Get a PreNup: Here’s Why
It makes sense for most couples—not just the wealthy—to have a premarital agreement. 50 % of marriages end by divorce (the other half by death). The reasons for a prenup are touched upon in this Q and A..
Q: What is broken down on a prenuptial agreement?
A: A premarital agreement means an agreement between prospective spouses which is entered into before the marriage and which goes into effect on the date of marriage. It is a contract that states what is “his,” “hers” and “theirs.”
Prenups identify who owns the assets and debts, and may dictate financial support such as alimony. It can dictate the amount of time a party will remain in the home once someone asks for a separation. It also provides clarification about the assets and debts if one spouse dies.
In order to be enforceable, the parties need to provide a fair and reasonable disclosure of assets or agree to waive the disclosure. We recommend disclosure, and list the assets and large debts with their approximate values in exhibits and attach them to the prenup. The prenup also must not be too shockingly unfair to one party, for instance, waiving reasonable alimony when a spouse then would qualify for public assistance.
Q: Who needs a prenup?
A: Prenups are most beneficial to engaged couples who have children from a prior marriage, in order to continue to protect their assets for their children’s future. Prenups are also beneficial for someone who owns a business, whether it is a family-run business or one started before the marriage, in order to maintain the autonomy of the business and not have the other spouse gain ownership interest solely because of the marriage.
Q: When is the right time to get a prenup?
A: I have seen prenups done a few months in advance to just before the ceremony! If the parties do not have a prenup prior to getting married, there is another option. After the wedding date, the couple can enter into a post-nuptial agreement.. In Texas, the standard for a post nup—a marital agreement are identical to that for a prenup. As are the enforcement provisions, which presumes the pre nup or post nup is VALID.
Q: How much does a prenup cost?
A: It depends. Full disclosure of assets and liabilities, and actual representation of both parties—to insure REAL understanding of the agreement, and what it will do, is essential. So from high three figures to five figures is the range.