A prenuptial agreement, or prenup, refers to the process of two people entering into a contract that determines and addresses property issues before becoming legally married. Many people understand very little about these agreements, usually thinking it strange to contemplate a potential divorce before even marrying, maybe even feeling disillusioned about the intent and the benefits of why a couple might choose to enter into a prenup.
Traditionally, most people hear the word “prenup” and have a negative association. They may think these agreements are only used for those entering into marriage for monetary or materialistic reasons. They may also believe that prenups are only for the very rich. However, these legal documents can benefit couples in all income categories and address many potentially problematic situations.
Benefits of a Using a Prenup
An engagement is an exciting chapter in a couple’s life together, as it symbolizes the commitment and love they have for each other by committing to enter into marriage together. After an engagement and before a wedding or exchanging of vows, the couple will spend many hours making decisions about the ceremony and celebrations. They will also often discuss their expectations around how they plan to live and manage their family.
During this time of planning for a couple’s future life together, the question of whether or not to enter into a prenuptial agreement may arise. While many people are familiar with the term from movies and pop culture, the purpose and benefits of prenuptial agreements remain widely unknown. This can make it difficult for a couple to agree on whether or not a prenup is necessary for their marriage.
Typically, prenups are written to plan for a desired division of assets and debts of two individuals before marriage in the event that the couple should one day separate. A common misconception associated with prenups is that they’re only for those with a lot of property or money to safeguard. Many couples execute prenups, however, to ensure neither of them is left destitute, regardless of how much money they have between them.
Establishes Open Communication
Because a prenup requires a couple to sit down and draft a contract based on their individual assets, prenups actually aid in initiating an open conversation on the topic. These talks make a lot of people nervous because they can be awkward or uncomfortable. Most people grow up learning that you shouldn’t discuss money before marriage because you might seem greedy.
However, the discussions during the formation of a prenup can help establish healthy boundaries and communication. Prenups often address critical topics such as:
- Children: Prenups can be used to outline desires around the educational and religious upbringing of any children, where to raise them, and when they visit other relatives. It can also provide a template for custody and child support agreements if the couple divorces.
- Debt management: If one partner is a spendthrift and the other lives exclusively on high credit card balances, the couple can establish rules about how to manage payments and ensure they aren’t left bankrupt.
- Finances: The couple can agree to terms regarding how they’ll manage their income, inheritances, windfalls, and other assets they may receive. For example, they may choose whether to have joint or separate bank accounts, which can significantly affect the division of assets during a divorce.
Protects Family Heirlooms
A key benefit to a prenup is the protection it applies to treasured items, such as family heirlooms and any other individual property that may hold great sentimental value. By defining which personal possessions and family heirlooms a person would not be willing to part with in the case of a divorce, a prenup can give peace of mind to both parties.
Cost-Effective
It’s no surprise that, depending on the case, divorces can be costly. One area that fuels lengthy divorce battles, and consequently the cost of attorney fees, is a division of assets. With a prenuptial agreement intact, couples will enter into a divorce already agreeing on key issues instead of getting into bitter fights and drawn-out cases if neither spouse wants to give in.
However, as emotions rise and the divorce process begins, each partner’s original stance may change or develop. When they have already created a prenup as a clear and legally binding document, it can be used as a starting point to address key components in the divorce.
Divorce is never easy, but a well-written prenup that was thoughtfully created can expedite the process tremendously. With a solid prenuptial agreement in place, both spouses can save money on attorneys’ fees and other expenses when their divorce is completed quickly.
Defining Marital Property
Texas is a community property state, which means that in the case of a divorce, any assets or debts that a couple shares could be split evenly. A prenup allows a couple to decide what will qualify as shared marital property and what will not. This becomes crucial when establishing what is separate property that belongs exclusively to one spouse and not the other.
The difference between marital property and separate property lies in who received it before or during the marriage. Property may be given to, inherited by, or shared by both spouses. Suppose one partner inherits a home or other property after the wedding. If the home is deeded only in their name, it is considered separate property and can leave the union in that spouse’s name alone.
However, if the other partner’s name was added to the deed, it is then marital property and eligible for division under Texas law. If the property is in another state, it may fall under the asset division laws of that jurisdiction. Since determining what is separate and what is community property can get complicated, it’s useful to consult with an experienced prenuptial agreements attorney to understand your situation.
