Prenups are no longer taboo for many couples
Based on several recent studies and what we have seen in our law practice, prenups or premarital agreements, seem to be losing their stigma, and are actually gaining in popularity. Prenups are contracts between spouses designed to protect assets, earnings and increasingly intellectual property, in the event of divorce. Numerous couples are now turning to prenups to protect themselves from any debt their partner may bring into the marriage, especially from skyrocketing student loans.
According to a survey of its members conducted by the American Association of Matrimonial Lawyers (AAML), 62 percent are seeing a general rise in the number of prenups they are being retained to develop. Fifty-one percent are seeing a specific increase in millennials preparing for marriage with prenups in hand. The top three areas most covered in today’s prenuptial contracts include “protection of property” by 78 percent of respondents surveyed, “alimony or spousal maintenance” at 74 percent, and “division of property” by 68 percent. The next three most common categories covered by prenups are “protection of the increase in value in separate property” at 64 percent, followed by “inheritance rights” at 42 percent, and 24 percent choosing “community property division.”
It is widely known that millennials are generally getting married at a later age, which may explain their desire to protect what they’ve saved or purchased before marriage. But they are not alone. Couples of all ages who are entering into second or even third marriages often want to make sure children from prior marriages and other assets are protected financially. Prenups are also being used to protect a spouse who sets aside a career to stay home with the kids. In these cases, a prenup would ensure the stay-at-home parent is adequately compensated or supported in case of a divorce.
Exploring your own prenup
Each individual should spend some time reflecting on what assets and debts he or she will be bringing into the marriage. Determine what you want to designate as “separate” property and what you may want to designate as “community property.” Also, develop a plan to pay back debt. Then, each should visit with a board certified family law attorney experienced in developing prenups to determine how a plan might or might not be legally accomplished. When you have some information, discuss what you’ve learned with your partner and develop your plan together and then, have your attorney draft the contract.
For the most part, prenups cannot include child custody or child support matters, since this runs counter to Texas divorce law. Legally speaking, a court will have the final say about what’s best for the child.
The overall concept of a prenup has its practical side, but getting down to the nitty-gritty of creating one with your finance can prove awkward. Each couple will have to approach this idea with finesse and tact, depending on who they are, what each of their pasts hold and what is important to each one moving forward.