Prenuptial and postnuptial agreements (“prenups” and “postnutps”) aren’t just for celebrities and the super-rich, contrary to popular belief. They’re not a sign of selfishness, nor a sign you don’t love or trust your partner. They don’t even need to be points of contention: your spouse may agree that an agreement is for the best.
Prenuptial agreements or postnuptial agreements (if you realized after exchanging vows that an agreement is a good step) are simply a feature of some couples’ responsible, well-thought-out marriages. Many in the “Millennial” generation have grown especially interested in signing prenups or postnups, but such an agreement can suit anyone.
One way to think about a prenup or postnup is as a kind of insurance policy – one that ensures that unforeseen issues in a marriage don’t snarl up one’s entire life or strain one’s whole family. To many, a prenup or postnup is just part of being circumspect.
Contact the prenup and postnup attorneys at Evans Law Group in Austin or Bastrop for help on your prenup or postnuptial agreement, or read on to learn more.
What do prenups and postnups protect, exactly?
The short answer is: just about every kind of property two people can accrue together or separately. Those include, but are not limited to, homes, vacation homes, rental property, bank accounts, retirement accounts, health savings accounts, inheritances, stock portfolios, military benefits, business assets, business investments, intellectual property (e.g. patents), cars and other vehicles, home furnishings, electronic devices, and more. In other words, virtually any property that could be contended during divorce proceedings.
Prenups and postnups also can serve to define each spouses’s debts or other obligations, so as to protect one or more or the spouses – or the entire family – from unforeseen and possibly unjust debts incurred by one of the spouses.
Prenups vs. postnups: what’s the difference?
A prenuptial agreement is an agreement protecting certain assets, ensuring they are never classified as marital property. Those assets may include a home, an inheritance, family heirlooms, a retirement account, or even intellectual property. The prenuptial agreement ensures the property reverts to its original owner if the marriage ever dissolves.
Without a prenup, any property you own is at risk of being designated as “marital property,” even if you alone brought it to the marriage. Much will depend on how the property was used and treated once you and your spouse got married. Marital property is subject to equitable distribution, which doesn’t always go the way either spouse wants it to.
Prenups may also contain additional clauses regarding alimony, child support, and the assignment of debts. They may not contain clauses about child custody, which will always be determined by the best interests of the child or children.
A postnuptial agreement is very similar to a prenup, except it gets signed after the marriage. You might sign a postnup if you recognized the value of a prenup after you said “I do,” but failed to have one signed. (By the way, we’ve written a blog post about that issue.)
Who needs a prenup or postnup?
TV may make it seem that only people with truckloads of cash and giant mansions need prenuptial agreements. That’s not the case. A prenup is important if you’ve patiently accumulated assets over many years, but you might also benefit from a prenup one even if you’re fresh out of college (for example).
For example, if your spouse has a significant amount of student loan debt you might want to be sure your spouse, and only your spouse, is responsible for that debt when the marriage dissolves, so it doesn’t become a “marital debt.” Of course, your spouse may want the same assurances about your student loan debt. This form of debt is difficult to discharge in bankruptcy and tends to follow both parties for twenty to thirty years.
What if you are getting married with the understanding that one spouse will work to put the other spouse through school in preparation for a professional career? In that case, it might be wise for the working spouse to secure the promise of alimony now in the event the marriage dissolves. Otherwise, the spouse who received the degree could end the marriage with ten times the earning power of the spouse who sacrificed or put on hold his or her own further education or other opportunities. Alimony is likely in such a case, but not guaranteed. It’s wise to make sure you’ll get something for your investment if you’re the spouse who will support a degree-seeking partner.
These days, even in one’s twenties it’s surprisingly common to own of a piece of intellectual property that could be of significant financial value later. That could be an unpublished manuscript, an app in development, a business concept, or any other tangible idea with significant potential worth. The last thing you want to do is create a situation in which the spouse you divorce gets access to royalties or licensing fees from property you created without that person’s input or support.
Often prenups are a good idea because most people get married a lot later in life than our forebears did. By the time you say “I do” you might have a modest 401K, a chunk of money paid into Social Security, and may even own a home.
Prenup and postnups don’t only protect your assets. They also protect a spouse from taking on undeserved debt.
A prenup does not need to cause a hang-up
Asking for a prenup is not a sign you don’t love your significant other. It’s not a sign you expect the marriage to fail. It’s a sign of maturity, of realism, and of planning in an age when over half of marriages end in divorce. People change and needs change.
In fact, if your intended gets angry over the thought of signing a prenup, that might be a red flag – a warning that you need to reconsider. Someone who loves you will want both people to do the right thing for the right reasons, and for it to feel right.
Prenup and postnup caveats
Sometimes judges dismiss prenups and postnups. That can happen when the agreement gives the appearance of being signed under duress, or when the terms of the agreement are inequitable to one side or the other, or when one or both parties failed to disclose all assets and debts at the time the prenup was signed.
A judge may also fail to honor an agreement that wasn’t filed properly, or that was filed without legal representation on either side. So if you plan to use either type of agreement, both you and your significant other will need your own lawyers to make it happen.
Work with Evans Law Group – located in Austin and Bastrop – on your prenup or postnup agreement
Evans Law Group has helped hundreds of Texas residents craft fair, binding prenup and postnups to protect their futures. If you’d like solid legal representation to create yours, contact us today to get started.