Recent decades have seen a gradual rise in popularity of premarital agreements or “prenups” in Texas. No longer are premarital agreements the exclusive domain of the wealthy. These days, many more groups have discovered the benefits premarital agreements can have for their marriages.
Across the state, businesses and individuals contract with each other for a variety of reasons, such as employment, philanthropic giving, professional services, purchase agreements, etc. Contracts build trust between parties by articulating each members’ rights and obligations. To save parties time and money, the Texas legislature sets some default rules by which all contracting parties must abide. Such default rules also exist for marriages. The default marriage contract is codified in the voluminous sections of the Texas Family Code. The code contains provisions for everything including spousal support, child custody, and property division.
The parties to a marital contract, however, may change some of the default rules. The Uniform Premarital Agreement Act, permits couples to substitute their own rules for those set by the Texas legislature. This allows couples to set the terms of their relationship to conform to their goals, circumstances, and values more accurately.
Many couples are discovering that the state’s default rules often fail to address their specific needs. Let’s take a look a few examples of how a premarital agreement has benefit Round Rock residents.
Under the state’s default rules, all property acquired during the marriage (with a few exceptions) is presumed to be what is called “community property.” Upon dissolution of the marriage, community property is divided equally between the spouses. This includes debts. For example, many of our Round Rock clients have expressed dissatisfaction with the state’s default rules on property division. Many of those clients were professionals who contemplated taking student loans for advanced degrees. These clients used premarital agreements to make sure each spouse retained his or her own educational debts. However, it is not just professionals who expect to incur significant debts who benefit from premarital agreements.
Premarital agreements are also becoming increasingly popular with those who have children from previous marriages. Pursuant to the default rules, when a spouse passes away, the surviving spouse is entitled to all the assets. For many couples, this default rule is exactly what they want. However, for those with children from previous marriages, the default rule could produce an outcome neither desires. In one case, both soon-to-be spouses had grown children from their previous marriages. The spouses each had substantial assets, but wanted to make sure that their own children would receive the bulk of their property in case the new marriage ended or one of the spouses passed away. The answer was a simple premarital agreement that reserved most of the spouses’ assets for their respective children, while leaving a respectable amount for the other.
We hope that the discussion above has given you a better understanding of how a premarital agreement can help strengthen the relationship you share with your partner. The Texas legislature has placed some hard limits on what premarital agreements can alter. Perhaps most important is the limit on child support. In the above example, the premarital agreement was useful as all children involved had reached the age of majority (18 years). However, that provision would be subject to challenge if it had attempted to place limits on a minor child’s right to support.
Similarly, a premarital agreement cannot contain any provision that implicates a crime. This bar on the enforceability of premarital agreements is rarely invoked, though rumors of some salacious episodes do exist. In one case, a colleague’s client had the last effective will of her lone surviving parent. The new will granted the woman a respectable inheritance but replaced an earlier will which had guaranteed her a substantially larger sum. The woman’s fiancé reportedly threatened to include an unfavorable property division provision in the premarital agreement unless she denied the existence of the new will. Fortunately, the woman’s lawyer recognized the fraudulent nature of the threat and had the agreement amended.
After learning more about premarital agreements you may have a desire to share the idea with your partner. This is a good thing. Discussing the benefits of premarital agreements with your partner can be a great team-building exercise. Still, the general misunderstanding of premarital agreements in the public mind leads many to fear raising the topic with their significant other.
Focusing on your shared goals is a productive way to introduce your partner to the benefits of premarital agreements. Whether your future entails children, investment plans, or retirement goals, a premarital agreement can be an integral part of that future success.
Additionally, couples who engaged in finding the terms that worked for them have reported positive premarital agreement experiences. We call this process “negotiating lovingly” –no single spouse should dominate the conversation.
Premarital agreements can be a great tool to help strengthen the anticipated marital relationship. Listening to your partner’s goals and reservations is the best way to ensure the couple’s collective goals are met.
If you would like to discuss the benefits a premarital agreement can produce for your anticipated marriage, contact our offices at (512) 746-7399 to speak with one of our Round Rock premarital agreement lawyers today. Additionally, if you would like to learn more from the lawyers who draft Kirker Davis, LLP’s Round Rock premarital agreements, please consult our free eBook.