Mention a prenuptial agreement among a group of couples and feel the mood shift. Despite our society continuously evolving, a prenup still carries unmistakable assumptions: You don’t trust me. You think the marriage won’t last. You want to take advantage of me.
These assumptions can be understandable.
However, when done well and with the right guidance, what a prenuptial agreement actually says about a relationship is something much more interesting. It underscores that both of you are coming to this marriage as adults, with full disclosure and full clarity, and are still choosing each other.
What is a Prenuptial Agreement Actually?
A prenuptial agreement is a legal contract two people enter into before marriage that establishes how assets, debts, and financial responsibilities will be handled in the event of a divorce or death. It is negotiated up front when your relationship is at its strongest, when both or you are motivated by goodwill and clarity rather later when you may be mired in conflict.
A prenup can cover a wide range of financial matters in the event of divorce or death: how the separate property each of you brings into the marriage is treated, how assets that are acquired during the marriage will be divided, how business interests will be protected, and how any inheritance is considered. Sometimes it also contemplates provisions related to spousal support.
What a prenup generally cannot do: determine child custody or child support (Texas courts retain full authority over these), waive anyone’s rights in ways that violate Texas or Federal law, or include provisions that can be deemed unconscionable or that were obtained under duress.
Who Needs a Prenup?
Prenuptial agreements were once deemed only necessary for the wealthy. They were primarily associated with significant wealth disparities such as the classical stereotype of a wealthy partner protecting assets from their less-affluent one. This is not the case anymore.
Today, prenups are increasingly common and appropriate in a much wider range of circumstances:
- Second marriages. When one or both partners have children from a previous relationship, a prenup can protect the inheritance rights of those prior children as well as provide clarity about how the blended family’s finances will work.
- Business owners. A business that was built before or is built during a marriage can be one of the most hotly contested assets in a divorce. A prenup that addresses how the business and its assets will be valued and treated in divorce protects both the owner-spouse and the business itself.
- Substantial assets or debts. If one partner enters the marriage with significant assets, an inheritance, or on the flip side a substantial student loan or other debt, a prenup creates clarity about how all of those will be treated.
- Career sacrifices. If one partner decides to cease or pause their career in order to support the family, such as to raise children or support the other partner’s professional pursuits, a prenup can acknowledge, protect, and reward that non-financial contribution.
- Significant disparity of income potential. When the two partners have two substantially different earning potentials, a prenup can preemptively establish expectations and caveats around financial contributions and their valuation and impact in ways that feel fair to both.
- Prior divorce. If one partner has experienced the ambiguity and conflict of a prior divorce, they may simply find the clarity of a prenup reassuring.
Myth Busters
The societal and cultural mythology surrounding prenups is remarkably tenacious. Here we address some of the most common ones:
- “You already expect the marriage to fail.” Millions of people buy life insurance at a younger age without anticipating they will die prematurely. People wear seatbelts without knowing they will crash. Planning for a possibility is not the same as assuming it’s inevitability.
- “It’s not romantic.” What actually IS loving: choosing each other fully, as adults, after honest conversations about your values, your finances, and your future. Those open conversations and the clarity they provide can actually deepen your relationship rather than diminish it.
- “It only protects the one who’s rich.” Actually, a well-drafted prenup protects both partners. It gives the less-affluent partner clarity about the complete financial landscape and what they are entitled to, clarity that would otherwise only come in the middle of a divorce. It also opens the door for conversations about all ways of “contributing” to the household and how they should be valued.
- “Love is all you need, you can work it out.” Legal complexity does not depend on whether or not love is or was present. Presumably all divorcing couples loved each other at one time. The real question is if you want the terms of your divorce decided by a court or by yourselves. A prenup allows you to do that thoughtfully, in advance.
The Real Point is the Conversations Themselves
What truly experienced family law attorneys know, and most couples don’t, is that the process of negotiating a premarital agreement is just as valuable as the final legal document itself.
In order to create a prenup, the couple must openly and honestly discuss their finances, often for the very first time. Each of you must clearly articulate your values and assumptions around money, personal and marital property, careers, children, and family dynamics. You both must put real thought into what you each bring to the marriage as well as what each of you needs to feel secure in the relationship as it grows and evolves.
Couples having these types of conversations prior to marriage are usually better prepared to address and weather the financial realities of their partnership than those who don’t. The prenup becomes the by-product of a much more key process: reaching a genuine mutual understanding of each other and your plans for your life together.
It’s Never Too Late. What are Postnuptial Agreements?
Are you already married and are now regretting not having these conversations before your wedding day? You have options.
A postnuptial agreement is a legally enforceable contract entered into after marriage occurs, and it accomplishes many of the same things a prenup does. While the legal standards can be slightly different based on your jurisdiction, postnups are recognized in most states. They be a very effective way to establish clarity post-marriage, and especially may come to mind after a significant change in your financial circumstances, the launch of a new business, receiving an inheritance, or after a period of difficulty in the marriage that you as a couple has worked through. A postmarital agreement provides an opportunity to gain the same clarity and reassurance that a prenup accomplishes.
How Do I Have the Conversation?
We know that bringing up the topic of a prenup is often the hardest part of the process. So we have few suggestions for you:
- Bring it up early, don’t wait until it’s too close to the wedding. The pressure of an impending deadline makes everything harder and can also lead to later inference that there was undue pressure and coercion. It also may simply not give you the time you need to work through the process effectively and constructively.
- Start up front by stating that each person should have their own attorney. Any premarital agreement negotiated without each party having independent legal counsel is more likely to be challenged. It is also less likely to reflect both parties’ true interests, which can fester later.
- Present it as protection for both of you, not just a one-side, because it can be. “I want to know what you think about everything. I want us both to be protected. And we should have these conversations before we need to in the heat of a moment.”
- This is good practice for having difficult conversations. Reinforce that you want to know what your partner thinks about finances, careers, etc. And then listen. Express your thoughts and feelings. Find common ground, and talk through the rest. Skilled attorneys can help you work through the sticky points. The collaborative premarital agreement foster this spirit of focusing on resolutions, and you can learn conflict resolution skills in the process.
- Be sure to distance your desire for an agreement from a place of distrust. Be clear that suggesting a prenup is not a statement about your opinion about the marriage’s longevity. Rather it demonstrates your belief in planning.
- Give it plenty of time. This is not a one and done conversation.
What Prenups Ultimately Say About You as a Couple
The most enduring marriages are usually built between two people who really know themselves well, who communicate with each other honestly, and who approach commitment and conversations with both love and clarity. A prenuptial agreement that is approached thoughtfully and negotiated in good faith is evidence of two adults choosing with intentionality and open eyes to build a life together.
At Hargrave Family Law, our team helps couples navigate prenuptial and postnuptial agreements with compassion, care and clarity, advocating for the setting of a strong foundation for the marriage ahead. If this is a conversation you’re ready to have, we’d be glad to empower you and help you think it through. We’re here to help.
