Prenuptial Agreement

S

Stuck_At_Work

1,000+ Posts
Two of my closest friends (a couple) are getting divorced. This has been a real eye opener to my fiancee and I (we get married in 3 months). The divorce was very unexpected and it has made us both realize how fragile and difficult a marriage can be.

It has us thinking maybe we should get a prenuptial agreement. I am a Texas resident. She is a California resident living in Texas (as a student). We will be getting married in Texas.

I purchased a home in Austin three years ago that I would like to keep as personal property. If we decide to sell that property after we get married, I would like to designate the cash value as my property.

She expects to recieve some family inheritence that she would like to designate as personal property.

I'm trying to figure out if we even need a prenuptial agreement because state laws may already protect these assets by default.

How do personal savings prior to marriage play into all of it? In a divorce, are you splitting all post-marital earnings 50/50 OR do you also include pre-marital savings?
 
It's been a few years since I had Johanson, but I will try to address a few of the issues you bring up - I'm sure I will be corrected by others.

1. Any money put into the home after you get married is fair game, so a prenup would help address your concern.

2. Inheritance, even when received during a marriage, would be her sole property. No need for a prenup on this issue.

3. What both of you had prior to marriage is still your individual property.
 
All of that is true, but you should be aware that in a divorce proceeding, there's a presumption that all property is community property. So if you want to maintain the character of the property as separate, you need to keep that property separate from other accounts and be able to prove that it is your separate property. This is especially true for something like your fiance's inheritance. Given the fungibility of money, it would be very difficult to overcome the presumption unless the inheritance funds are kept in a separate account.
 
Unless you have an obscene amount of money prenups are generally a bad idea from a marital harmony issue. When I say obscene I'm talking about multi-millions of dollars where people just acting goofy, i.e. lots of money does strange things to people. If you're talking about your basic home or condo with a maybe a few hundred grand of equity it's not worth the trouble.

I've only done two in my career (early on). Both of them involved relatively small amounts and one turned out horribly and the other was always used by one spouse against the other during arguments (both spouses wanted the prenup by the way). I no longer do them unless someone were to come to me with assets in the millions. I generally don't work with these folks anyways so it's not likely to be an issue any time soon.
 
I was decently well off before I got married, and both my wife and I thought it smart to get a prenup. After thinking about it, though, I didn't really want to start thinking about the end of my marriage before it even started.

It sucks to sit there and say, "ok if it ends in 1-5 years she gets..." "if it ends in 6-10, she gets..." etc. Then have her come back with "well I think I'm worth X, you're undervaluing me" or whatever. I mean I don't plan on this marriage EVER ending, so what's the point of the prenup. It'll only cause undue tension and stress before you even get married. If you both trust each other, you two are marrying out of love, then it shouldn't matter at all.

Sadly, the fact that you even think about stuff like "If we decide to sell that property after we get married, I would like to designate the cash value as my property. " worries me about your own marriage before it's even happened.

Anyway, we've been happily married for nearly 2-years. We sold the house I owned when I was single and have purchased our first home. And I still think that we'll be together forever.
 
the law already says that that stuff will be what you want it to be if/when you get divorced.

just make sure if you sell that house, you keep the money separated out, so that any cash proceeds and earnings from that $$$ can be traced back.
 
BTW A couple things I thought about when considering it:
1. Without a prenup it will force you to work through the problems that will arrise in a marriage. Otherwise you might just cut your losses at the first sign of trouble.

2. I never wanted to think about things like "Well we've been married 3 years and it's been ok, but if we get divorced in 2 years it will cost me a lot more, so maybe we should just end it now since chances are it will end anyway."
 
Sorry to hijack the thread but it is somewhat related. A cousin of mine is getting a divorce and our family is a little concerned with how things may end up (no one in our family has ever divorced). He bought a house 2-3 years before they were married 7 years ago. Both of his parents died within that 7 years. He paid off the house with inheritance money. Is the house value 100% his,will it have to be split 50/50 of the money after marriage, or 50/50 completely?
 
So to determine the value of a house before a couple get married, if house is owned by one, not the other...do you get an appraisal or two and average them out?

Say a house avg's to 210,000 dollars with a tax appraisal of 185,000 dollars. A man marries a woman. They do some things to the house here and there. They divorce and they sell the house for 250,000 dollars. Does this mean that the woman can only make claim to the 40,000 dollar difference in what it was valued at before they got married?

Or do they go solely by tax appraisal?

I am not planning on getting married anytime soon but am curious about this if I were. No, she is not pregnant either...oh god, jinx, jinx..no.
 
don't know much about prenups, but if you have student loans prior to getting married, if you consolidate them after marriage the debt becomes community property, even though the original debt was yours.
 
^
^

that is because the original separate debt is paid off and no loner exists. then the consolidation is just a new debt incurred after marriage.
 
^

On the last point, always seek to offset the community estate contribution claim with "rent benefit" received by spouse seeking 1/2 the increase in value.
 
Interesting. I guess, just in case, if I get married in the future I will have an appraisal done without her knowing and keep it somewhere safe, just in case. That way if and only if divorce happens and that person tries to go after the tax appraisal only, I have documentation otherwise.

That or it would be easy for me to then go by the tax appraisal and not sale value since they would try to use tax appraisal value from the past.

Just talking about this is screwy in that people who supposedly love or loved one another go to these extremes and much worse when ending a relationship. I don't know how family lawyers deal with all of this. People are capable of wicked down and dirty things and they get to witness it at it's very worst.

You guys must drink a lot. Wait, I know that two of you here do. Now I know why. I guess it would suck to be the divorcing wife of a family law attorney. She is bringing a knife to a gun fight.
 
Dude, she is going to take all your stuff.

She doesn't want the world, she just wants YOUR HALF!!!
 
i am not a lawyer.

If you are entering a marriage with moderate disparity of wealth, a prenup can probably be avoided by the permanent separation of assets for the life of the marriage. If its daddy's money, that should all be handled at his level and a prenup is completely unnecessary.

If you are entering a marriage with a disparity of income, things get trickier. my view is income earned by either spouse during marriage is for both to share, and the wealth that comes from that income should be split 50/50 in divorce. this should be agreeable to both parties. i believe the law in texas is precisely this.

if the income differences are VAST, then a prenup seems very prudent. If you make, say, $10mm per year then there truly is a concept of MY money versus MY SPOUSES money and the spouse should have zero claim to the "excess earnings" over the marriage. this situation requires pre-negotiation of terms. it is obviously very rare and in these circumstances advice is generally not sought on college football message boards so i will assume it does not apply.

i strongly agree with the poster above that getting a prenup to carve out a hundred grand of home equity is like killing a fly with a sledgehammer. it causes more collateral damage than it is worth.

caveat: if you own a business with a partner, you need to seriously consider carving this out. the last thing you need is a business hang up because your ex-wife now casts 25% of the vote. your partner may require it.
 
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