A prenuptial agreement can be updated only so many times before it becomes a nuptial or marital property agreement. I recommend that you and your fiancé create a prenuptial agreement as close to your wedding date as possible to allow it to be as current as it can be on the date of your wedding. You should avoid a situation where you and your fiancé create a prenuptial agreement months before the wedding. So much can change in a relationship as you approach the big day. This way, you can avoid a situation where you and your fiancé update your prenuptial agreement multiple times as your circumstances change.
With that said, it is impossible to go through life and not have your circumstances change somehow. What if one of you or your fiancé gets sick? What if you get pregnant? What if one of you has a wealthy relative pass away and leave all their money to you? These are extreme examples but are nonetheless crucial to our discussion. Whether the change you undergo in your life is massive or tiny, you still need to consider what to do if you need to update your prenuptial agreement? When should you consider an update, and when is an update not necessary? These are the topics that we will be discussing today.
What to do about your prenup when you think you need a change
The thing about prenuptial agreements is that they do not expire unless you have a clause in the contract that says that they do. Something along the lines of this: this prenuptial agreement will expire within the next 90 days if we do not get married. It would look like this but would use more lawyerly language and whatnot. The point still stands you do not need to update your premarital agreement just because it is old. The prenuptial agreement would occur once you become married unless you and your spouse agree to revoke the agreement formally.
The key here is that the prenuptial agreement only goes into effect truly once you get a divorce. Many people create prenuptial agreements and then never get married. In that case, your prenuptial agreement is worth nothing and has no value or importance in terms of being legally binding. It is a remembrance of a bygone era or bygone error, whichever suits your perspective better. Don't worry about the premarital agreement setting you up for a marriage contract or anything that forces your hand in terms of getting married if you later do not want to. It is just a way for you to prepare for the eventual marriage and then divorce if that is the direction you choose to take your life.
Many people in prenuptial agreements choose to put a clause in there that's a tie or a deadline for the prenuptial agreement to expire. An example of this type of clause would be something along the lines of- "if we are still married after 30 years, this agreement will be invalid for all purposes." When you start to tinker with an agreement that you spent a great deal of time and energy creating, there is always some danger. There may be downsides and positive attributes to putting these types of clauses in a premarital agreement. It would help if you spoke to your attorney before doing so to understand those issues so that you can make a wise decision for yourself.
You may learn that it is better to update or modify your premarital agreement rather than insert one of these types of clauses. You want your premarital agreement to be something that protects your interests and that of your spouse throughout your marriage and on into divorce. The idea that a family court judge could ultimately determine issues related to your finances and those of your spouse may be a little intimidating. In most cases, the two of you should be able to decide on the course of your life in that regard rather than to put yourself at risk of a judge doing so.
A prenuptial agreement is not something greedy, rich, or conniving people do. I know that the media, movies, etc. portray prenups as something that money-hungry people engage in, but that is not the truth. The reality is that people that have highly different levels of personal wealth entering their marriages, kids before the wedding, own a business, or have debt may wish to have a prenuptial agreement to protect wealth for their children or to insulate their spouse to be from the risk of debt truthfully if two people agree on the need for a premarital agreement you and your fiancé can put just about anything not related to children into a prenup.
Keep in mind that the premarital agreement will have no importance unless you and your fiancé get married and then divorced. It is a piece of paper that has no legal significance until then. This does not mean that the document will not impact your marriage or that the two of you cannot gain peace of mind from having agreed to it. What the record ultimately means for the two of you is that you know regarding property issues, there will be no need to go before a family court judge in the future. This can significantly benefit the two of you as you make plans to get married and build a life together.
Reviewing your prenuptial agreement
Even after getting married, it is good to review the prenuptial agreement periodically. Please do not sign the document and stick it in a drawer, never to be looked at again. Instead, it will make sense for you to review the record to determine if it still fits with your current circumstances and needs. It makes a lot of sense to consider updating the document if the need arises. Many people will shy away from updating the prenuptial agreement into a marital agreement for fear of the new discussion. If you are worried about what a discussion about this subject matter could do to your marriage, that is not legal. This is a relationship issue that you ought to have examined closely.
Have you switched jobs? That could lead you to a much different position financially and may render parts of your agreement moot. A massive uptick in your retirement savings may make some agreements in your prenup, mainly out of date as far as planning after a divorce. You may choose to eliminate specific language about how to treat community property and wealth division in the event of a divorce. Your retirement account may have caught up to your spouse's, and it may be a more equitable position that you wish to focus on in your premarital agreement.
A big part of this discussion occurs if you have children. As I mentioned a moment ago, children's issues, for the most part, cannot be covered in a prenup, precisely matters related to custody and child support; however, if you or your spouse stopped working to attend to the needs of your children at home that may cause you to go back to the negotiating table to account for someone not working or having a change in income.
