Getting married should be one of the happiest times of your life. Marriage is full of love and dreams and hope for the future as two people combine their lives into one. Beyond the emotional part of getting married, it also involves combining the finances and business side of a person’s life with another person.
Hopefully, the marriage lasts forever and no one will need to worry about what happens if it becomes necessary to untangle the financial matters. Statistically, approximately half of all first marriages end in divorce – and the chances of divorce are higher for second or third marriages. Like an insurance policy, the best time to plan for a break-up of the marriage is before the marriage ever happens.
A premarital agreement – or “prenup” – is a written legal contract between two intended spouses that covers mostly financial issues like property, alimony, and debts. “I’ve seen people want their prenup to cover relationship issues like frequency of intimacy, weight gain, and how often the mother-in-law can visit,” says Michelle O’Neil, senior shareholder with Dallas family law boutique firm O’Neil Wysocki, P.C. “But, the real purpose is to address the property and financial matters in the event of a future divorce.”
Here are 5 reasons why every couple should get a premarital agreement, even if they don’t think they are wealthy.
Decide the law that applies to your divorce.
When a couple gets divorced, they file in the state they live in which means that state’s laws apply to their property split, alimony obligation, and payment of debts. Michael Wysocki, managing shareholder of O’Neil Wysocki, points out, “Each state has different laws that can effect a couple in very different ways.” A premarital agreement can set out the rules a couple will follow to split up their assets and debts in the instance of a divorce.
Address alimony to be paid post-divorce.
Where one spouse earns significantly more than the other spouse, alimony may be an issue, especially in certain states. Wysocki says, “Texas has limited alimony laws, but living in a state with available alimony laws might mean a high-income-earning spouse might pay a very large amount of monthly alimony for a long period of time post-divorce.” A premarital agreement can say that no one will be paid alimony.
Talking about finances before marriage increases the likelihood of marriage success.
Arguments over money can become the root of dissension in a marriage and lead to divorce. So, talking about finances in advance of marriage can make the married couple healthier and stronger. Laying everything out on the table early on means less surprises in the future. Taking a proactive role in creating a successful financial partnership will decrease the stress in the marriage later on.
Protect your inheritance.
One spouse may have heirloom property or an inheritance that they want to keep separated from the marital finances or assets. A premarital agreement can recognize those assets in advance to ensure the fate of familial property or inheritance isn’t left up to the court system or state laws.
Protect one spouse from the other spouse’s debts.
Debt is an unfortunate reality of life and money. Many spouses bring debt into the marriage and often spouses, either together or individually, incur debt during the marriage. In a divorce, debt isn’t necessarily allocated evenly between partners. A prenup can limit one spouse’s exposure to the other’s debt in case of divorce. The agreement can outline the separate debts going into the marriage and address a clear division in the event of divorce.
For anyone getting married, a prenup makes good sense. It shows the intended spouses are being emotionally genuine going into the marriage, being open about financial status, needs, and concerns from the outset.
O'Neil Wysocki
5323 Spring Valley Rd #150
Dallas, TX 75254
(214) DIVORCE | (214) 306-7830
www.OWLawyers.com
