Depending on your state in life, a divorce may mean different things for you than it would mean for another person. If you are a younger individual and have not yet had children, then your divorce’s financial aspects are more relevant to you than anything that happened to do with children. The tricky part about divorce is that it is one of those few transactions in life that directly involves your children and your money. However, if you are a millennial or a younger adult and do not yet have children, your divorce becomes somewhat more straightforward. You need only focus on your finances and other goals associated with your post-divorce life.
One way to make your divorce even simpler from a financial perspective is to determine how your financial assets will be divided up in the divorce. A prenuptial agreement or marital property agreement are the two primary vehicles that a family law attorney could recommend to you if you are interested in determining the outcome of a great deal of your divorce before your case even begins. Many financial aspects of your life, besides spousal maintenance, can be sorted out with a well-conceived and planned prenuptial agreement.
What is a prenuptial agreement? How can you and your spouse create one? How can a prenuptial agreement impact the division of Community property in your divorce? Is it a good idea for you to get a prenuptial agreement? These are the questions that I will seek to answer in today’s blog post. I want to consider what a prenuptial agreement is and how you and your spouse may benefit from having one drafted.
The basics of a prenuptial agreement
Texas family law allows two persons who plan on getting married to draft what is known as a premarital or prenuptial agreement concerning a wide range of topics that impact the marital relationship. In our culture, we hear about these documents known as prenups for short. A prenuptial agreement can take a great deal of hassle out of how your mayor’s property will be divided should you and your spouse ever get divorced. A prenuptial agreement is decided before you and your spouse are even married. This way, all of the anger and emotion surrounding the divorce process will be removed from negotiating how your property will be divided.
This is the main benefit of a prenuptial agreement, in my opinion, rather than attempting to negotiate through complex financial issues when you are already upset and not thinking as rationally as you would like if a prenuptial agreement allows you to arrange for the division of your community estate while you and your spouse are on Better terms with one another. Understanding your circumstances more clearly and not having the pressure of divorce hanging over your discussions can be a big help to you and your spouse to be.
It is recommended that you and your spouse hire a family law attorney to represent your interests if you are interested in having a prenuptial agreement drafted. It’s not that you and your spouse are going to have a knockdown, drag-out fight while attempting to negotiate this agreement. Still, it does mean that you all may have different perspectives and be coming from different places when you are trying to tackle these sometimes difficult subjects. The other thing to consider is that an attorney, in most circumstances, cannot ethically represent two persons who are technically on opposite sides of a legal matter. As such, to ensure that your interests are being represented 100% in the negotiation, I would recommend that both you and your spouse have attorneys present with you while negotiating this document.
A premarital agreement does not have to be a fancy or legally convoluted document. On the contrary, a prenuptial agreement essentially acts as a premarital contract agreed to by you and your spouse to be before the date of your marriage. There are different formats that the premarital agreement can take on. Still, the essence of a premarital agreement is that it needs to be negotiated in good faith and not be unconscionable. This means that no provision contained in the premarital agreement can be so against good faith or fair dealing that a family court judge would declare it to be unenforceable via the court in the future.
Otherwise, I envision a scenario where you and your attorney and your spouse to be in their attorney attend a mediation typesetting a lawyer helps you draw up the prenuptial agreement. You all can tell your mediator ahead of time what the issues are that you would like to be contained in the prenuptial agreement, and then that mediator can help both sides reach conclusions on the essential subjects. Once a deal can be finalized, one of the hired attorneys can put in the work to draft the prenuptial agreement.
The prenuptial agreement will need to be signed by both you and your spouse. Once it is signed, you should keep a copy handy in case you have any questions or ever want to amend the document in the future. However, once you get married, however, any amending of your premarital agreement means that you all are creating a marital property agreement. The only difference between this document and a prenuptial agreement is that you all are now married, and a prenuptial agreement can no longer be drafted.
