Of all the concepts in the law, I think prenuptial or premarital property agreements get as bad a name as any when it comes to why a person would want to have one drafted for themselves or a loved one. When we think about premarital property agreements or prenuptial agreements as they are more commonly known, I think the instinct is to assume that someone is up to something when drafting one of these documents. We have seen movies and television show plots centered around these topics where a wealthy and usually older spouse tries to prevent their younger fiancé from getting much of their property should they divorce. I can think of quite a few stories off the top of my head that have centered around this premise almost precisely.
Although the topic of a premarital agreement may make for exciting entertainment, the reality is that most people who consider drafting a premarital property agreement are not doing so for nefarious reasons. There is little chance that a fraudulently drawn premarital property agreement will be deemed enforceable by a court. Instead, most of the time that premarital property agreements are drafted, it is done to enhance the relationship, protect a fiancé or partner auntie generally plan for the following stages of a relationship. Greed or underhanded dealings I have never entered any process that I have ever been associated with when it comes to premarital property agreements.
However, before we get too deep into this discussion, I would like to talk with you about a premarital property agreement. Although you may have a decent idea about what one of these documents is, that does not mean you have enough of an understanding to be able to decide as to whether one of these documents will be in your and your fiancé’s best interest. Instead, let’s focus on what these agreements are and, more importantly, what they are not. That way, it is a subject that you can discuss more openly with your fiancé. The last thing you want to do is begin a discussion with a somewhat skeptical partner and find that you have more questions and answers yourself.
What is a premarital agreement?
A prenuptial agreement is a written contract that you and your fiancé would create before your marriage. Most prenuptial agreements list all the property that you own and all the property that your fiancé owns. Please note that currently, it is essential that you both list out your debts and your property. With student loans, home loans from prior marriages, credit card debt, and a host of other types of loans that may be out there, you need to be able to present a complete picture of your finances within the premarital agreement.
The key to any premarital agreement is the plan, but you set forth to determine who will own what property in the event of death or divorce. Bear in mind that Community property law will determine how property is divided in your marriage, not only if you get a divorce but also if you or your spouse pass away while married. Note that any conflict or potential conflict with a premarital agreement and your will should be sorted out with an attorney at the time of the drafting of the premarital agreement.
Do you need a premarital agreement?
This is the crucial question that we need to ask ourselves. If you do not need a premier until an agreement or stand to benefit from 1, then all this discussion would be sort of silly. Instead, we need to figure out whether this sort of document will be beneficial for you and your fiancé. Otherwise, we’re just spinning our wheels, and you could be spending your time more productively elsewhere. With that said, let’s do our best to figure out whether a premarital agreement is something that you ought to be interested in.
As we have already indicated, I would tell you that a premarital agreement is not only for wealthy people. If nothing else, I hope you understand that A premarital agreement can stand to benefit you no matter how much money you earn. You don’t need to be rich; you don’t need to be poor, and you don’t necessarily need to be in the middle of income earners to benefit from a premarital agreement. Instead, that is entirely possible for you to benefit from a premarital agreement no matter your income level.
Protection of assets is a common reason why people enter into premarital agreements. We have already discussed that motivation a couple of times in today’s blog post. However, we at the Law Office of Bryan Fagan have seen an increase in the number of people drafting premarital agreements throughout the past few years. Even people of relatively modest means have expressed a greater interest in drafting premarital agreements. While everyone reading this blog has unique reasons on a personal level to consider the drafting of a premarital agreement, here are some common reasons why drafting a premarital agreement may make sense for you and your fiancé.
Separate property going to children rather than your spouse
If you have been married before then, you have likely accumulated some degree of property from your life before marriage and from your prior marriage itself. Even if the property was classified in your previous marriage as community property, that does not matter for your soon-to-be wedding. Any property you acquired before your soon to be married will be considered separate property for your marriage. However, there may be some questions about how property will be handed down to your children versus what property would go to your fiancé when you pass away.
This is where a premarital property agreement can come into play and assist you in estate planning efforts. If you have children from a prior relationship or marriage, you may want to allow those children to inherit all property from you that came from before your soon-to-be marriage period; in this case, you should consider a premarital agreement. The premarital agreement can be used to spell out precisely what you want to see happen with this property in the event of a divorce. That way, there will not be any doubt asking two what will happen with this property in the event of a future divorce. Indeed, you are not hoping or planning for a divorce, but taking steps to improve your forward-thinking on this subject can help your family a great deal. This is true if for no other reason than you would be able to negotiate this with your fiancé rather than with a spouse with whom you are not on the best of terms. I have found that people look back at drafting a premarital agreement on this specific reason as being particularly beneficial given the unsettling and challenging nature of negotiations on this type of subject matter. It is better to negotiate these subjects with your fiancé rather than risk seeing what could happen in a divorce scenario.
