Marriage is not only a serious personal and romantic relationship but is typically the most significant financial and legal arrangement we enter. Unlike business relationships, however, many spouses do not enter a contract. A prenuptial agreement is an important arrangement that can set expectations for married couples and help them deal with issues such as property division if they ever divorce.
The advantages of prenuptial agreements are not restricted to wealthy couples because all married couples enter an important legal relationship. Marriage and divorce can become complicated even if spouses have the same amount of savings and assets. Prenups can help you establish how this relationship can end.
This agreement becomes even more important over time because spouses commingle their separate and marital property, especially if they purchase joint assets like homes and vehicles with their separate finances. Prenuptial agreements can establish separate and joint ownership of property and how it will be divided.
Otherwise, couples may have to engage in potentially expensive and acrimonious negotiations and obtain proof of ownership. A judge may also impose a decision under Texas’ community property laws which require the equal division of most assets acquired during their marriage.
A prenuptial agreement can serve as a financial planning tool and set boundaries for married couples because they must be transparent about their finances when discussing and entering these agreements. During this process, couples should have serious conversations about their spending habits, and saving expectations.
A prenuptial agreement may also stimulate discussions on how spouses will conduct their financial activities, whether they will have joint assets, how much each spouse will contribute to joint assets, agree on responsibility for expenses and debt, and whether they file joint or separate income tax returns.
Prenuptial agreements could provide other advantages such as protecting a business and addressing the rights of children from an earlier relationship. Each spouse should have their own attorney assist them with negotiating and drafting these agreements.