Divorce can be one of the most stressful situations people will experience in their lifetime. In addition to the emotional strain of permanently ending a relationship, the financial pressures of dividing up your collective assets may leave both parties feeling like it is a “lose-lose situation.” For this reason, many couples are now deciding to make those decisions at a time when they get along best: before they walk down the aisle.
Marital Agreements Can Protect Both Parties
Prenuptial agreements are more common than ever, according to the American Academy of Matrimonial Lawyers. Sixty-three percent of attorneys surveyed indicated that “prenups” are on the rise, and women are among those often requesting them. In addition, 80 percent of those who requested prenups reported that they did so to protect separate property.
Separate and Community Property Under Texas Law
The Texas Family Code indicates that the “estate of the parties” be divided before the finalization of a divorce action. This estate has been interpreted to refer to only community property. Community property is generally defined as property acquired by either spouse during the marriage that is not separate property. The Texas Family Code provides that any real property, such as a house, or personal property the spouse owned prior to the marriage is considered to be separate. Additionally, property that was a gift to the person during the marriage, or that was provided in a will or estate proceeding to the person individually, will be considered separate property.
Before entering into a marriage, many people choose to enter into a prenuptial agreement to protect their financial interests in the event of a divorce. A prenuptial agreement is a type of contract entered into by individuals prior to marriage that sets out the manner in which specific financial matters will be resolved in the event of a marital dissolution. To be enforceable, however, a prenuptial agreement must follow the letter of the law. Texas courts have, on many occasions, chosen not to enforce the provisions of a prenuptial agreement due to a lack of financial disclosure by one or both of the parties.
In a prenup, parties can indicate the division of assets nearly any way they choose. The agreement can be very broad, and can indicate that each spouse is only entitled to earnings that they are personally responsible for during the marriage. Generally, as long as the agreement was entered into voluntarily by both parties, the agreement will be upheld by a court.
What to Include in a Prenup
Many couples do not take the opportunity to discuss finances and important details regarding financial goals until after marriage when certain conflicts are likely to arise. The following topics are helpful to discuss when planning to execute a prenup:
- Whether you will have joint or separate bank accounts, or both.
- Whether you will contribute equally to the household expenses, or based upon your respective incomes.
- Whether one party will expect the other to take substantial time off work to raise children.
- Whether there are certain assets you are likely to inherit in the future from a relative or loved one.
- What are each party’s habits and expectations concerning spending, debt and saving.
- Entering into a conversation about important financial matters can help clarify each person’s goals and can assist in the formation of mutual goals.
Attorney Jimmy Vaught
Marital Agreements can Protect Both Parties
If you need an attorney in the Central Texas area to draft or review a prenuptial or postnuptial agreement, you should contact the Vaught Law Firm. Texas family law attorney Jimmy Vaught — who is dual board-certified* in family law and civil appellate law — gives you personal attention and has the experience necessary to use marital agreements to protect your legal rights.
As an Austin marital agreement attorney, Jimmy has drafted many prenuptial and postnuptial agreements and reviewed many drafted by other attorneys. Since the enforceability of these agreements depends on its proper drafting and execution, it is essential you have Jimmy draft or review the agreement so it is in full compliance with the law.
In some cases, couples determine after they are married they want to enter into a contract that specifies their financial rights and obligations in the event of a divorce. In these cases, a postnuptial agreement may be drafted to carry out the wishes of the parties. These wishes often include:
- Taking responsibility for separate debt: When one spouse comes into the marriage with significant debt, a postnup can ensure responsibility for the debt remains with just that spouse.
- Protecting yourself from liability: When one spouse takes on financial risk from a business venture or investment, the other spouse can remain shielded from financial liability with the help of a carefully drafted postnup.
Postnuptial agreements can also help if you face marital troubles, but are not sure divorce is the appropriate option. A postnup can set parameters for you and your spouse to live apart for a set amount of time, allowing you to assess the status of your marriage without diving into an unwanted, or unnecessary, divorce.
Contact Us to Learn if a Marital Agreement is Right for You
If you are getting married, it is wise to consider entering into a prenup. No one plans for their wedding to end in divorce, but a prenup can provide valuable peace of mind, and can lead to fewer conflicts later on. Contact an experienced family and matrimonial law attorney today. Call us at 512-342-9980 or complete our online form to arrange a confidential consultation with our attorneys in our Austin office.