Additionally, you may have inserted language into your premarital agreement that no longer makes sense or is irrelevant to you or your family. Imagine having specific language in your document related to the pandemic and specific provisions about money, wealth, and savings associated with the past two years. You may have anticipated a pandemic lasting many years. However, if we see the pandemic subside and concerns about money that was pandemic related, you may want to remove any language that is no longer relevant to your life and that of your spouse.
You are trying to put yourself in a position where you do not have to follow an agreement that no longer suits your needs. We see this with some frequency in the world of family law- specifically in child custody. What orders people put in place for child custody may have made sense when your children were young. However, now that the children are older and their needs have changed, you may need to alter the language on custody or visitation. The same is true for prenuptial agreements. You do not want to be in a situation where you and your spouse are forced to reconcile your life at the time of divorce with a plan that no longer suits the two of you.
A good checkpoint for you regarding going back and reviewing your prenuptial agreement is after significant life events. Did you have a child? Have you a surgery? Lose a job? Find a job? Gain an inheritance? It may be that these life events did nothing to change your outlook on life or your prenuptial agreement. Or it may be that these events led to a shift in your life that renders the prenuptial agreement moot or unworkable based on your current circumstances. Do not run the risk of something happening to your marriage and then find out that you need to go through a prenup to get divorced that doesn't check all your boxes precisely.
Review for these things when going through your old prenuptial agreement
If you had the assistance of an attorney when drafting and negotiating a prenuptial agreement, it might occur to you that you don't know all that much about the actual document itself. That's not to say that you didn't participate in the signing and creation of the paper but that the lawyer helped fill in any gaps you had regarding knowledge and understanding of the legal issues at play. Going through the prenuptial agreement now without the help of your lawyer is sort of like having to find a friend's house that you went to a year or two ago. Only this time, you don't have someone in the passenger's seat who knows how to get there. You may be able to find your destination alone, but it's going to take you a while. You may end up wasting a lot of time making wrong turns and making mistakes that would otherwise be avoidable.
When reviewing your prenuptial agreement, the first thing that you could do is to look through the document from top to bottom. Skimming the prenuptial agreement doesn't help you that much. It is better to get a clear and complete picture of the paper by reading every word. This will also help refresh your memory and help you to remember if any other aspects of the order may require revision or removal. Yes, this is a detailed process, but it beats going through a divorce with a prenup that no longer makes sense.
Has your life and marriage changed regarding community property and separate property? Separate property may be hard to come by in a marriage for most of us. Still, if you inherited property or were gifted property during your wedding, then you may have seen your separate estate, or that of your spouse, increase in value. Changes in employment may have led to changes in your community estate and its value. If you started a business after your marriage and saw that industry take off in terms of value, then you may be in a position where your wealth is far greater than you could have ever anticipated. Does this change some aspects of your premarital agreement?
Next, the one thing that I think many people do not consider sufficiently in their prenuptial agreements and married life, in general, is debt. Debt is a significant part of many of our lives. From home loans to student loans to the credit card debt that we seem to keep around like a pet, debt can seriously change the financial complexion. With that said, I think that it is a wise idea to review your prenup for any language regarding debt. If you or your spouse have taken on debt during the marriage that you would like to insulate your spouse from then, this may be a reason to revisit your prenuptial agreement.
One of the main reasons why some people enter prenups in the first place is to allow for one spouse to have a softer landing after a divorce than they otherwise may have. Consider a situation where you entered the marriage with more personal wealth, better job prospects, a much higher salary, and an overall better outlook regarding money than your spouse. This doesn't mean that you should not get married, but it may mean that your spouse's situation needs to be considered regarding divorce. Spousal maintenance after a divorce or contractual alimony may not play out in court as you anticipate. If you and your spouse have an idea of something that appeals to you regarding these types of spousal support payments, then you should consider a revision of your prenuptial agreement.
One of the main benefits of a prenuptial agreement is circumventing the Texas laws on community property. This is true of negotiations during a divorce, as well. You and your spouse can create your reality with how property is divided at the time of your divorce. Suppose you all want something to be part of your community estate that would generally go in one of your separate estates. In that case, you can say as much likewise, if you want to be able to include an item in your different estate that would typically be considered community property, you ought to have this in your prenuptial agreement as well. Otherwise, who knows how that will shake out in a courtroom with a judge playing the final arbiter of your life and your money.
To make any changes that you have in mind, you would need to have the consent of both you and your spouse. From there, it would make a great deal of sense to have lawyers, each of you having your own, so that you can receive individualized advice just as you hopefully did when you drafted the agreement in the first place. Your best interests should be at the forefront of drafting a contract or revising. It is possible for all parties, you and your spouse, to be satisfied with what you came up with, but it takes proper planning to get there.
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 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 the world of Texas family law as well as about how your family may be impacted by the filing of a divorce or child custody case.
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