A prenuptial agreement can be updated only so many times before it becomes a nuptial or marital property agreement. I recommend that you and your fiancé create a prenuptial agreement as close to your wedding date as is possible to allow for it to be as current as it can be on the date of your wedding. What you should avoid is a situation where you and your fiancé create a prenuptial agreement months before the wedding. So much can change in a relationship as you approach the big day. This way you can avoid a situation where you and your fiancé are updating your prenuptial agreement multiple times as your circumstances change.
With that said, it is impossible to go through life and not have your circumstances change in some way. What if one of you or your fiancé gets sick? What if you get pregnant? What if one of you has a wealthy relative pass away and leave all their money to you? These are extreme examples but are nonetheless important to our discussion. Whether the change that you undergo in your life is massive or tiny, you still need to consider what to do if you need to update your prenuptial agreement? When should you consider an update and when is an update not necessary? These are the topics that we will be discussing today.
What to do about your prenup when you think you need a change
The thing about prenuptial agreements is that they do not expire unless you have a clause in the agreement that says that they do. Something along the lines of this: this prenuptial agreement will expire within the next 90 days if we do not get married. It would look something like this but would use more lawyerly language and whatnot. The point still stands you do not need to update your premarital agreement just because it is old. The prenuptial agreement would go into place once you become married unless you and your spouse agree to revoke the agreement formally.
The key here is that the prenuptial agreement only goes into effect truly once you get a divorce. Many people create prenuptial agreements and then never get married. In that case, your prenuptial agreement is worth nothing and has no value or importance in terms of being legally binding. It is a memento of a bygone era or bygone error whichever one suits your perspective better. Don’t worry about the premarital agreement setting you up for a marriage contract or anything that forces your hand in terms of getting married if you later do not want to. It is just a way for you to prepare for the eventual marriage and then divorce if that is the direction that you choose to take your life.
What many people in prenuptial agreements choose to do is to put a clause in there that’s a tie or a deadline for the prenuptial agreement to expire. An example of this type of clause would be something along the lines of- “if we are still married after 30 years this agreement will be invalid for all purposes.” There is always some danger when you start to tinker with an agreement that you spent a great deal of time and energy creating. There may be downsides as well as positive attributes to putting these types of clauses in a premarital agreement. You should speak to your attorney before doing so to gain some understanding of those issues so that you can make a wise decision for yourself.
You may learn that it is better to just update or modify your premarital agreement rather than to insert one of these types of clauses. What you want is for your premarital agreement to be something that protects your interests and that of your spouse throughout your marriage and on into divorce. The idea that a family court judge could ultimately determine issues related to your finances and those of your spouse may be a little intimidating. In most cases, the two of you should be able to determine the course of your life in that regard rather than to put yourself at risk of a judge doing so.
A prenuptial agreement is not something that greedy, rich, or conniving people do. I know that the media, movies, etc. portray prenups as being something that money-hungry people engage in but that is not the truth. The reality is that people that have extremely different levels of personal wealth entering their marriages, kids before marriage, own a business, or have debt may wish to have a prenuptial agreement to protect wealth for their children or to insulate their spouse to be from the risk of debt. Truthfully, if two people agree on the need for a premarital agreement you and your fiancé can put just about anything not related to children into a prenup.
Keep in mind that the premarital agreement will have no importance unless you and your fiancé get married and then divorced. Until then it is a piece of paper that has no legal importance. This does not mean that the document will not have some impact on your marriage or that the two of you cannot gain peace of mind from having agreed to it. What the document ultimately means for the two of you is that you know regarding property issues there will be no need to go before a family court judge in the future. This can greatly benefit the two of you as you make plans to get married and build a life together.
Reviewing your prenuptial agreement
Even after getting married, it is a good idea to review the prenuptial agreement periodically. Do not sign the document and stick it in a drawer never to be looked at again. Rather, it will make sense for you to be able to review the document to determine if it still fits with your current circumstances and needs. It makes a lot of sense to consider updating the document if the need to do so arises. Many people will shy away from updating the prenuptial agreement into a nuptial agreement for fear of what the new discussion will entail. If you are worried about what a discussion about this subject matter could do to your marriage that is not a legal issue. This is a relationship issue that you ought to have examined closely.
Have you switched jobs? That could lead you to be in a much different position financially and may render parts of your agreement moot. A huge uptick in your retirement savings may make some agreements made in your prenup particularly out of date as far as planning after a divorce. You may choose to eliminate certain language about how to treat community property and wealth division in the event of a divorce. Your retirement account may have caught up to your spouse’s and it may be a more equitable position which you wish to focus on in your premarital agreement.
A big part of this discussion occurs if you have children. As I mentioned a moment ago, children’s issues for the most part cannot be covered in a prenup, specifically issues related to custody and child support. However, if you or your spouse stopped working to attend to the needs of your children at home that may cause you to go back to the negotiating table to account for someone not working or having a change in income.
