At Neal Ashmore, one question we are often asked, is how people can protect themselves from the financial strain of divorce. The short answer, is that if you’ve already arrived, your best options to avoid costly litigation, would be to try working with your spouse through mediation, or even a collaborative divorce. For couples still waiting to seal the deal, though, a prenuptial agreement would be the best option to safeguard financial interests against future divorce.
A prenuptial agreement—or “prenup,” as it’s commonly called—is a custom-designed, pre-marriage contract, that can dictate anything from responsibilities and childcare, all the way to property division. These terms are often directed at potential divorce scenarios, but can also dictate the behavior of the spouses while they’re married (within certain restrictions).
Despite the stigma that prenups are only for situations where one party is vastly wealthier than the other, each year, Neal Ashmore handles a growing number of cases where financially equal couples are choosing prenuptial agreements. This is because the benefits of a prenup extend not just to wealth and divorce, but can also help simplify a number of different family, property, and financial-related issues that regularly surface in a marriage.
Here are five great reasons to have a prenuptial agreement, and why you should consider asking your Neal Ashmore attorney help you draft one.
1. Children From a Previous Marriage
These days, it’s not uncommon for individuals to get married more than once. This, naturally, can lead to marriages involving children from other relationships. For parents in these situations, a huge motivator for a prenup is to protect the interest these children. Especially since divorce can often lead to situations where funds—those monies essential to maintaining a family’s equilibrium—are diverted to other pockets.
2. Property Classification
In Texas, all assets acquired during marriage—by either party—are considered community property, which means they belong to the spouses equally. Any assets the individuals bring into the marriage, on the other hand, is separate property, and would (theoretically) leave with whichever person brought them in. That all might sound simple, but after child custody, property classification is the next biggest battle ground in divorce. Particularly when dealing with lengthy marriages, where separate property has had a long time to become commingled or transmuted.
Another benefit of a prenup, then, is its ability to reduce or eliminate fights over property classification. This can be especially beneficial, if one or more of the individuals own’s their own business, or has valuable intellectual property rights. A prenup can protect your hard-earned efforts, and make classification and division a simple matter, if you ever split.
3. Protects Against Debt
Far more common than wealth disparity, are disproportionate debt gaps. If your potential future spouse has a history of bad spending, this is a valid reason to be concerned. Because when it comes to community property, it’s not just assets that are owned jointly by the couple, it’s debt, too. Meaning, once you marry, any debt your partner accrues after marriage will be attached to you as well.
A prenup can help with that. By specifying it in the contract, our attorneys can shield you against the poor spending choices and bad debt that might be following your partner around like a plague.
4. Prenuptial Agreements and Death
Without a will, estate law dictates that next of kin will inherit upon death. In this lineup, that person is the spouse. Sometimes that’s okay, and sometimes it’s not. If you have children from another marriage, or want to make sure an heirloom item stays in the family, you might not want all of that going to your new spouse. While it certainly won’t replace the value of a good will, a well-drafted prenup can still help make sure assets go to the people you want them to, and that heirlooms stay where they belong. (Although, we can help you with that, too.)
Finally, a prenup’s ability to reduce the stress of divorce cannot be overstated. We already touched on a prenup’s power to simplify property classification, but its benefits don’t end there. A prenuptial agreement can also address hot-button issues like alimony, and child custody, and can even touch on topics like adultery, providing financial repercussions for unfaithful behavior, and making a fault-based allegation much easier to prove.
Through these and other divorce clauses, the team at Neal Ashmore has helped countless couples safeguard themselves against the time and cost restrains of future divorce. Relieving them of these potential stresses, and ensuring that if any eventual dissolution happens, it does so for the right reasons.
Limitations of a Prenuptial Agreement
Figuring out how to draft the perfect prenup can be tricky, and there are some limitations. According to the Texas Family Code, prenuptial agreements cannot be used to erase retirement benefits of a spouse, require anything illegal, be used to defraud creditors, or effect child support. Any contract must also be in writing, signed by both parties, and made in good faith (meaning, you can’t hide assets).
Contracts that don’t follow these guidelines are in danger of not holding up when they’re needed most, so it’s always a good idea to have an attorney review anything before signing. At Neal Ashmore, we’ll make sure your prenuptial agreement covers what you need it to, while also staying within the bounds of legal enforceability.
Marital Agreements in Texas
For couples who are already married, the chance to afford your marriage these same protections is not lost. In addition to drafting prenuptial agreements, our attorneys regularly assist couples in drafting “marital,” or “postnuptial” agreements. This type of contract is nearly identical in purpose, structure, and limitations to its prenuptial counterpart. The only difference is, instead of making it prior to getting hitched, marital agreements are made after the knots are tied.
A marital agreement can be a great way for couples to help organize finances after an influx of income, alleviate the pressures of single parents reentering the workforce, protect business assets, prepare for the possibility of divorce, and can even be a way to reaffirm commitment to your spouse, if you screwed up. Because nothing says “I want you for you,” more than offering your partner a slew of favorable divorce terms.
Prenuptial and Marital Agreement Attorneys in Texas
Despite its stigmas, having a prenuptial or marital agreement doesn’t mean you don’t trust your partner. Rather, it’s just smart thinking. If you and your partner are considering either a prenuptial, or marital agreement, the family attorneys of Neal Ashmore want to be there for you. Call us today at (972) 436-8000, or schedule a consultation online. With our help, we can draft a document that specifically addresses your individual needs as a couple, and make sure the focus of your marriage stays where it should be: each other.