A prenuptial agreement is a contract entered into by the parties prior to a marriage or civil union. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of the marriage. They may also include terms for guardianship and the forfeiture of assets as a result of divorce on the grounds of adultery, cruelty or legal abandonment. Laws vary between states and countries on how to draft prenuptial agreements. In the United States prenuptial agreements are recognized in all fifty states, but must be drafted and executed properly.
More and more couples are signing prenuptial marriage agreements. The spouses are not just couples dealing with financial inequality or couples of great wealth. They are couples who want to put all their financial cards and related issues on the table before they walk down the aisle, often to avoid great expense and prolonged painful litigation should the marriage fail. The following is a partial list of pros regarding prenuptial agreements:
1. A premarital agreement can protect the inheritance rights of children and grandchildren from a previous marriage.
2. If you have your own business or professional practice, a premarital agreement can protect that interest so that the business or practice is not arbitrarily divided or unreasonably convoluted or subject to the control or involvement of your former spouse upon divorce.
3. If one spouse has significantly more debt than the other, a premarital agreement can protect the debt-free spouse from having to assume or be liable for the obligations of the other.
4. If you plan to give up a lucrative career after the marriage, a premarital agreement can ensure that you will be compensated for that sacrifice if the marriage does not last.
5. A premarital agreement can address more than the financial aspects of marriage, and can cover any of the details of decision-making and responsibility sharing to which the parties agree in advance.
6. A premarital agreement may limit or pre-structure, subject to court scrutiny, the amount of spousal support that one spouse will have to pay the other upon divorce.
7. A premarital agreement can protect the financial interests of older persons, persons who are entering into second or subsequent marriages, and persons with substantial wealth.
Prenuptial agreements are, at best, a partial solution to obviating some of the risks of marital property disputes in times of divorce. The following is a list of the possible pitfalls of a prenuptial agreement:
1. The agreement may require you to give up your right to inherit from your spouse’s estate when he or she dies. Under the law, you are entitled to a portion of the estate even if your spouse does not include such a provision in his or her will.
2. If you contribute to the continuing success and growth of your spouse’s business or professional practice by entertaining clients and taking care of the home, etc., thus allowing him or her to focus on professional endeavors, you may not be entitled to claim a share of the increase in value if you agree otherwise in a premarital agreement. Under the laws of many states, this increase in value would be considered divisible marital property.
3. Starting a relationship with a contract that sets forth the particulars of what will happen upon death or divorce can undermine the sense of trust one wishes for upon marriage.
4. As mentioned above, a contract can take the wind out of your emotional sails.
5. It can be difficult to accurately project into the future which potential issues should be addressed, and what may seem like an inconsequential compromise in the romantic premarital period may seem more monumental and burdensome in reality.
6. A low- or non-wage-earning spouse may not be able to sustain the lifestyle to which he or she has become accustomed during the marriage if the agreement substantially limits property division by the court or the amount of spousal support to which that spouse is entitled.
7. In the “honeymoon” stage of a relationship, one spouse may agree to terms that are not in his or her best interests because he or she is “too in love” to be concerned about the financial aspects and can’t imagine the union coming to an untimely end.
For professional legal counsel on Texas laws on prenuptial agreements in the DFW Metroplex area, contact Dallas family law attorney Mark Nacol.