If you are considering marriage or have recently become engaged to be married, congratulations! There is so much to plan and prepare for in the run-up to a wedding, and these decisions can be both exciting and stressful. However, in the hustle and bustle of planning a wedding and charting the first steps of a new life together, many couples fail to plan for their long-term financial futures. A prenuptial agreement is a way of planning for that future – both during the marriage and if and when that marriage ends, either by divorce or death.
It might seem unromantic, awkward, or pessimistic to discuss the possibility of your marriage ending, but in reality, making a plan for how you will treat each other during and after your marriage can be a profound act of care, protecting both yourself and your partner from uncertainty and unnecessary stress and conflict. There is likely no better time to consider what you’d like your long-term roles and responsibilities to each other to be than at the beginning of your life together.
Here are five reasons to consider getting a prenuptial agreement:
#1. Control Your Own Future
Many people don’t realize that marriage is itself a de facto legal and financial contract. By marrying in the state of Texas, you and your spouse bind yourself as a couple to Texas’s laws governing how your property will be disbursed in case of divorce or death. In other words, if you divorce or one of you passes away, Texas will decide what happens to your property unless you have a prenuptial agreement.
By drafting and signing a prenuptial agreement, you and your future spouse will be able to determine between yourselves what arrangements suit you best. If the laws that govern marital property, divorce, and probate in Texas aren’t to your liking, then you can customize your agreement to reflect your wishes.
#2. Protect Your Assets
The ability to customize how you and your future spouse will divide your finances during and after your marriage is particularly important if you are coming into marriage with significant assets. Many people are also getting married later in life and come into marriage with more assets than in previous generations. Business Insider reports that there has been a 62% spike in prenuptial agreements, largely driven by millennials, who are likely to get married later after they have already spent many years building their careers and financial assets.
In addition to helping ensure that you have control over what happens to your assets, a prenuptial agreement can also be an important way of delineating how you and your future spouse will handle debt. If one of you is coming into the marriage with significant debt, it can be helpful to determine how that debt will be paid back. A prenuptial agreement can also decide who will be responsible for debt incurred by one spouse during the marriage.
#3. Children from a Previous Relationship
If you have children from a previous relationship, a prenuptial agreement can help protect their inheritance. A prenup can ensure that your children’s inheritance won’t be in jeopardy if you and your future spouse eventually divorce, or if you pass away before your future spouse. However, signing a prenuptial agreement does not mean you should forego drafting a will, and it is important to update your will after any significant life event, including marriage.
A prenup can also provide clarity about how your existing children will be supported and how any future children will impact these financial arrangements. Deciding these important issues ahead of time will reduce the stress, uncertainty, and conflict around your children if your marriage ends in divorce or one of you passes away.
#4. Improve Communication with Your Future Spouse
You might worry that broaching the topic of a prenuptial agreement with your partner will indicate that you lack faith in the longevity of your relationship, but the process of talking through a prenuptial agreement and working out how you want your future to look can actually help strengthen your relationship.
Conflict about money and financial decisions is one of the top reasons people cite for seeking a divorce. The reality is that finances are a huge part of any marriage. You will need to talk through whether to combine bank accounts or maintain separate accounts. You and your future spouse may have different spending and saving habits or styles; you may be inclined to save bit by bit for large purchases, vacations, and a “rainy day” fund, but your partner might be accustomed to spending now – perhaps on credit – and trusting it will work out in the end. And if you eventually have children, financial issues will become even more complicated.
No matter what the issue, however, it’s vital that you and your future spouse establish habits of open and honest communication about money sooner rather than later. These healthy communication practices will build a foundation of trust upon which your entire marriage will depend.
As part of the process of creating a legally valid prenuptial agreement, you and your spouse must provide a full financial disclosure to each other, which means that you will share all your assets and debts with each other in full detail. A full financial disclosure is an important part of establishing that the agreement is fair and reasonable to both parties, but it can also establish trust and healthy communication habits around money that will serve you well during your marriage.
#5. Better Long-Term Financial Decisions
Many couples find that an unexpected benefit of entering into a prenuptial agreement with their future spouse is that they are primed to make better, more thoughtful long-term financial decisions during their marriage. Because they have a full picture of their current and possible future financial situation, they are more likely to have a better sense of how they want to proceed when it comes to financial matters during their marriage. They may realize that they want to pay off debt, save toward an emergency fund, invest more aggressively for retirement, or buy a home. A prenuptial agreement can help couples make these decisions with confidence.
How a Lawyer Can Help
Texas has adopted the Uniform Premarital Act (UPAA) established by the National Conference of Commissioners on Uniform State Laws, which has helped to support consistency between states. As such, there are a few hard and fast rules that govern the validity of prenuptial agreements, including:
- The agreement must be in writing.
- The agreement must be entered into with a view toward an upcoming marriage.
- The agreement must be entered into voluntarily by both parties.
- The agreement must not be “unconscionable,” meaning both parties must provide a fair and reasonable disclosure of all property and financial obligations.
A prenuptial agreement must also be fair to both spouses. An experienced and knowledgeable family law attorney can help you to ensure that your prenuptial agreement is fair, valid, and will hold up in court, if necessary.
If you are considering a prenuptial agreement for you and your future spouse, our team at the Law Offices of Mark M. Childress can help you to draft an agreement that protects your futures. Contact us online or call (817) 497-8148 today to schedule a consultation.