Premarital agreements are also called Prenuptial Agreements, or “Prenups”. Most couples who decide on a premarital agreement do so for one or more of the following reasons; a) there is a disparity in their assets; b) there is a disparity in the amount of debts owed; c) they want to preserve all or a portion of the premarital assets for their already existing children; and/or d) to meet financial goals, including asset protection.
The Texas Constitution defines marital (“community”) property and separate property. All income earned or property obtained after marriage (other than that gained by gift, inheritance, or certain parts of a personal injury settlement or award) is community property, unless there is a very specific legal agreement to the contrary. In order to legally change that designation, a couple needs to sign a very specific contract.
In some situations one of the spouses may have a large amount of debt going into the marriage. Texas law states that a prenuptial agreement may not be entered into with the intention of defrauding creditors. However, there is no fraud if the couple merely protects the non-debtor spouse from a debt that is not legally his/hers. The debtor spouse will continue to be liable for the debt under the law, but the non-debtor spouse’s present and future assets will not be co-mingled with the assets that are legally available to pay this pre-existing debt.
A Premarital Agreement can help clarify the couple’s financial picture, remove anxiety about potential disputes and misunderstandings and assist them in planning their financial future. Although the idea of a Prenuptial Agreement may seem “unromantic”, having a well-planned and valid agreement may provide harmony and peace of mind.
If you are considering a marriage and think that a Premarital Agreement may be appropriate, take the time to have a consultation with an attorney who has knowledge and experience in the areas of family law and estate planning. You will then be able to make an informed decision about what is best for your future.