Do you know what a prenup is? I'm willing to bet that you have a pretty good idea. Prenups, or pre-marital property agreements, come up pretty frequently in the media, especially when discussing the lives of newly-married or soon to be divorcing celebrities. We are led to believe that only the wealthy and influential among us enter into these types of agreements and that they serve a specific purpose for protecting the wealth of these types of people. For our purposes, we ought to ask ourselves if this is true. If it is not true, then do premarital agreements stand to improve your life or your marriage?
The simple truth is that pre-marital property agreements are not only used by the rich or wealthy. The Texas family code applies to all persons over whom the state has jurisdiction in the areas of family law. Included in the codebook are statutes regarding pre-marital property agreements. These statutes apply just as evenly to you and me as they would to any celebrity who lives in our state. What's more, these agreements do not necessarily reflect a propensity for two people to eventually get divorced.
On the contrary, pre-marital property agreements can do a great deal to help avoid divorce and problems that come on occasion in marriage. These are documents that are not negotiated upon during the heat in the intensity of a divorce but are rather negotiated to happen during the relative com and happiness of an engagement. The idea that agreeing to a prenuptial agreement causes divorce is as silly as thinking that by signing a will that you are increasing your chances of dying. While this isn't a perfect comparison, since we all are going to die at some point, a divorce is not a sure thing even if you agreed to a prenuptial agreement.
Rather, a prenuptial agreement allows for negotiation, transparent decision making, and worthwhile discussion about topics that are central to your marriage. The other thing to keep in mind is that these are topics that are often involved in divorce cases and that can lead to divorce. If you want to greatly reduce the likelihood that you and your spouse will get divorced then I could not recommend more highly discussing financial topics in general before your marriage begins. I am specifying the importance of doing so regarding financial matters because these are probably the leading cause of divorce in my experience. If you and your spouse can come to an agreement on money in your marriage then every other subject falls into place after that.
With all that said, there are some considerations for you to make before entering into a premarital agreement. I would recommend that you and your fiance have an honest discussion where these topics can be exchanged in a free flow of ideas with one another. Simply being able to talk about different subjects, some of which may be difficult for you, is a great sign for your marriage period although you may feel like you're on cloud nine during your engagement the simple truth is that marriage is not all puppy dogs and Flowers. There will almost certainly be rough patches in your marriage and your relationship will be defined by how you and your spouse deal with those rough patches.
How did you grow up thinking about money?
From having worked with many families going through a divorce I can tell you that people just like you and I develop our money habits and opinions surrounding money from an early age. While the amount of money we have to spend, invest or save changes over time many of our predispositions and opinions concerning money are formed while we are children. Before you choose to engage your fiance in a discussion regarding finances or the possibility of negotiating a premarital agreement I think it is worthwhile for you to examine how you grew up with money and how that subject was treated in your household.
For example, you may have lived in a house where money just was not discussed. This may be because money was an unpleasant subject because your family didn't have much or because your family was wealthy and money was treated as being ubiquitous or not interesting enough to talk about. Either way, if your family falls at either end of the spectrum in terms of wealth then you may be at a disadvantage because you have never heard this topic discussed in a family environment in any meaningful way. Therefore, you may need to develop tools to put in your toolbox to have a productive discussion with your spouse about this topic.
Next, you should also consider whether or not money was something that was always a stress point for your family. You did not have to grow up of modest means or in a lower income bracket for money to have been a stressful subject in your home. Many middle-class and even upper-class families suffer from stress regarding money for various reasons. I would be less concerned about how much money your parents made and be more concerned with how the subject was handled in your home. If every time a financial subject came up or our expense was on the horizon your family decided to become upset then that may tell you that you have hang-ups over money that you have not even realized.
Finally, somewhere in between these two extremes, our folks who were raised in homes where money was discussed as an important topic but was not treated like a Golden calf. Questions could be asked by children and your parents were not shy about showing you how to balance a checkbook, the importance of minimizing debt in your life, or even how to operate a family budget. Unfortunately, I don't believe most of our families fall into this last category but if yours did you maybe especially equipped to handle these sort of difficult discussions.
Or, your family may fall in between one of these groups or not be a part of any of them. Either way, I recommend that you think back on your childhood and consider what sort of money environment you grew up in and how money was handled in your household. I'm willing to bet that you can draw a direct connection between how money was handled in your house and how you view and handle money as an adult. When I began to think this way and think back on my childhood the revelations were stunning.
How do you view the world?
Of course, there are many ways to view our world and what I'm about to tell you does not mean that there are only two ways to look at our world or handle finances on a personal level. However, I think that it will be worthwhile for you to consider your viewpoint on wealth, income, opportunities, and partnerships in marriage before negotiating a premarital property agreement.
