Here are some reasons why the American Academy of Matrimonial Lawyers reported a 73 percent increase in prenuptial agreements in the five years prior to 2011:
- People are getting married later in life these days, so each party is more likely to bring separate property to the marriage.
- The sour economy of recent years has more people thinking about money issues.
- Couples are demonstrating a more realistic view of marriage, likely due to the lingering fact that about 50 percent of marriages end in divorce.
- And some individuals come to a marriage with a significant amount of debt, and the other individual wants to be protected from having to take on that debt.
So let's focus on some prenuptial agreement and property division matters that relate specifically to Texas residents.
Texas, like all states, already has a prenuptial agreement built into the state's marriage laws. Prenuptial agreements are simply adjustments to the existing rules for property division. Think of prenups as customized plans that enhance the way community and separate property are categorized.
To clarify: Texas is known as a community property state, which means the assets acquired during the marriage will be categorized as community property and thus subject to division between the spouses if the marriage ends. That is, unless a prenuptial agreement stipulates otherwise.
Separate property is the property that one spouse brings to the marriage, and separate property, if proven to be such, is not subject to division in a divorce settlement. Again, that is, unless a prenuptial agreement says otherwise.
Other kinds of separate property include inheritances received by only one spouse; gifts received by only one spouse; property owned by only one spouse prior to the marriage; and personal injury compensation awarded to only one spouse.
People use prenuptial agreements to clarify exactly what assets and debts should fall into which categories. People also use prenups to indicate what assets might be reserved for children from another marriage.
These and issues such as retirement and other investment accounts can be addressed in a prenuptial agreement, and soon-to-be newlyweds in the McKinney area will want to be aware of their options.
Source: CBS News, "Why a prenup may be right for you," Mellody Hobson, May 29, 2013