It’s called a “marital agreement,” although it looks and feels exactly like a premarital agreement and it can be useful. For example, say the wife inherits $500,000 from a parent; without a marital agreement, all the income and interest on that money is community property and may also become commingled with her separate estate if she’s not careful. A specific purpose marital agreement can say that anything she received through inheritance is hers and she can do whatever she wants with it, and that’s necessary because, absent that, the law treats all income as community, which leads to commingling and, therefore, leads to lawyer and expert fees.
A good reason to have a premarital agreement in many cases is to avoid the wealth transfer that comes with having lawyers and experts argue about everything at the time of dissolution, whether through death or divorce. In the example above, say the inheritance came in 15 years ago and there was $300,000 left, but in that time, it had commingled with other assets. It started out as an inheritance divided evenly between the parties, so it lost all its character as separate because people didn’t deal with it, or they intended for the inheritance to be used by both. That’s generally not people’s way of thinking of it but sometimes it’s reality because they didn’t know they had to do something.
Another reason people get a premarital agreement is when one spouse has a lot of debt, because you can protect yourselves from certain creditors with an agreement that eliminates community income or community property, which means the deadbeat spouse’s creditors can’t levy any of the property. The issue is that some people come in with, say, $20,000 in credit card debt and the credit card company is after whatever they can find during the marriage, including the other spouse’s earnings and community assets to recover that.
Many people in their retirement years, especially the Social Security set, specifically need to have pre-marital agreements in place before they marry, so they can deal with their assets and their families so that there isn’t no unnecessary commingling of either assets or debts that can affect retirements. There should be pre-divorce planning and estate planning at nursing homes and retirement communities; that would be big business for all of us because we are living longer. When my mother was born, the life expectancy was around 68; now, it’s about 89, and with people living longer, there are more chances for marriages and these types of agreements.
There are clients I won’t allow to hire me because I am not a lawyer who is a guided missile with my client having the joystick; I have enough judgment to tell when someone is ordering me around and what they demand will get poor results. My long experience tells me that’s a silly way to do things; when people do that, 98 percent find out they spent a whole lot of money and didn’t get the results they were looking for and were mad because of that. Someone with totally unreasonable expectations who is unable to listen to my version of reality they need to find that guy or go through the process themselves.
For more information on Establishing a Marital Agreement, an initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (214) 880-7500 today.