The
Effect of Premarital Agreements
by James P. Reape
It seems fitting that
in contrast to reviewing premarital agreements, we have the opportunity
to discuss how matters may proceed in a dissolution without the
benefit of a premarital agreement.
First and foremost,
is the issue of support. It is recognized that California's child
Support Guideline shifts a significant portion of the total earned
income of both parents to the household where the children reside.
This can present particular problems for a professional, non-custodial
parent, not only because of their higher earnings, but because of
their limited ability of time to co-parent. Child Support cannot
be addressed in any type of premarital agreement and is not reduced
due to any spousal support or property buy out received. Spousal
support is generally paid from the higher income earner to the lower
income earner. The general rule of thumb is that the support would
be paid for one half the length of the marriage. One of the factors
the Court must look at in setting the amount of spousal support
is the marital standard of living.
As to the division
of property, a professional or business owner who established a
business prior to marriage is subject to paying the soon to be ex
for their community property interest in the business or practice.
Valuing the small business is an area in which reasonable minds
can differ significantly and it becomes more complicated when an
analysis has to be made, not only of the value of the business,
but allocating a certain amount ot separate property and a certain
amount to community property. Most frequently, forensic accountants
or other evaluation professionals are retained in addition to the
attorneys to analyze cash flow available for support as well as
render an opinion as to the value of the business or practice.
In the absence of premarital
agreement or other agreement of the parties with respect to support
or division of assets, it is nearly impossible to avoid the retention
of multiple professionals to deal with these issues. Reasonable
experts could vary significantly in their opinions on these matters
and parties may, and often do, "posture" then litigation
predictability is significantly compromised.
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