Suppose you and your spouse get divorced at any point in the future. In that case, a copy of the prenuptial agreement should be attached to your original petition for divorce at the beginning of your case and then re-attached to your final decree of divorce at the end of your case. Exhibiting the prenuptial agreement at the beginning of your divorce will be able to show a family court judge that many of the property issues associated with their case have already been settled. By that same token, attaching the prenuptial agreement as an exhibit to your final decree of divorce will help because it is a document that will be referenced throughout the final decree of divorce. This makes it easier to flip between both documents to avoid confusion about what the prenuptial agreement holds.
Prenuptial agreements and community property
Now that we have discussed the basics of what a prenuptial agreement is in Texas and how to get one drafted, we can begin to talk about what the prenuptial agreement means if you and your spouse find yourself in the unfortunate position of getting a divorce. The key thing to understand is that Texas is a community property state. Community property law will take over when it comes to dividing up your community estate in the divorced. As such, you should be aware that absent any agreements like a prenuptial that the law of community property would determine how your community estate is divided.
In this way, a prenuptial agreement can step in and supersede the specific community property laws applied to divorce. Many people who enter into prenuptial agreements do so to sidestep and get around designations on property that would typically cause some issue with the divorce. For instance, column If there is a particular asset that you all have that would typically be characterized as community property, thus subject to division in the divorce and prefer to have it described as one of your separate properties; you may specifically outline that in your prenuptial agreement. In this way, you all can have greater autonomy over how property is divided up in your divorce.
Community property law in Texas presumes that all property owned by you and your spouse at the time of your divorce is Community property. This means that any of your assets are subject to division in your divorce, absent additional evidence to show the property belongs in one of your separate Estates. In many divorces, this is no big deal because spouses tend to agree on what asset belongs in which state. However, if you anticipate some disagreement in a divorce between you and your spouse as to which estate an asset belongs in, you may be well served to take care of this issue before your divorce even begins.
If you have a complex set of personal financial circumstances or have a large number of assets that you know will need to be divided up in your divorce, then it may be wise for you to consider a prenuptial agreement. Discussing a prenuptial agreement does not mean that you will jinx your marriage or guarantee yourself that a divorce will occur. It does mean that you are trying to be proactive about solving problems that could end up causing a great deal of harm should a divorce be necessary.
Is it a good idea for you and your spouse to have a prenuptial agreement?
One of the things that I think is beneficial about a prenuptial agreement is that it forces you and your spouse to talk to one another about finances in money. I know several married people personally and have come into contact with professionals who do not speak and cannot work together about finances. The free marital agreement can be an exercise in coordinating your goals and getting on the same page financially. If you can figure out a way to work with your spouse on finances and talk through complex issues, then your marriage will probably be happier as a result.
Another critical aspect of prenuptial agreements is that by dividing up your assets before the marriage, you can also divide up your debts. Many people who get married do not consider how debts will impact the financial state of their marriage or the circumstances surrounding their divorce. As we have already talked about, Texas is a community property state. This means that the assets and debts you acquired during your marriage are subject to division in the divorce. Credit card bills, medical debts, and student loan debts are the primary types of debt I consider. This means that even if you never took out a student loan on behalf of your spouse, their loan could theoretically be shifted to you in the divorce. Or, if no student loans have been taken out but one of you plans on taking them out alone during your marriage, it could be successfully argued that that is community property.
Finally, in this age of blended families, you all may be motivated to enter into a prenuptial agreement if you all want to divide up financial responsibilities for your children in the future. This may be especially true if one of your children has a particular need and requires ongoing medical care or financial assistance. Delineating your bowels when it comes to supporting each other’s children upon your marriage may be a wise thing to do. This does not mean that you all can necessarily prevent portions of your income from going towards the support of your spouse to be’s children from another relationship. Still, you may be able to work with your attorney to figure out ways to keep your finances separate.
Questions about Community property? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are an excellent way for you to learn more about Texas family law and the services our office provides to our clients.