Prenuptial and postnuptial agreements are often contentious issues for couples. After all, we’re about to get married so why do we need to make plans for divorce? Isn’t that showing a lack of trust?
Honey, 50% of marriages end in divorce and that number only gets worse for second and third marriages. It’s important to live in reality while also enjoying the fruits of love and excitement for the future.
A marital agreement is just a way to provide peace of mind going into your marriage, but it’s important to understand how these agreements actually apply to the division of property acquired before and during your marriage.
How Texas Prenups Handle Community Property
True or false: You can use a prenup to dictate how community property will be distributed in the event of your separation.
Answer: FALSE (everyone hates a pop quiz but at least you had a 50% chance on this one)
This may come as a surprise, but Texas prenups are not able to include an agreement about the division of community property. The Lone Star State is a community property state which means all assets and wealth acquired during the marriage are considered “community” property owned equally by both spouses.
However, you are able to use your prenup to dictate what will and won’t be considered community property. It’s important not to neglect that key difference. Instead of attempting to dictate the division of community property, you must use your prenup to clarify what is currently separate property and what will become separate property as opposed to community property in your marriage.
Are you anticipating an inheritance from your parents when they pass away? This can be protected. Will you be deriving income from certain assets that would otherwise be considered community property? Income from separate property is considered community property so your prenup should account for this.
Ultimately, a Texas prenup handles property through specific means. The language in any marital agreement will be crucial for enforcement down the line.
How Texas Postnuptial Agreements Handle Community Property
The nuance required to execute a prenup that accounts for community property in Texas makes them a less viable option than a postnuptial agreement. Postnuptial agreements are able to handle the division of community property acquired during your marriage.
Couples often fail to recognize just how far-reaching the community property assumption is. For example, a real estate investor that owns several rental properties is able to claim those rentals as separate property if they were acquired prior to the marriage. However, the income derived from those properties during the marriage is considered community property. Both spouses have a claim to the income because it impacts their standard of living.
In a prenup, you are unable to dictate the distribution of that income. However, in a postnuptial agreement, you are able to agree on what happens to community property in the event of your separation.
Don’t Be Ridiculous, Sign the Marital Agreement
Prenuptial and postnuptial agreements are able to accomplish a variety of goals in Texas. They’re not just for rich kids who marry the girl from the podunk town.
It’s not just about asset and wealth distribution but also taking care of any stepchildren, laying the groundwork for who retains what rights, which spouse will owe/be owed alimony, etc.
Protecting the property you’ve worked so hard to acquire is often the most important element of these agreements. At Dawn King Law Group, we are able to draft and enforce Texas prenuptial or postnuptial agreements. Contact our team and give your marriage the peace of mind you both deserve.