There are good reasons why many couples should consider prenuptial agreements, even if vast estates are not involved. A soundly designed prenuptial agreement can offer stability and protection to both parties in a marriage.
When should a prenuptial agreement be considered?
They are often thought of in connection with a marriage in which one or both partners already have established careers or businesses and want to protect these premarital earnings as separate property. When one or both partners have children from a previous marriage, prenuptial agreements can again—in conjunction with a good estate plan—maintain some property or prior income as separate property that will go to their own heirs. But there can be situations in which even young people starting out in life who are about to marry may want a prenuptial agreement—to identify and protect an inheritance as separate property, for instance.
Our interest in constructing these agreements is to determine your goals in pursuing this kind of arrangement and making sure that you have a plan that achieves these goals. It makes sense for two people to work out a mutually satisfactory arrangement when they are feeling most loving towards each other, rather than leave their financial future to the mercies of Texas law, in the event of a divorce. It can often be far more expensive to establish in the course of a divorce that certain property should not be included in the “community” basket than it is to establish that property as separate and make that part of a prenuptial agreement from the beginning.
There are two important principles to consider in contemplating a prenuptial agreement. A prenuptial agreement cannot prospectively settle matters related to children, such as determining in what religion any children will be raised or who will have custody of the children in the event of a divorce. A prenuptial agreement deals with financial matters exclusively. (But you could possibly, for instance, use a prenuptial agreement to establish a college fund for prospective children to which both partners will contribute.)
Also, it is very hard to “break” a prenuptial agreement; that is, to avoid and/or change the terms during a divorce. But this is actually an argument in favor of a good prenuptial agreement: a prenuptial agreement is an important tool to use in protecting one’s separate property, and in determining marital property rights during the marriage and prospectively in the event of a divorce, because it works.