Prenuptial Agreements

Congratulations! You’re getting married, you’re in love and looking forward to your future together!
There’s so much to do to prepare for your wedding and yet in the back of your mind you’re wondering,
“Can I protect my assets … just in case?”

What is a Prenuptial Agreement?

Marriage agreements have been around for thousands of years dating back to ancient Egyptian culture. Today, a prenup – or prenupt, is a contractual way to address issues in your marriage that would otherwise be dictated by state law. In other words, you decide how you want to manage your personal and financial affairs, not the statutes of the state where you live during marriage or where you get divorced.

A prenup can also stipulate personal rights and obligations that will be met during marriage. The contract usually last for the duration of the marriage, but you can decide for it to expire at some set number of years. Note also that a prenup only becomes effective the moment you get married in ceremony.

Marriage agreements are recognized in Texas provided they are drafted properly. More importantly, having the meaningful conversations about money, retirement, intimacy, family, and children at the beginning of your relationship is the best possible way to avoid a break up in the future. If you can successfully navigate all the critical elements of how you envision your life together, your chances of success for a rock solid happy ever after increase dramatically.

Prenuptial Agreement Attorneys
Prenuptial Agreement After Marriage

Do I Need a Prenup?

Sometimes there are ways to solve an issue that don’t involve the complexity, time, or expense of drafting a contract. It’s possible that whatever you’re concerned about is already addressed in the state statues, or, can be handled by another approach. For example, if you’re concerned about protecting an inheritance, a prenup is likely not needed. Inherited property in Texas always has a separate property character before or after marriage. One party can intentionally gift away the property but it otherwise belongs solely to the person who inherited it. There may be other issues in this scenario, however, that would require a marital contract, such as, whether there will be any income generated or derived from this separate property. If so, this income is considered community property and a prenup would be necessary to keep it separate.

Another common issue for couples concerns the income earned during marriage. In Texas, if you don’t wish to share your income with your spouse during marriage, you’ll need a prenup.

These are just a couple of the many examples why you should discuss your personal circumstances about what to include in a prenup during an initial consult with Cindy.

How Much Does a Prenup Cost?

The more accurate question may be, “How much does it cost you NOT to get one?” Once you’ve established the need for a prenup the cost of drafting can vary widely.

Much depends on the complexity of the contract. I encourage you to consider the cost of drafting a prenup as if it were an insurance policy whose terms include all aspects of your life together. Just as in any insurance policy, the premium will depend in part on the value of the asset that it insures. It is a very different exercise to draft a marital contract for an estate valued at $100,000 dollars than one valued at $100 million, or more.

Whatever the cost it’s a small price to pay for security. If you were buying a house and were told that there was a 50% chance of it burning down, would you buy fire insurance? You bet.

One of the big benefits of a prenuptial agreement is that – if drafted and executed properly – it will mitigate the time and expense of litigation in the event of divorce.

Note that some attorneys charge a percentage of the assets that are the subject of the contract, others a flat fee, or an hourly rate. Be prepared to pay several thousand dollars as a starting point.

My rates are fair, competitive, and reasonable. Every prenuptial agreement is unique as is every relationship. After an initial consultation to discuss your overall expectations for the marriage contract and your personal estate plans, I’ll give you an estimate of the cost.

Prenuptial Agreement

How to Ask for a Prenuptial Agreement

One of the biggest deterrents to crafting a prenup is the challenge of knowing how to approach the topic with your beloved. There are so many myths around these contracts, their intention and validity, that it can set a negative tone for the relationship if not handled carefully from the get to. I prepare clients to broach this delicate topic by suggesting a simple prenup conversation template. Use these steps as a way to approach the subject and as a guide for working through your unique issues for your marriage.

  1. Decide in advance how you’ll offer the “why” of creating a contract. Think first in terms of the big picture. Establish a framework to fill in the details of life together.
  2. Create a relaxing atmosphere that invites open, safe conversation. Anticipate any distractions and try to avoid unexpected interference with quiet, uninterrupted blocks of time and space.
  3. Take deep breathes to relax before you meet. If you meditate, make time beforehand to do so. Visualize your loving conversation and the best possible outcome.
  4. Begin with a gentle demeanor. Set a generous intention and be aware of your tone of voice.
  5. Introduce the subject first of how to begin an estate plan to prepare for your life together.
  6. Show that your goal is to be responsible, fair, reasonable, and to value your partner and your life as a couple.
  7. Present the subject in terms of a short-term and long-term vision. For example, “I want to consider our life together in the long term, big picture. In order to do that let’s talk about our immediate goals and everyday ways to manage our finances as well as what we would do in the event of death or divorce.”
  8. Point to and suggest solutions for potential problems.
  9. Explain that each of you must have a lawyer. There are many reasons for this but it’s primarily to avoid the potential claim that one of you did not understand the terms in the contract in the event of divorce.
  10. Hold back from making any final decisions about specific terms or financial issues the first time you bring up the topic. Give yourselves time to carefully consider how to address things unique to your life together. Sleep on it.

Follow this template, and then rinse and repeat as necessary. Even if the first conversation doesn’t go well, that doesn’t mean it’s over. Try again. Your finance might even bring it up on their own.

Prenuptial Agreement

Contractual Solutions for Common Issues in a Prenup

There are many reasons for creating a prenuptial agreement. With each consideration, a thoughtful lawyer will find a unique solution just for you. The following is a list of the more common scenarios, and some ideas for how to solve some dilemmas.
Often time there is a large disparity of assets between parties. If you’re the “monied” spouse to be, consider a one-time signing amount upon marriage to the less monied spouse as part of an overall plan. Note that I said “overall” plan, meaning, you and your lawyer are considering your contract in the short and long term.
There’s a sweet spot, though, in providing for the needs of your beloved, and, inadvertently creating an incentive for divorce soon after marriage. The purpose is to balance some of the financial inequities, not to create an unintended windfall for the less monied spouse.
Life insurance is another excellent option to equalize or balance the ledger when there’s a significant disparity in income or assets. As a savings vehicle, it can provide for living expenses, ongoing maintenance of property expenses, protect entrepreneurial interests, address health & financials – short and long term, payment of college debt, guarantee child support and spousal support, and insure payment of taxes on your estate.
As a general rule, parties may want to consider determining an amount as a lump sum settlement in the event of divorce, particularly in the case of infidelity, or, as a way to establish your own terms for “fault” in the break-up of the marriage. This is a fairly common issue.
One of you may have a history of alcohol or drug use. If you have a concern about substance abuse, a sobriety clauses can be included that provides for periodic drug or alcohol testing, setting out a division of property in the event one party decides to file for divorce due to the other party’s violation of the sobriety clause.
There may be an issue of temporary spousal support in the event of divorce, especially if one of you has not worked during marriage. This amount can be stipulated in advance. Consider either a set amount or a percentage of income of the working spouse.
You might also consider creating a trust for one’s own benefit with pre-marital assets. Trusts are still the sacred cow in law land. When drafted properly, they’re very difficult to break
If you’re having difficulty with your beloved accepting the concept of a marriage contract, consider a “sunset clause” – a time when the contract will expire on its own. For example, maybe you choose to have the prenup automatically retire after ten years of marriage.
You could also consider a clause called an “escalator” or “staircase agreement.” This is a graduated lump sum amount based on the number of years in marriage. You negotiate and choose an appropriate amount.
Finally, there’s one newer type of clause that’s evolved since the social media boom. That is, to make sure that your social media posts are limited in scope, and, that you won’t share any of your confidential information with the rest of the world online. In my opinion, this is a great option to include.

Texas Prenuptial Agreement

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