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.
When spouses enter into marriage without a prenuptial agreement in place, they inadvertently default to the standard rules of California Family Law, particularly under the California Family Code §§ 760–761 regarding community property and §§ 4320–4326 regarding spousal support. These rules are broad, often rigid, and can become highly contentious when businesses, substantial assets, or children are involved.
Without a prenuptial agreement, the legal structure governing divorce assumes all income and assets acquired during the marriage are community property, to be split equally. This framework, while intended to ensure fairness, may feel unfair to professionals or business owners who bring significant individual effort or pre-marital investments into the marriage.
In California, where community property principles dominate, ownership and entitlement are not solely determined by whose name is on the business license or title document. Instead, the court evaluates how those assets were acquired, how they appreciated during the marriage, and whether any co-mingling occurred.
First and foremost, there 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 framework is codified under Family Code §4055, which outlines the “Statewide Uniform Guideline.”
The formula used considers:
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.
Importantly, child support is non-negotiable in prenuptial agreements. The court retains exclusive jurisdiction to determine what is in the best interest of the child and does not permit private contracts to override this duty.
Professionals such as physicians, lawyers, or business executives often:
In these scenarios, courts may still rely on earning capacity rather than actual income, assuming the higher-income parent is underemployed or deliberately reducing earnings.
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 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.
Additional considerations under Family Code §4320 include:
In the absence of a prenup, these factors are fully litigated, often with a substantial financial and emotional toll.
As to the division of property, a professional or business owner who established a business before marriage is subject to paying the soon-to-be ex for their community property interest in the business or practice.
Community property includes:
Separate property includes:
However, real-world scenarios are rarely black and white. If a business appreciates during the marriage, that increase may be considered community property, even if the business itself began as separate property.
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 to separate property and a certain amount to community property.
Common valuation methods include:
The court may consider:
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.
A forensic accountant may:
These experts often testify in court, and their reports can heavily influence judicial rulings.
In the absence of a prenuptial 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.
Family law attorneys, forensic accountants, child custody evaluators, and vocational experts may all play roles depending on the circumstances.
Reasonable experts could vary significantly in their opinions on these matters, and parties may, and often do, “posture,” then litigation predictability is significantly compromised.
Beyond numbers and legal codes, divorce without a prenup often inflicts:
Rebuilding your financial identity and mental resilience post-divorce should be a parallel priority.
A well-structured co-parenting plan should include:
Courts in California favor joint legal custody unless one parent is deemed unfit or unwilling to co-parent.
Yes, but documentation is crucial. Maintain separate books, avoid co-mingling funds, and consult a forensic accountant to trace pre-marital interests.
Absolutely. The court distinguishes between personal goodwill (attached to the individual) and enterprise goodwill (attached to the business itself), which can be subject to division.
For federal tax purposes post-2019, spousal support is no longer deductible to the payer nor reportable by the recipient. However, state laws may vary.
Yes, especially if they contradict state law or are deemed inequitable. Always formalize agreements through the court.
In many cases, yes. California allows for reimbursement claims when community efforts substantially contributed to the separate property value.
At Reape Rickett, we specialize in guiding professionals, entrepreneurs, and high-asset individuals through the complex terrain of divorce without a prenuptial agreement. Our approach integrates legal precision, financial clarity, and empathetic advocacy to protect what matters most to you.
Schedule a consultation with our legal team to understand your options and develop a personalized strategy that safeguards your future.
Visit us at: https://divorcedigest.com