This is a fundamental reason to consider a premarital agreement when you have children who are disabled or otherwise incapable of providing for themselves. While there are certainly other ways to help children in this sort of situation, one of the most direct ways to do so would be to work with your fiancé to negotiate a premarital agreement that considers the needs of your children who may be disabled. While not every circumstance will allow for a premarital agreement of this sort to be drafted, it is undoubtedly better for many people to work through their problems this way rather than in a contentious divorce.
How a premarital agreement can provide clarity to you and your fiancé when it comes to your finances
Whether or not you have children, a premarital agreement can serve a purpose for your family. Whether or not you are wealthy, a premarital agreement can serve a purpose for your family. Whatever your specific circumstances are regarding your family finances, a premarital agreement can serve a purpose if for no other reason than you can straighten out and clarify the finances of your family during the marriage. A premarital agreement puts you in a position to determine ownership of the debt, property, assets, and other items before the marriage beginning. This is a great advantage that allows you to enter negotiations and discussions with a clear head rather than in the fog of a divorce.
If you have a concern over how your spouse will live after divorce, you can provide for special maintenance within your premarital agreement. This will help their life on their own for a period after the divorce. This would allow them to return to the workforce, finish a degree, or attend a technical school to further their income-earning ability. The decision to pay for spousal maintenance can be incredibly impactful for your family now and in the future. Many people prefer to make this kind of decision before divorce rather than the stress of divorce changing your mind or influencing the way you think later.
Negotiate in discuss rather than fight
As we have alluded to, a divorce turns a relationship into a business transaction. This is fine if you are not involved in that relationship, but it is tough to internalize this while going through the heartache and disappointment of divorce. Taking a years-long relationship and turning it into a business transaction is easier said than done. Even if he thinks you are emotionally ready to be in these types of conversations, most of the time, people find that they are not as well equipped to do so as they would have thought. It is still necessary to negotiate these subjects, and two work on completing a divorce through settlement negotiation rather than in divorce court.
Instead, most people would prefer to have already worked through the issues of property division and finances before a divorce rather than have to look at these subjects for the first time in a divorce case. We know that nobody’s brain processes information in stressful situations or makes decisions better than in times of relative calm. Divorce is anything but peace. You may feel completely ready to go through your divorce, but people rarely thrive in that sort of environment. There is almost no question that you will do better to work through your divorce issues in a premarital agreement rather than in a divorce.
A divorce involves a fair amount of back and forth and bickering, which is unavoidable. That is just the nature of the beast. However, in negotiating a premarital agreement, you can take the goodwill that comes with that period immediately before your marriage and turn that into reasonable negotiations and a greater degree of grace being provided to one another. Assuming the worst in your negotiating partner is a wrong way to start, so not negotiations in any context. This is especially true in a divorce.
Debt as a part of your premarital agreement
As we talked about a moment ago, most everyone reading this blog post has had a relationship with debt at some point in their lives. A couple of generations ago, our grandparents maybe took out a small loan to purchase or build a home. Our parents’ generation stepped up their relationship with debt by taking out considerably larger home loans, buying items with a credit card rather than with cash, and accepting loans to attend college. Our generation has continued with this trend, and we see now that it is possible to be loaned money to make small purchases of personal items during online shopping. As a result, we are more comfortable with debt, but our share of debt relative to our chair of assets has increased steadily over time.
One of the concerns that spouses have, especially in a second or third marriage situation, would be the deaths that may be passed onto their new spouse. If you generally take out loans to make purchases for your business, then the reality of that situation is these loans are not business loans but are personally signed for by you. This makes their personal debt, much like the other types of debt that we have just finished discussing. As a result, these personal debts may be subject to division in your divorce. While it is not likely that you have signed or cosigned on any of these loans with your spouse, it is possible that the creditor or lender could attempt to access your bank accounts or information to or pay these debts old by your spouse.
Therefore, a premarital agreement can be an excellent way to shield your spouse from the risks of being signed dead that is genuinely not your own. Ask your attorney what can be done to avoid taking on the responsibility of Your spouse’s debts by negotiating and drafting a premarital agreement. These documents can go a long way towards determining how debt will be handled and how best to shield yourself from my ability for obligations that do not bear your name specifically.
All in all, premarital agreements are some of the most peaceful in straightforward documents or processes involved in the world of Texas family law. In my opinion, it is a shame that so many people have negative views of them based on stereotypes or misconceptions based on what we see in the media. I hope you have noticed that premarital agreements serve a purpose for families and are not tools to use by people who seek to take advantage of others. The best way to begin learning about premarital agreements in earnest is to contact an experienced family law attorney. These legal professionals have the experience you need through helping others just like you when it comes to learning about premarital agreements and negotiating them, as well.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultation six days a week in person, over the phone, and via video. These consultations are an excellent way for you to learn more about the world of Texas family law and how your family circumstances may be impacted by the filing of a divorce or child custody case. Thank you so much for being so interested in our law office.