Prenuptial or Premarital agreements are legal documents that establish the division of marital assets in the event that a married couple gets divorced or one of the parties dies. The Texas State Law Library provides links to the statutes in Texas law that reference these agreements as well as “Understanding the Law” resources that explain the laws in a manner that may be easier to understand. Beyond prenuptial agreements, couples may create postnuptial agreements or marital agreements during their marriage. Our friends at Brandy Austin Law Firm dive into prenuptial agreements below.
Now, you may be wondering who needs a prenup? NOLO, a legal information and help site, has provided some reasons couples may create a prenup. Some couples with individual debt, like school loans, may use a prenuptial agreement to protect each other from this debt. Prenups can also establish financial rights and responsibilities within the marriage. For example, these can clarify obligations, spell out how credit cards will be managed, and explain plans on the management of joint bank accounts. Further, a partner with children from previous marriages can outline who will inherit their separate property when they die. Otherwise, the surviving spouse may claim this property which leaves the children with less.
The other reason NOLO provides behind prenups is to reduce potential disputes in the instance of divorce and simplify the process. Prenups often have a negative reputation for their association with divorce, as many happy couples planning on getting married may be uncomfortable with the prospect of their marriage ending. However, divorce should be recognized as a realistic possibility. Forbes supports the infamous claim that half of all marriages end in divorce and clarifies that the statistic is only true for first marriages with the rate increasing among second and third marriages. With these high divorce rates, couples wanting to prepare for the worst case scenario and avoid arguments may look into a prenup which can clarify the division of property and whether spouses will receive alimony. Contrary to popular belief, prenups do not only protect wealthier partners. When both partners have an attorney to advocate for them, prenups can benefit and protect both parties.
An article from the State Bar of Texas adds that while many worry that conversations about divorce prior to marriage will put a strain on their relationship, it is important to become comfortable discussing finances in a relationship. This is important as Forbes provides that financial problems are one of the top causes of divorce, cited by 38% of couples involved in a study. Often, couples go into marriages unaware of each other’s financial situation and don’t discuss their assets, debts, or future financial plans, which can lead to problems or misunderstandings down the road. Prenuptial agreements can help prevent these headaches.
An article from the State Bar of Texas lists what happens in a divorce without a prenuptial agreement. Laws vary from state to state but in Texas, money made during marriage is community property. Without a prenup, assets accumulated during the marriage are generally split 50-50, but sometimes along a different percentage. Thus, prenups protect assets a partner enters the marriage with, such as inheritance and property. Those who feel they have significant assets that they would like protected or those that want their children from a previous relationship to inherit their assets should consider a prenuptial agreement.
Ultimately, a family lawyer will tell you, prenuptial agreements are a great idea for those who are interested in protecting their assets and it is always good to be prepared. These agreements often get a bad rap for being uncomfortable to propose and discuss but can be beneficial to both parties involved if done correctly. Prenups are a sensitive and serious topic that require time and money, but may be worth considering depending on the situation and may open honest conversations about finances before they become an issue.