You’re planning to get married and the last thing you want to think about is divorce planning. After all, you plan to be with your partner for the rest of your life. Presumably, you will love, honor and trust one another forever. As blissful as you and your partner may be right now, the reality is that half of marriages in the United States end in divorce. While you and your partner may stay happily married “until death do you part,” it’s a good idea to educate yourself about your options and have the frank conversation with your partner about the “what ifs.”
What is a prenuptial agreement and when should you get one?
A prenuptial agreement, also known as a prenup, is a legal document created by two people with the assistance of their attorneys, to decide what happens if the marriage is dissolved. The document typically outlines how assets, such as a house, bank accounts, investments and valuables are divided up.
Those who enter into a marriage at a young age typically do not have many assets. However, if one party comes from a family that is wealthy, it is not unusual for the family to want to protect their assets from the new family member in case there is a divorce.
Many times, in a second marriage (or third or fourth as the case may be), each party brings assets to the marriage. A prenup can determine that those assets remain separate or are entwined over the course of time. If one partner has children from an earlier relationship, it might be determined that the assets would go to the children in the case of death or divorce.
Since many marriages do last a long time, it is preferable to review a prenup every 5 to 10 years to reevaluate the agreement.
What is a postnuptial agreement?
There is another divorce planning agreement that has grown in popularity over the past 40 years. This is a postnuptial agreement. Once a couple is married and feel more comfortable with the idea of deciding how to split up assets if they ever decide to divorce, a postnup is drawn up by an attorney. This is a document that couples draw up for a variety of reasons, including:
- One party takes on considerable debt and does not want the other party to be liable.
- Children from a previous marriage are entitled to certain assets.
- One spouse stops working and is dependent on the other.
How is a partition agreement different?
When a married couple decides that it would be best to divide their assets into separate estates, they create a partition agreement. Basically, this is a good agreement to have not only for divorce planning purposes, but also when each party has their own business, investments and tax liabilities and wants to protect their spouse in case one or the other goes into debt or bankruptcy. Partition agreements make it more difficult for either spouse to claim any rights to the others’ estate or assume liability for the others’ debts. It is also helpful if one spouse has children and wants to leave their estate, all or part of it, to them.
Are there agreements for those who do not get married?
For those who cohabitate rather than legally marry, there may be questions as to their legal rights to property and assets, child support, and other areas where there is a long-term relationship without marriage. In this case, there is a cohabitation agreement that an attorney can create to protect the partner from any litigation should the relationship break up or if one party dies. This agreement is just as valid as any other form of divorce planning. Many unmarried couples enter into a home mortgage, parenting, business and other partnerships, and it is vital that the agreement clearly defines what happens if there is a separation of any kind.
What happens with common law marriages?
In some states, including Texas, couples who live together as though they were married, but never actually legally sign a marriage certificate, enter into what is known as a common law marriage. In Texas, a couple who lives together as a married couple under the same roof for a period of two or more years, can be considered to be in a common law marriage. However, this does not mean they have the same rights that a legally married couple.
For instance, if only one party owns property that both parties live in, the owner of the property has the right to sell it and, if the couple breaks up, the owner does not have to split the proceeds of the sale of the house with their partner. The same holds true for any other assets. It is best for couples who decide to cohabitate to enter into an agreement that will act as a legally binding document outlining how assets could be distributed in the case of a breakup or death. This is especially important if children or even pets are involved.
For the most part, if you can consider marriage to be a contractual agreement between two people then just like any other contract, it is important to consider the “what ifs” of a separation of the contract.