Additionally, you may have inserted language into your premarital agreement that no longer makes sense or is not relevant to you or your family. Imagine having specific language in your document that relates to the pandemic and specific provisions about money, wealth, and savings associated with the past two years. You may have anticipated a pandemic lasting many years. However, if we see the pandemic subside and with it concerns about money that was pandemic related then you may want to remove any language that is no longer relevant to your life and that of your spouse.
At the end of the day, you are trying to put yourself in a position where you do not have to follow an agreement that no longer suits your needs. We see this with some frequency in the world of family law- specifically in child custody. What orders people put in place for child custody may have made sense when your children were young. However, now that the children are older, and their needs have changed then you may need to alter the language on custody or visitation. The same is true for prenuptial agreements. You do not want to be in a situation where your spouse and you are forced to reconcile your life at the time of divorce with a plan that no longer suits the two of you.
A good checkpoint for you in terms of going back and reviewing your prenuptial agreement is to do so after major life events. Did you have a child? Have you a surgery? Lose a job? Find a job? Gain an inheritance? It may be that these life events did nothing to change your outlook on life or your prenuptial agreement. Or it may be that these events led to a shift in your life that renders the prenuptial agreement moot or unworkable based on your current circumstances. Do not run the risk of something happening to your marriage and then finding out that you need to go through a prenup to get divorced that doesn’t exactly check all your boxes.
Review for these things when going through your old prenuptial agreement
If you had the assistance of an attorney when drafting and negotiating a prenuptial agreement it may occur to you that you don’t know all that much about the actual document itself. That’s not to say that you didn’t participate in the signing and creation of the document but that the lawyer helped fill in any gaps you had regarding knowledge and understanding of the legal issues at play. Going through the prenuptial agreement now without the help of your lawyer is sort of like having to find a friend’s house that you went to a year or two ago. Only this time you don’t have someone in the passenger’s seat who knows how to get there. You may be able to find your destination alone but it’s going to take you a while. You may end up wasting a lot of time making wrong turns and making mistakes that would otherwise be avoidable.
The first thing that you could do when reviewing your prenuptial agreement is to look through the document from top to bottom. Skimming the prenuptial agreement doesn’t help you that much. It is better to get a clear and complete picture of the document by reading every word. This will also help refresh your memory and help you to remember if any other aspects of the order may require revision or removal. Yes, this is sort of a painstaking process, but it beats having to go through a divorce with a prenup that no longer makes sense.
Has your life and marriage changed regarding community property and separate property? Separate property may be hard to come by in a marriage for most of us but if you inherited property or were gifted property during your marriage then you may have seen your separate estate, or that of your spouse, increase in value. Changes in employment may have led to changes in your community estate and its value. If you started a business after your marriage and saw that business take off in terms of value, then you may be in a position where your wealth is far greater than you could have ever anticipated. Does this change some aspects of your premarital agreement?
Next, the one thing that I think many people do not consider sufficiently in their prenuptial agreements and married life, in general, is debt. Debt is a major part of many of our lives. From home loans to student loans to the credit card debt that we seem to keep around like a pet, debt can seriously change the financial complexion of a marriage. With that said, I think that it is a wise idea to review your prenup for any language regarding debt. If you or your spouse have taken on debt during the marriage that you would like to insulate your spouse from then this may be a reason to revisit your prenuptial agreement.
One of the main reasons why some people enter prenups in the first place is to allow for one spouse to have a softer landing after a divorce than they otherwise may have. Consider a situation where you entered the marriage with more personal wealth, better job prospects, a much higher salary, and an overall better outlook regarding money than your spouse. This doesn’t mean that you should not get married but it may mean that your spouse’s situation needs to be considered regarding divorce. Spousal maintenance after a divorce or contractual alimony may not play out in court as you anticipate. If you and your spouse have an idea of something that appeals to you regarding these types of spousal support payments, then you should consider a revision of your prenuptial agreement.
One of the main benefits of a prenuptial agreement is the ability to circumvent the Texas laws on community property. This is true of negotiations during a divorce, as well. You and your spouse can create your reality with how property is divided at the time of your divorce. If you all want something to be part of your community estate that would normally go in one of your separate estates, then you can say as much. Likewise, if you want to be able to include an item in your separate estate that would normally be considered community property you ought to include this in your prenuptial agreement as well. Otherwise, who knows how that will shake out in a courtroom with a judge playing the final arbiter of your life and your money.
To make any changes that you have in mind you would need to have the consent of both you and your spouse. From there it would make a great deal of sense to have lawyers, each of you having your own so that you can receive individualized advice just as you hopefully did when you drafted the agreement in the first place. Your best interests should be put at the forefront of drafting an agreement or a revision. It is possible for all parties, you, and your spouse, to be satisfied with what you came up with, but it takes proper planning to get there.
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 consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family may be impacted by the filing of a divorce or child custody case.