Engagement and marriage are joyous occasions. As you might imagine, during this time of celebration, most people do not think about first entering into a contract with their partner whom they love and trust. However, every marriage comes with certain risks and potential for disagreements.
Prenuptial agreements (also known as “premarital agreements” or “agreements in contemplation of marriage”) are not only for couples who anticipate a split in their future. They are for couples who mutually respect one another and value clear communication of expectations.
Marriage is a big commitment and it’s worth taking the time to plan for anything that could happen in the future.
The experienced attorneys at Brousseau Naftis & Massingill, P.C. have represented clients in family law matters for decades. For more information, contact us today for a no-obligation consultation.
What is a Prenuptial Agreement?
Put simply, a prenuptial agreement is a contract entered by two individuals before they get married. These types of agreements are becoming increasingly more common. This is probably because people are waiting until later in life to marry, they’re living longer, and marrying more than once. When couples marry later in life, they often come into the marriage with significant assets and possibly even children from a prior relationship.
Prenuptial agreements can also help avoid the costly litigation that can come with divorce. They can also outline which spouse will be responsible for certain debts, protecting each party from issues with liabilities of their spouse. Through a prenuptial agreement, spouses can also define ahead of time who is entitled to be awarded specific assets or liabilities upon divorce from a place of mutual respect rather than battling over every last asset after things have soured in the marriage.
Even better, spouses can customize these agreements to suit their own needs and goals, while the relationship is in a positive place. This may help couples avoid disputes that would otherwise occur when expectations are unclear.
How Do You Know if You Need a Prenuptial Agreement?
Virtually any couple can benefit from setting clear expectations prior to their marriage. Contrary to popular belief, prenuptial agreements are not only for wealthy people or those who fear their marriage won’t last. Suggesting a prenuptial agreement allows you and your partner the opportunity to discuss and better understand each other’s finances before the marriage — regardless of how much they have.
Entering into a marriage with clear eyes is likely to only strengthen your relationship.
Are There Ways to Protect Your Assets Without a Prenuptial Agreement?
Yes, there are ways other than a prenuptial agreement to somewhat protect your assets, but it takes consistent and thorough bookkeeping. In our experience, the complexity and risks of protecting separate assets without a prenuptial agreement probably aren’t worth the extra hassle.
For instance, if you inherit or receive money as a gift, that is your separate property with or without a prenuptial agreement. However, once you start investing that money, the interest, dividends, rent, royalties, or any other income the money makes is community property unless there is a prenuptial agreement specifying otherwise.
Therefore, it is very important that the income generated from the separate property is never co-mingled with the separate property asset. This can be done by creating a separate account that holds only the income from the separate property, but that income will still be considered community property unless you have a prenuptial agreement.
Can a Prenuptial Agreement Ever Be Revoked?
A prenuptial agreement is a binding contract between two parties and it’s best that the terms are negotiated prior to signing. Accordingly, it cannot be revoked, terminated, or amended without the written consent of both parties.
There are certain circumstances that provide a legal basis for setting aside a prenuptial agreement. However, these are very complicated issues controlled by Texas statutory and case law and the particular facts of each individual case, and it will require an attorney’s advice and assistance to determine whether any of these limited defenses apply.
What Is the Best Way to Start the Prenuptial Conversation?
Most people understand planning for unexpected circumstances: we buy car insurance in case of an accident or we buy health insurance in case of an illness that requires significant medical treatment. So, the best way to approach the conversation is to consider it another way of planning for the unexpected. Entering into a prenuptial agreement is a way for planning the distribution and allocation of assets in the case of divorce or death.
Also, given that arguments over finances are a common precursor to divorce, having an honest conversation about financial expectations prior to marriage could serve to strengthen the foundation of the relationship.
What if One of Us Does Not Want to Sign a Prenuptial Agreement?
Both parties must voluntarily agree to sign a prenuptial agreement. If either party refuses, then a discussion of whether the marriage will go forward must take place. Given the extreme consequences of refusing to sign, it is better to contact an attorney early in the process to fully understand the consequences of signing or not signing a prenuptial agreement and to share your thoughts of any agreements you are willing to make and to identify what issues you absolutely would not agree to and why.
A good attorney will listen to you and negotiate on your behalf to reach an agreement without causing resentment in your relationship.
Brousseau Naftis & Massingill, P.C. Can Help
The experienced family law attorneys at Brousseau Naftis & Massingill, P.C. can assist you in negotiating your agreement, while helping you maintain a healthy relationship with your significant other.
For more information, contact us today for a no-obligation consultation.
