Simply stated, a prenuptial agreement, also referred to as a premarital agreement, is an agreement signed by a couple before they marry which sets forth the division of their assets in the event of a divorce.
While there is still a stigma attached to requesting or signing a prenuptial agreement, as though the couple is planning for the inevitable failure of the marriage, it is a wise choice to make when there are substantial assets involved.
How a prenup can make a couple stronger
Signing a prenuptial agreement before the marriage lessens the stress and fighting that often comes with divorce and helps to avoid the costs of litigation. As these agreements require full disclosure of all assets and debts, they provide the couple a way to take a realistic look at what each is bringing to the partnership so that there are no financial secrets discovered after the wedding. It also allows couples to understand how each handles and views money.
Who should get a prenup?
While any couple can get a prenuptial agreement, they are a prudent decision for couples with substantial differences in income and assets. Business owners should strongly consider prenuptial agreements if they want to retain their business as separate property. People that have received an inheritance may want to protect that asset so that it stays separate property. When one or both parties have children from a previous relationship a prenup can help to protect the financial future of the children.
Texas is a ‘community property’ state, which means that anything acquired during the marriage belongs to both spouses. This includes assets as well as debts like credit card debt or medical bills. A prenuptial agreement may help you to avoid taking on the debts of your spouse.