Not many life milestones are as beautiful as meeting and marrying the person you love. Unfortunately, it is not uncommon for a marriage to end in a divorce. If this happens, one of the most contentious issues a couple needs to address is the division of the marital estate.
A prenuptial agreement is a binding contract that a soon-to-marry couple signs to separate marital property from personal in the event of a divorce. Done right, a prenup can benefit both parties. It is far easier to negotiate financial arrangements while you’re on good terms, rather than in the middle of a heated divorce case. To understand the essence of a prenup, it helps to start by understanding what happens if you do not have one.
So, what happens if you do not sign a prenup?
If you do not sign a prenup, Texas’ community property law will determine what happens to your assets and liabilities should your marriage end in a divorce. In simple English, any property and liability accumulated during the marriage will likely be subjected to equal division during the divorce.
In light of this, here are two reasons why having a prenup makes sense:
- You can protect your assets: If you are coming into the marriage with considerable wealth, or if you are expecting a significant inheritance, a prenup would be a great step towards ensuring that your spouse doesn’t end up with half in a divorce. The same is true if you have a business. Divorce can be a big threat to your business’ stability without a prenup to protect it.
- You can avoid saddling yourself with your spouse’s debts: Debt is an unfortunate reality of life. However, if your spouse is coming into the marriage with significant debt, then such debt should not be your responsibility when parting ways. A prenup can help limit your exposure to your spouse’s debts during the divorce.
Most people assume that having a prenup implies that the marriage will collapse at some point. However, this is not true. A valid prenup can protect your financial interests and save you from a protracted divorce.