There are two ways that I would like to frame this discussion. The first would be in terms of viewing the world from an abundance or a scarcity mindset. Depending upon which outlook you incorporate into your life will inform you as to how you are likely to approach finances as a married person and to what extent you will be able to solve issues ahead of time using a premarital property agreement. There is nothing necessarily wrong with you there having an abundance or scarcity mindset. However, you should understand how you view the world from this perspective before negotiating a premarital property agreement.
Having an abundance mindset regarding your finances means that you view the world as being full of opportunity for you to earn an income and generally succeed financially. You have probably never struggled to find work if you have an abundance mindset and you typically meet challenges head-on when it comes to your personal financial life. This could be a positive for you since we are all challenged to greater or lesser extents when it comes to our finances given a long enough period.
On the other hand, if you have an abundance mindset when it comes to your finances you may also be more likely to take risks that are not necessary for you to achieve financial Wellness. The thinking could be that any rescue take could be made up with an ability to recover financially due to there being many opportunities in the world that may not be there.
Another consideration that people of an abundance mindset may incorporate into their lives is that you are always able to out-earn your bad decisions when it comes to finances. And the ability to earn an income may be able to paper over mistakes from an investing, savings, or debt perspective in the short term but ultimately you would not be able to outrun or out-earn your mistakes over the long term. An abundance mindset may give you a false impression or false hope that you can do so.
On the other hand, if you have a scarcity mindset when it comes to finances then you may believe that opportunities in the world to earn an income and earn financial independence or wealth may be much more limited. In some ways, this is a more realistic or objective view of your life and your surroundings. Of course, there are limits as to how much a person can spend, save or invest throughout their life. We all have individual circumstances that restrict us in various ways. As such, a scarcity mindset may appear to be reasonable in many regards.
Additionally, I think people with a scarcity mindset are more likely to take fewer risks and to act more prudently regarding the money that they do have. You may be less prone to spending big on items that are not necessarily in favor of saving or investing your money for a rainy day. Again, this would be a benefit on many levels of having a scarcity mindset when it comes to personal finances and wealth.
On the other hand, having a scarcity mindset may prevent you from taking advantage of opportunities that are reasonable and not a mirage. You may also have issues trusting others when it comes to finances and may be more prone to retreating inwardly when it comes to discussions about money. Having a scarcity mindset may also prevent you from engaging in dialogue with your fiancé about important subjects that could present problems in your marriage.
Whether you have an abundance, scarcity, or another hybrid type mindset when it comes to finances in the world you need to be comfortable with who you are so that you can understand what benefits or liabilities you bring to any discussion regarding a pre-marital property agreement. As you have seen, either mindset presents potential strengths and weaknesses. Depending on your circumstances you may incorporate aspects of both mindsets at various times. Certainly, living through a pandemic could lead you to have a scarcity mindset while a post-pandemic. Could cause you to take more of an abundance mindset.
Understanding the various perspectives on money, wealth building and our world at large can help you to identify why you take particular positions regarding your finances as well as how you may impact your spouse and marriage. Since pre-marital property agreements are negotiated to remove issues before marriage that deal with money this would seem to be a particularly important topic to consider as you and your fiancé discussed the possibility of negotiating this type of document.
Consider where you are financially and where you want to go
Certainly, the period before entering into a premarital property agreement should cause you to consider where you are financially speaking. Are you employed? Are you seeking employment? Do you have a job or a career? How do you plan on getting from where you are now to where you want to be in ten years? Are these even questions that you have asked yourself previously?
What about you and your fiancé? How does your perspective on finances compare to theirs? Does your fiancé have their perspective or experience regarding finances that differs a great deal from yours? What steps can you all take to improve the quality of your discussions and interaction surrounding money? Are you equipped to begin negotiation on a prenuptial agreement if that is in your best interests do you need more time to work through some of these issues into fine-tuning your lives from the perspective of finances?
Do you have long term financial goals? What has prevented you from thinking of financial goals and what do you think stands in your way of achieving those goals? These the sort of questions that I will be asking myself as you stood to get married. The answer to these questions does not necessarily lead you towards the negotiation of a premarital property agreement. What they will do is lead you towards a more honest assessment of where you are in your financial life. Incorporating your spouse into these conversations will improve the quality of both of your lives and can show you where improvements in your relationship are needed.
At the end of the day, the purpose of discussing financial topics with your fiancé is not to get rich or to be greedy. Remember that money doesn’t make a man or a woman. Money exposes who you are deep down. If you were a generous person before you had money then you will be an even more generous person after you get some money. If you were a person who spent every penny you had growing up then that is who you will likely be when you are an adult with more money to spend.
Whatever your background and whatever your predispositions are towards money you should know that you can always improve when it comes to your ability to act intentionally around this subject. For some families, simply creating a budget can be enough to drastically improve your financial outlook. For others, having discussions with a marriage therapist or counselor can lead to a more fruitful relationship. Still, others may be better off negotiating an agreement to prevent future disagreements and focus on issues that can be improved upon before tying the knot.
Questions about the material contained in today's blog post? 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 consultation six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family circumstances may be impacted by our child custody, divorce, or other family case.
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