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What is a “Sunset Clause” in a Prenuptial Agreement and How Does it Work?

Those who are contemplating marriage sometimes sign prenuptial agreements to protect their individual financial interests in the event that their marriage ends in divorce. These contracts specify how assets will be divided and how future income will be treated.  

Some prenuptial agreements include a “sunset clause,” which is a written provision that can cancel or substantially alter the agreement during the marriage. Sunset clauses take effect after a certain period of time or upon the occurrence of a certain event. Many prenuptial agreements are written so that the contract becomes null and void if the marriage lasts for a specified number of years. Presumably, a long lasting marriage builds sufficient trust between spouses to have wholly joint financial arrangements.

Other prenuptials are written with “step” sunset clauses, which are provisions that reduce the level of protected assets as the marriage survives different milestones measured in years or decades. Some prenuptial agreements specify that the contract is void upon a certain event taking place, such as the birth of a child.

Prenuptial agreements can be complex. These contracts must address a variety of events and circumstances that might arise years or decades into the future. In addition, the terms of the agreement must be drafted carefully to stay in accordance with state law. As such, anyone considering a prenuptial agreement should seek the guidance and counsel of an experienced family law attorney to ensure that their rights and property are well protected.

Some people believe that prenuptial agreements are only for celebrities and other high-net-worth individuals. However, these agreements can benefit anyone entering into a marriage. Those who marry bring their own money and assets into the marriage, and as those assets could be lost in a divorce, there is always some incentive to protect that premarital wealth.

Based in Roseville, Strategic Law Command provides a full range of family law services to clients throughout California. Our family law practitioners work diligently to protect our clients in a wide variety of matters. If you have a family law or domestic relations legal issue, feel free to contact us online or call (916) 787-1234 for an initial consultation.