There Are Certain Situations Where a Premarital Agreement Is In Your Best Interest
I do… these two little words will change your life in ways you could never imagine. When you first get married, you think and hope that it will last forever. The reality is that nothing is certain in life. It may never cross your mind that you’ll get divorced, and if you have assets going into a marriage, you may want to protect them now.
If so, you may want to consider a premarital agreement.
Texas is a “community property” state. It is important to determine what property is community property and what property is separate property, because a Judge in a Texas divorce case can only divide community property. A Judge cannot, however, divide separate property, which includes, among other things, property owned before marriage, inherited property, property received as a gift, and property that is defined as separate property in a premarital agreement.
A premarital agreement (also known as a prenuptial or prenup) identifies what is community property, if anything, and what is separate property. These agreements can also dictate what happens to separate and community property in the event you get divorced. Should you and your then-spouse divorce, this agreement will come in handy. It will save you time, money and aggravation.
When Should You Have A Premarital Agreement?
1.) Financial Protection for Existing Assets
Sometimes newlyweds bring significant assets into a marriage. This is more common in second or third marriages, but it happens with first marriages as well. A premarital agreement can protect those pre-marriage assets from being claimed as community property in a later divorce proceeding. Additionally, rents and other income from separate property are typically characterized as community property. A properly drafted premarital agreement can set aside this income to the spouse who owns the property as his or her separate property.
2.) Protection From Assuming The Other’s Debt
Some people have debt going into marriage – student loans, credit cards, etc. And, for some people, this debt could keep them from moving forward and getting married. However, a prenuptial agreement can lay out how the debt will be paid and who the responsible party is if you get divorced. The agreement could also stipulate that a person who amassed debt during the marriage is responsible for paying it back, not the spouse.
3.) Professional Career Protection
If you own a business or have plans to start a business after the marriage, it’s important to talk with a lawyer about how your business could be affected. They may suggest you get a prenuptial agreement to protect your business interests.
4.) Define A Spousal Support Amount
Texas does not have “automatic” alimony in most cases. When a couple divorces, the Judge will determine if spousal support is available. The Judge also determines the amount of support, where the money is coming from, what percentage the supportive spouse will need, and how long they will have the support. An agreement beforehand could save you a lot of time and money.
5.) Discourage Bad Behavior
A premarital agreement can also provide “poison pill” provisions whereby a spouse forfeits certain rights related to property or support if he or she engages in bad behavior, such as adultery. A spouse can also forfeit his or her right to property or support in the event that he or she contests the validity of the premarital agreement.
The View Of Premarital Agreements
Most people see a prenuptial agreement as something bad. People see it as a way to protect financial assets from gold diggers and greedy spouses. The mere mention of a prenup could produce feelings of anger, sadness, etc.
However, it’s important to remember, a marriage ends one of two ways – divorce or death. The prenup can be used in either instance. With this agreement in place, both parties understand full well what to expect before they say “I do.”
It is essential to have a family lawyer put together your premarital agreement. Both spouses need to have their own attorney, and a probate and estate lawyer should also be involved in certain sized estates. Each attorney will address the potential issues of a marriage when it ends.
Are you about to take the marital plunge and wonder if a premarital agreement is right for you?
Call 940-591-1191 to set up a consultation. Regardless of the current or possible financial situation for you or your spouse, our attorneys will help you understand the benefits of a prenup and help you determine if your situation warrants one.