Marital agreements are becoming increasingly more common. Spouses use a prenuptial and postnuptial to, among other things, determine how finances and property will be handled during marriage, upon divorce, or upon the death of one of the spouses. The advantages of these agreements are many, but having them drawn up correctly and comprehensively is important.
Youngberg Law Firm has extensive experience drafting marital agreements that meet the needs and circumstances of our clients. If you have questions about prenuptials or postnuptials, count on us.
What Is A Prenuptial Agreement?
Sometimes called a premarital agreement, a prenuptial or “prenup” agreement is one entered into before marriage that helps spouses determine certain property and financial issues. More specifically, they can be used to accomplish the following objectives:
- Determine which property will be separate and which will be community or marital property in the event of a divorce. This is a major reason couples choose prenuptial agreements because it helps minimize conflict and court involvement if the marriage later ends.
- Determine how alimony will be worked out in the event of a divorce. This is another major use for the prenuptial agreement. The spouses can generally decide whether, and how much, alimony will be paid if they later get divorced.
- Set boundaries on who gets to use or control property during the marriage. This may include buying, selling, or otherwise dispensing with certain assets.
- Inheritance planning in the event one of the spouses dies. You or your spouse may want to control how property will be handled after death. This can be used, for example, to prevent certain property from being inherited by the deceased spouse’s family.
- Protect the financial stability of the marriage. One spouse may enter the marriage with a significant amount of debt but not much income. A prenuptial can be used to keep the debt-free spouse’s income as separate property.
- Allocate retirement and life insurance benefits. A prenuptial agreement may be used to settle the ownership rights and disposition of these forms of property.
Besides issues that might arise in divorce or inheritance, the prenuptial is a great way to structure the spouses’ respective rights and obligations during the marriage. Parties can agree to anything not in violation of public policy.
What Can Prenuptial Agreements Not Do?
There are limits to what these instruments can accomplish. For example, these are a few of the things a prenuptial agreement cannot do:
- Have an adverse effect on child support that a parent would otherwise have to pay. Put simply, the spouses cannot agree to waive child support if they divorce, or pay less than a court might order. Some parents use prenuptial agreements to agree to provide more child support than Texas law would require, which is fine.
- Violate the child’s best interests with respect to visitation or conservatorship (custody) issues. The spouses may agree to some limits on visitation or custody if certain triggering events take place, but the courts always maintain the right to review these agreements and determine if they are in the child’s best interests.
- Defraud pre-existing creditors. You cannot use a prenuptial agreement to transfer all of your property to your future spouse in hopes of avoiding your creditors. But you may want to use the agreement to protect your spouse’s property and income from your pre-existing creditors.
Who Might Want A Prenuptial or Postnuptial Agreement?
Prenuptial agreements are commonly used where one spouse:
- Has significant property or assets prior to the marriage
- Has a significant amount of debt prior to the marriage
- Has a child from a previous marriage
- Has an inheritance they wish to protect
- Has certain property, whether significant or not, they want to keep separate
What Are The Requirements For A Prenuptial or Postnuptial Agreement?
To be valid and enforceable, the prenuptial must be:
- In writing
- Signed by both parties
- Negotiated and entered into in contemplation of marriage
- Entered into voluntarily by both spouses (no fraud, duress, or grossly unfair terms)
- Based on a full and fair disclosure of all assets before the marriage (or contain a waiver of the same)
- Without any terms that are illegal or that violate public policy
What Is A Postnuptial Agreement?
The postnuptial agreement is largely similar to the prenuptial, in that it can accomplish anything a prenuptial agreement can. The only real difference is that the prenuptial is entered into, with the same above requirements, after the marriage has begun. Some couples use them because they didn’t or couldn’t enter into a prenuptial agreement, or they may use them to alter or revoke a prenuptial agreement.
There are some cases in which spouses may want a postnuptial agreement because of circumstances that changed after they got married. For example, a spouse may develop an alcohol or drug addiction, or begin running up huge debts and gambling losses. The postnuptial can, among other things, allow the other spouse to take control of marital assets or property to prevent financial harm to the marriage.
In some cases, one spouse has committed adultery or otherwise done something to undermine the other spouse’s trust. The postnuptial can save the marriage by resolving certain property and financial issues so the parties can focus on shoring up their relationship through counseling.
One spouse may decide to embark on a risky endeavor like starting or expanding a business. The other spouse may want to know that their assets are protected from this risk, and a postnuptial is a great way to do it.
Contact A Denton County Prenuptial And Postnuptial Attorney
No one gets married thinking it may end in divorce. But we also don’t know at the time of marriage what sort of financial and personal challenges lie down the road. There are many reasons you and your spouse may want to enter into a prenuptial or postnuptial agreement. Your first step is to talk with the experienced team at Youngberg Law Firm. We can discuss your situation and let you know if one of these agreements is right for you. Give us a call today.