You may have heard in the news recently that Bill and Melinda Gates announced that they are getting a divorce after 27 years of marriage. The couple does not have a prenuptial agreement, even though they are worth about $146 billion. So you might be wondering: If Bill Gates doesn’t need a prenuptial agreement, do I? The answer generally is, yes. So here are a few tips on why you should get a prenup, and what can go wrong if you don’t have one.
What Is a Prenuptial Agreement?
A prenuptial agreement—or “prenup,” as they are usually called—is a legally binding contract people sign before getting married. In the event of divorce, the prenup will determine how the couple’s assets will be divided. These assets can include the house, land, retirement accounts, automobiles, and accumulated wealth.
The future spouses must finalize the prenup before they get married. The terms of the prenup become effective as soon as the two parties get married. In Texas, prenuptial agreements are usually referred to as premarital agreements.
Who Should Get a Prenup?
You don’t have to be a millionaire to need a prenup in your marriage. Following are some of the conditions why it is beneficial for you to have a prenup:
- Does either person have property?
- If one partner is much wealthier than the other
- If either spouse has an existing estate they wish to secure
- Will either spouse be remarrying?
- If either spouse has children
- Does either spouse have significant debt?
You also will want to get a prenup if either spouse is remarrying. Read our blog on how a prenup shaped a successful second marriage.
Of course, this is not a complete list. If you have any doubts about whether you should get a prenup, we encourage you to talk with a family law attorney.
What Does a Prenuptial Agreement Usually Cover?
Prenuptial agreements typically focus on how the couple’s assets will be divided in the event of divorce. However, the agreement usually includes much more. Common issues include:
- Allocation of property, including homes, buildings, business, and land in the event of divorce
- Allocation of property, including homes, buildings, business, and land in the event one spouse should die
- Right to use, sell, or lease property and possessions
- Terms of alimony (also known as spousal support or maintenance
- Rights to a life insurance policy benefit in the event of death
- Issues regarding the writing of the will or setting up of a trust fund.
- Documents how household expenses will be paid
- How existing debts will be handled
- Clarifies how much each person can withdraw from the other person’s retirement savings
- Any other issues of special interest to either future spouse
Prenups Can Address Alimony in the Event of a Divorce
In Texas, alimony is referred to as “spousal maintenance.” You may also hear it referred to as spousal support If the marriage ends, one of the two parties often is expected to pay money to the former partner.
However, the law permits prospective spouses to address this topic in their prenup. For example, the couple can agree to a predetermined level of support. The prenup also can address cost-of-living adjustments or affirm that one partner will waive the right to receive alimony.
Alimony is an uncomfortable topic. Couples may not enjoy addressing all of these issues before the marriage. But it can save a lot of grief later in life, as well as a lot of lawyer fees. Spousal support is addressed in Section 8 of the Texas Family Code.
If You Have Children, the Prenup Should Cover Custody and Child Support
On the other hand, a prenup in Texas cannot address future child custody issues. The family law court makes these decisions. The Texas Family Code Section 153 states that the court must make custody decisions based on “the best interest of the child.”
Thus, when a judge is making decisions about custody and how much child support should be paid, the prenup is not likely to be very important. The Texas Family Code Section 4 discusses premarital agreements.
Many people are not aware that if one of the two parties has a change in financial circumstances after the divorce, the child support requirements can be changed. Read our blog on how to change a Texas court order for child access.
How Can I Ensure My Prenup Is Enforceable in Texas?
Texas follows the guidelines of a document called the Uniform Premarital Agreement Act (UPAA). This document helps courts determine when and how prenuptial agreements should be enforced. The UPAA also allows parties to choose which state’s marriage laws will apply in terms of division of property and spousal support
For the prenup to be valid, the agreement MUST be in writing. A verbal agreement is not acceptable. In addition, the prenup is valid only if both parties entered into it voluntarily. The terms of the prenup also cannot cause a future spouse to require government assistance.
What Are Some Reasons Why A Prenup Would Be Unenforceable?
As noted, to be legally enforceable, both parties must sign a prenup voluntarily. In addition, the prenup may be invalidated if it is “unconscionable.” This means the court determines that the terms of the prenup are grossly unfair to one of the two parties.
A prenup may be ruled “unconscionable” if one of the spouses failed to provide the other spouse with an honest and accurate disclosure of all financial obligations and property owned. The court also may invalidate the prenup of one of the two future spouses who did not have adequate knowledge of the other spouse’s financial assets and obligations. Read our blog on what prevents a prenup from being enforced.
Can I Change My Premarital Agreement After Marriage?
Yes. After getting married, the couple can create a new contract, called a postnuptial agreement. The document can modify or invalidate some or all of the terms of the initial contract. As before, the new agreement must be in writing, and both parties must voluntarily agree to sign it.
A Prenup Can Protect Both Parties if Your Marriage Ends
When two people are planning a marriage, they don’t want to think about getting a divorce. Just remember that the statistics are not on our side. : Roughly 50 percent of first marriages end in divorce, and about 60 percent of second marriages. And just in case you are considering a third marriage, the divorce rate is about 70 percent.
Without a prenup, the dissolution of your marriage can be stressful, messy, and expensive. On the other hand, having a prenup can give both of you peace of mind, potentially strengthening your marriage. And if you are one of those fortunate couples who never need your prenup, we will be very happy for you.
Two of the Best Fort Worth Divorce Attorneys
Let the award-winning family law attorneys at Sean Lynch law firm help you prepare your case. We have years of experience in Texas family law, serving parents and clients in Fort Worth, Arlington, and Tarrant County. We will use that experience to help you draft a prenuptial agreement that is fair, affordable, and easy to understand. Contact us today for a no-cost review and initial consultation, 817-668-5879.