When people think about postnuptial agreements (postnups), they often imagine them as tools for divorce planning. At the Kushner Legal Corporation, we encourage married couples to consider using postnuptial agreements to reduce potential lability. Postnups can be useful in protecting one spouse’s assets from the other’s debts and liabilities, including those that arise from accidents, lawsuits, or professional risks.
This article explains how postnuptial agreements work in California and whether they can shield you from your spouse’s liability, such as a motor vehicle accident.

The Basics: Liability Between Spouses

Under California law, you are not personally responsible for your spouse’s wrongful acts just because you are married. If your spouse causes a car accident, you cannot be named as a defendant simply because of your marital status.
The complication comes from California’s community property system. By default, most property acquired during marriage belongs to the marital community. Creditors can reach community property to satisfy a judgment against either spouse. This means that even if you did nothing wrong, your joint savings account or home could still be at risk.

How the Law Allocates Liability

The law draws an important distinction:

• If the act benefited the community. For example, your spouse was driving to buy groceries. In that case, community property is the first source of recovery for damages.
• If the act did not benefit the community. For example, reckless driving on a personal trip. In that case, your spouse’s separate property is used first. If that is not enough, community property can still be used.

In either situation, your own separate property is not liable, but your share of marital assets may be reduced.

Enter the Postnuptial Agreement

A postnuptial agreement allows couples to change the default rules about what is community property and what is separate property. By agreement, spouses can:

• Convert community property into separate property. For example, the family home could be designated as one spouse’s separate property.
• Keep future income separate. Normally, wages earned during marriage are community property. A postnup can provide that each spouse’s earnings remain separate.
• Assign responsibility. A postnup can include indemnity clauses stating that each spouse is solely responsible for liabilities tied to their separate activities or assets.

By reducing or eliminating the pool of community property, a postnup can shrink what creditors may reach if one spouse is sued.

Key Requirements for Enforceability

California courts enforce postnups if they meet strict standards:

• Both spouses must fully disclose their finances.
• The agreement must be voluntary.
• The terms must be fair. Courts are alert to any unfair advantage by one spouse over the other.
• The agreement must be in writing and clearly state the intent to change property rights.
  Independent legal advice for each spouse is strongly recommended, and sometimes required.

Timing Matters: Before or After Liability

A postnup is most effective if signed before any liability arises. For example, if a couple agrees today to keep their earnings separate and one spouse is sued next year, only the assets of the at fault spouse are available.
If an accident has already happened or a creditor is pursuing collection, it is too late to shield assets. Courts may strike down transfers that appear designed to avoid paying existing debts.

Postnup Compared with Prenup

Prenuptial agreements are signed before marriage and often cleaner and easier to enforce because no community property exists yet. Postnups can achieve similar protection but are subject to stricter scrutiny since spouses already owe fiduciary duties to one another.
For background on how community property works in California, see the California State Controller’s Community Property publication.

Practical Takeaways

• You cannot avoid being personally liable for your own wrongful acts. No agreement can erase that responsibility.
• A carefully drafted postnup can protect your spouse’s assets and a portion of your shared wealth from being used to pay for your liability.
• Insurance is still essential. Liability and umbrella policies remain the first line of defense.
• A postnup must be proactive, fair, and properly documented. Waiting until after a claim arises will not work.

Final Word

If you or your spouse are in high risk professions, drive frequently, or simply want peace of mind, a postnuptial agreement may be worth considering as part of your overall financial planning. By clearly defining what belongs to each spouse, couples can reduce the financial fallout from accidents or lawsuits while still honoring the spirit of partnership in marriage.
Contact the Kushner Legal Corporation today to schedule a complimentary consultation.