We Want Prenup!
According to Kanye West in his famous “Gold Digger,” a “prenup” is “something that you need to have, ‘Cause when she leave yo [expletive deleted], she gonna leave with half.”
Its a catchy tune, and that statement really isn’t that far off the mark; except, “prenups” aren’t only meant for divorces.
Also, even though movies and music leave one with the impression that a prenuptial agreement is only fit for the lifestyles of the rich and famous, this isn’t true.
While the prenuptial agreement is of use to the wealthy, it is also a very valuable tool for the not so rich and famous.
What is a Prenuptial Agreement Exactly?
In Texas, prenuptial agreements are referred to as “premarital agreements”. A premarital agreement is defined as “an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage. ” Engaged couples therefore, can enter into the contract before the wedding day, and it will become effective when they say “I Do.”
Under Texas law, a premarital agreement must be in writing and signed by both parties. Generally for any contract to be enforceable the parties must exchange what the law refers to as “consideration”; meaning the parties must put up something of value that will induce the other party to enter into the agreement. A premarital agreement on the other hand requires no consideration. Simply saying “I Do” does it.
Why Would Anyone Need a Premarital Agreement?
When couples marry, they typically each own property that they bring into the marriage; whether it’s something of value such as a house, ranch land, cattle, a car, business interest, or merely something as simple as the clothes on their back, they each bring something to the table. During the marriage, much more property will be accumulated.
Texas is one of a few community property states, meaning that any property acquired during the marriage is categorized as the community property of both spouses. Any property owned by the spouses prior to the marriage (or received as a gift or part of an inheritance during the marriage), is considered that spouse’s separate property.
In the unfortunate event of a divorce, Texas law presumes that all property owned by either spouse is part of the community property estate; it is then the responsibility of each party to prove what property is their separate property. Often, in a divorce proceeding, anything that is categorized as community property is merely split right down the middle with each spouse taking half. This can lead to ugly fights as each party fights over property.
What’s Goes In a Premarital Agreement?
A carefully drafted and thought out premarital agreement can eliminate a messy Property War at divorce by allowing the parties to decide ahead of time and enter into a contract with respect to the rights and obligations of each of the parties to specific property.
You can agree on the right to buy, sell, or use property, as well as the disposition of property upon divorce, death, or some other occurrence. You can agree as to the modification, or even elimination of spousal support (alimony), and even the making of a will or trust to carry out the agreement. The law even says that you can agree as to any other matter as long as it isn’t in violation of a public policy or statute that imposes a criminal penalty.
You can even reach an agreement as to child support, as long as that agreement doesn’t adversely affect the support. Essentially, you can’t enforce an agreement to not pay.
But I’m Not Going to Get Divorced…
While we all hope this is the case, statistics show the divorce rate has been on the rise. So consider for a moment, car insurance. I think we can all agree it’s a necessity. But no one ever hopes to be in a car accident. Instead, we buy car insurance anyway in case a wreck happens.
Even though premarital agreements are usually discussed with divorces, that is only one way to terminate a marriage. A marriage is also terminated by death, and a premarital agreement can be a very helpful Estate Planning tool for marrying couples.
Pros and Cons of Premarital Agreements
Premarital agreements can be valuable tools for any couple. They can reduce stress and expense of litigation, as well as cut down on the time required for divorce proceedings. For those who are entering their second marriage, premarital agreements can allow that spouse to protect their separate property, provide for children of a prior marriage, and protect a separate business asset from unwanted interference by their spouse in the divorce.
Is a Premarital Agreement Right for You?
While it’s true, asking a loved one to sign a premarital agreement can be a touchy subject. The fear of damaging the relationship in and of itself causes many not to seek an agreement, even when it may be beneficial. While protecting the marital relationship is of the utmost importance, it should not hinder you from protecting yourself and your future spouse from the hardship that comes from a messy divorce.
As mentioned above, a premarital agreement is not just for the wealthy. Start by sitting down with your spouse-to-be , and make a list of all the property each of you currently owns and consider any property you feel you may acquire in the future. Then discuss each of your desires as to the listed property.
It is important to note that each of you should consider separate legal counsel when entering into any premarital agreements. Once the agreement is put into writing and signed, you can each rest assured that your property is protected and you can focus on your relationship.
–Authored by Kayla R. Wimberley, Esq.,
Matthew Harris Law, PLLC – Family Law Division
1001 Main Street, Suite 200, Lubbock, Texas, 79401-3309
Tel: (806) 702-4852 | Fax: (800) 985-9479