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Deciding to get married is a time punctuated by a lot of happiness, and also a lot of planning. As couples prepare to hopefully spend their lives together a lot of planning goes into the wedding and what will come next. However, many couples do not think, or do not want to think about what will happen if the relationship does not work out and ends in divorce. However, thinking about these somber issues can be just as important as thinking about all the good and happy events to come.
If you are considering marriage and would like to talk about creating a prenuptial agreement to protect your assets in the event of a divorce, one of our Dallas prenuptial agreement attorneys is ready to help answer your questions and explain how a prenuptial agreement may be beneficial to you.
What is a Prenuptial Agreement?
You are probably loosely familiar with what a prenuptial agreement is, however, under the Texas Family Code a prenuptial agreement is called a premarital agreement and means an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage.
Sec. 4.002 of the Texas Family Code a premarital agreement must be in writing and signed by both parties. These agreements are enforceable without consideration. Consideration is a term borrowed from contract law which requires that for any contract to be enforceable there is a bargained-for exchange between the parties. Without consideration, a contract may not be enforceable, however, as the language of the Texas Family Code specifically excludes this requirement, premarital agreements do not need this component essential to most contracts.
The major effect of a prenuptial agreement only becomes apparent if the parties ever decide to divorce. A Dallas prenuptial agreement can govern the following:
- The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
- The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- The disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- The modification or elimination of spousal support;
- The making of a will, trust, or another arrangement to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The choice of law governing the construction of the agreement; and
- Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
However, it is also important to highlight some events that cannot be dictated by a prenuptial agreement under the Texas Family Code:
- A prenuptial agreement cannot waive a future spouse’s benefits under an ERISA-protected benefit plan, such as a 401k or private employer’s defined benefit pension.
- Cannot contain provisions that violate public policy or a statute imposing criminal penalties.
- Cannot be used to defraud preexisting creditors.
- Cannot have a harmful or adverse effect on the right of a child to support.
Premarital agreements are consistently becoming more common amongst people in Texas as they contemplate marriage. Indeed, prenuptial agreements may be an extremely effective legal device in the event that there is a divorce or one of the spouses dies while they are married.
What are the Benefits of a Premarital Agreement?
Premarital agreements in the past were somewhat of a rarity, however, as more and more people are entering the workforce, gaining an education, and even marrying later in life, prenuptial agreements are becoming more common. One of the reasons for such an increase in the number of prenuptial agreements is because of the property division laws in Texas.
Texas is what is known as a community property state which means that a Family Law judge who is presiding over a divorce needs only to divide property in a manner that the judge deems “just and fair.” This language allows a judge a substantial amount of latitude in deciding what division is “just and right.” A prenuptial agreement, therefore, can help determine how property will be divided in the event that a marriage ends in divorce. A prenuptial agreement offers many benefits and advantages to couples such as:
- Protects any business interests the couples may have
- Allows a person who has significant family property and assets to prevent the property from being viewed as marital property and therefore subject to division.
- Provides a sense of security and clarity in the event there is a divorce
Couples who come into a marriage with considerable assets, education, businesses, or even with children may find that a prenuptial agreement is an effective way of protecting their family property, inheritances, and even career in the event that there is a separation and divorce.
Should I get a Prenuptial Agreement?
Deciding whether or not to enter into a prenuptial agreement is a very personal decision and one that you need to consider based on your personal decision. A prenuptial agreement often goes unnoticed during the course of a marriage, however, in the event that a marriage begins to break down and eventually leads to one or both parties filing for a divorce. Some of the benefits of a prenuptial agreement include:
- Defining Separate Property – A prenuptial agreement will normally define what is to be considered separate property in the event of a divorce. This has the effect of keeping property in the hands of the person who brought it into the marriage.
- Easing tension during the divorce – It is not secret that divorce proceedings can be some of the most contentious and fiercely contested legal proceedings. That is because when you spend so much time with someone, and the relationship breaks down often people will fight over material and property they don’t really care about, but are merely trying to injure the other person. A prenuptial agreement can spell out exactly what property is to be given to who.
- Protect business interests and companies – Some couples get married and decide to open a business together, some of the most successful businesses have started that way. However, if the marriage begins to break down often the business will suffer because this would be considered community property subject to division. However, if you come into a marriage with a thriving business and then subsequently get divorced, a judge may declare that a substantial amount of the businesses assets are subject to division, therefore a prenuptial agreement can be a means of protecting your business interests
Prenuptial agreements can also protect rental properties, income, stocks, 401k’s mutual funds, as well as family heirlooms and other property in Dallas in the event of a divorce. However, prenuptial agreements are not only used in the event of a divorce but are also used in the event that one spouse dies, and protects community property from being disbursed to the departed spouse’s family or children from another marriage.
Have Questions and Are Seeking a Qualified Dallas, Texas Prenuptial Agreement Lawyer?
To set up a legal consultation about drafting, enforcing, or modifying a prenuptial agreement, call the Queenan Law Firm at (817) 476-1797. With more than 20 years of legal experience successfully representing clients throughout Texas, our Dallas prenuptial agreement attorneys are always eager to put our knowledge and skill to work for you.