Prenuptial agreements. It’s a phrase that immediately gets a reaction. Thanks to pop culture, the reaction is typically negative. On television and in movies, we often see the wealthy antagonist forcing the less fortunate spouse-to-be to sign a prenuptial agreement, often just days before the ceremony and causing the surprised party to question the person they are about to marry.
Instead of thinking of a prenuptial agreement as an expected but unknown expiration date, think of it more as financial planning for your future as a couple. Help your fiancé by sharing that you truly hope your marriage will last. But with almost 1/3 of marriages and nearly 50% of second marriages ending in divorce, a prenuptial agreement is a great way to protect both of you should your marriage fall into that statistic.
When executed correctly, a prenuptial agreement can actually protect both of you, as well as any children that may be involved. So how does it work? A prenuptial agreement is just another record alongside your marriage license.
First off, whether you have a sizable amount of money saved, you have every right to protect it. Also, you don’t need to be inherently wealthy to consider asking your partner to sign a prenuptial agreement. Other reasons to consider protecting your marriage include if you own a business, expect a large inheritance, have children from a previous marriage or even if you have elderly loved ones you plan to support.
Next, approach the subject sooner rather than later. This gives you plenty of opportunity to share your concerns with your future spouse and also allows for time to think, react and share their own concerns. Be honest; now is not the time to be vague. It won’t do either you any good to try and hide something.
Have this discussion as a couple before reaching out to family lawyers. This will give you each an opportunity to understand your expectations. You should each have a lawyer represent you, as you would in a divorce. The lawyers will work together to create a document that uses your concept along with state law that has each of your best interests in mind.
Finally, from time to time, review the agreement. Just as some rewrite their wills, you may want to revisit the allocation of assets over time and keep it up to date. You may even consider what some refer to as a “sunset clause” – one that makes the agreement null and void as a whole after a certain amount of time.
You may have heard that Texas is a community property state, and you may be wondering if a prenuptial agreement is worth your time. Michael Hiller and his team at Hiller Law would say, “Absolutely.” Community property simply means that when you split, the property you own as a couple is also split. While it does not mean that it is necessarily split 50/50, Texas law allows property be divided in a manner that is “just and right” as deemed by the judge in the divorce court. As such, you can see how a prenuptial agreement set up at the beginning of the marriage can save time, money and even emotions later down the line.