In the past, guarding financial interests was largely a consideration for affluent individuals. Keep in mind, one person’s idea of riches may be very different from another’s. Some Houston residents may describe financial abundance as owning millions of dollars in assets, while others feel prosperity equals a hard-earned savings of $20,000 or $30,000 or a small business.
You don’t have to have a high net worth to have concerns about what happens to property. Texas judges apply community property laws to divide assets and debts during divorce disputes. Many couples create prenuptial agreements to avoid emotion-laden conflicts during a possible divorce or at the time of one spouse’s death.
Marriage may not come along until after you’ve purchased a home, set up a stock portfolio or delved into a business venture. While premarital assets generally belong to the original owner, intermingling assets after marriage can blur the lines of separate and marital property. Prenuptial agreements make those boundary lines clear and bold.
Let’s say you’ve been married in the past and have children from the marriage. It’s likely you want to preserve assets for the children to inherit. A premarital or post-nuptial agreement – a financial contract drawn up after couples marry – can set assets aside for heirs.
Financial concerns are part of every marriage. Unfortunately, the subject is so dry and uncomfortable for many people that couples don’t get around to financial discussions until the honeymoon is over. That’s when some spouses can be shocked by a husband or wife’s spending habits, hidden debts or conflicting financial goals.
Open talks about a premarital contract with the person you plan to marry allow plenty of pre-wedding time to negotiate. The more you discuss finances in detail, the fewer things attorneys will have to do when a prenuptial agreement is formalized. When you are both prepared to act, retain separate lawyers to protect individual interests.
Source: Bankrate.com, “Everything you need to know about prenuptial agreements” Jul. 29, 2014