parties are aligned allows couples to make thoughtful decisions without the pressure, fear, or resentment that often accompany divorce proceedings.
A Prenup Is About Clarity—not Separation
It can feel uncomfortable to think about contingency planning while preparing for marriage. That hesitation is understandable. But a prenup is not about anticipating failure—it is about reducing harm if the unexpected occurs.
Just as health insurance does not cause illness, a premarital agreement does not cause divorce. Instead, it reflects a mutual commitment to handle difficult situations with fairness, clarity, and respect.
By addressing financial expectations in advance, couples can reduce the risk of prolonged conflict, preserve resources, and protect their emotional well-being should the marriage ever end.
Final Thoughts
Life is unpredictable, and marriages—like people—evolve over time. A premarital agreement gives couples a way to acknowledge that reality without undermining the optimism and commitment that bring them together.
When done thoughtfully and in compliance with California law, a prenup can provide peace of mind and allow couples to enter marriage with a shared understanding of their financial future.