Protection From Debt
While it may be a far thought from any newly engaged person’s mind, separations and divorces can be ugly, and an individual’s hurt can be multiplied exponentially through the process. Aside from ensuring that precious items, such as family heirlooms, remain in your possession post-divorce, prenups can also protect you against taking on the other spouse’s debt from credit cards or loans.
Just as assets are divided equally, so are liabilities – such as debt. Through a prenuptial agreement, you can outline and define individual liabilities.
Understanding the Law on Prenuptial Agreements in Texas
Along with determining what happens when a marriage ends, a prenup can dictate how a couple wants their relationship to function during its life. In Texas, important laws govern how these documents are created and when they are considered unenforceable.
Texas law requires prenuptial agreements to be in writing and signed by both individuals prior to the wedding date. A prenup can be invalidated in certain situations, including:
- If one individual failed to fully disclose all their assets or liabilities, causing the other person to sign an (unknowingly) fraudulent agreement
- If one person was coerced into signing the agreement or did so under duress
- If the document is determined by a court to be unconscionable, meaning it is substantially unfair to one party
If your future spouse approaches you about signing a prenuptial agreement they have already written, you must protect yourself by consulting with your own family law attorney. Although you are planning to spend your life with your partner, the smart choice is to look out for your own interests, ensure you are being taken care of, and be certain the other party is not keeping anything from you. Your lawyer will work for you alone and can alert you to any unfavorable provisions in a legal contract.
Ways You Can Use a Prenuptial Agreement in Texas
As mentioned earlier, prenups can be used to set guidelines for nearly any situation a couple may face during their marriage. Most people only think of how to divide the assets they currently have, but there are many specific applications for this kind of document.
Couples may write a prenup to address issues such as:
- Dividing future assets: A young couple starting out may have very little, but suppose one of them inherits a large fortune, or they start a business together that becomes very successful. A prenup allows the pair to consider multiple possible futures and how they wish to handle them.
- Spousal support: Alimony, or spousal support, can become a source of significant tension during a divorce. Those discussions can be eliminated with a carefully prepared prenup.
- Spousal rights at death: When there are children from a previous marriage, their parent may want those children to receive certain properties or funds when they die. Probate courts often dictate how assets are divided, but a prenup can be drafted to show the intent of the parent. This allows the children to receive their due share.
- Separation agreement guidelines: Although a prenup cannot be used as a legal separation agreement, it can allow the couple to determine how they want their assets, liabilities, and children to be treated during a split. Prenuptial agreements can provide a template for child custody and child support.
Creating the Right Prenuptial Agreement Requires Skills and Experience
Although there are many options for do-it-yourself legal documents online, the truth is that these websites and forms cannot and do not compare with getting guidance from an actual lawyer. The statutes and case law governing property division, child custody, and inheritance change, and you won’t have any guarantee that your self-created prenup will stand up to scrutiny in court in the future without using a lawyer.
A qualified family law attorney can assess your specific needs and circumstances and build a customized document that gives you peace of mind through the years to come. Each spouse should have their own legal counsel to ensure their interests and desires are taken into consideration. If your partner doesn’t use an attorney, they may try to claim later on that the agreement wasn’t fair to them.
A lawyer can also keep certain clauses or requirements out of your prenup that would cause it to be invalid. Some examples of items that could result in a prenuptial agreement being thrown out of court include:
- Illegal activities: To be a legally binding document, a prenup can’t require any actions or contain any provisions prohibited by law.
- Statements that violate public policy: A prenup cannot require you to waive your rights to child support, custody, or visitation. It also can’t offer financial incentives to encourage or discourage divorce.
- Non-monetary provisions: You can’t make day-to-day rules for your spouse or require them to have a specific number of children.
In some instances, a partner may try to railroad their fiancé into signing a prenup without giving them enough time to review it thoroughly. Texas law requires these contracts to be signed voluntarily by both parties at least 60 days before the wedding license is signed.
Texas Premarital Agreement Lawyers
While prenups may have a mixed reputation, they are important and valuable planning tools for a couple’s future. Choosing to enter into a prenup is a responsible decision made by a couple with a commitment to honor each other while protecting individual assets.
To explore whether a prenuptial or postnuptial agreement is right for you or for professional assistance negotiating, drafting, or reviewing a prenuptial agreement, contact Terry & Roberts. Invest in your marriage’s future by discussing your needs with a skilled and knowledgeable Texas premarital agreement lawyer today.