Broker Check

Pre-Nup, Post-Nup: Which is Right for Me?

July 20, 2021

First marriages are happening later and later in life and second marriages are common as well.

This means that more and more people are marrying at a time in their lives when they have meaningful assets like homes, retirement accounts, or businesses that they built up before the date of marriage.

And while most enter marriage believing that it will last forever, we know that won't be the reality for nearly half of all couples.

If you failed to plan, you may find yourself waving goodbye to half of the assets that you worked so hard to build during your single days.

So, how do you protect yourself and make any future divorce proceedings as painless as possible?

A set of Nuptial Agreements is a good place to start.

Read: Romance, Money, and the Business of Marriage

Pre-Nuptial Agreements

Most of us have heard of pre-nuptial agreements or "pre-nups".

The 2003 hit film Intolerable Cruelty, staring Catherine Zeta-Jones and George Clooney, centered around the supposedly airtight "Massey Pre-Nup".

The idea being that a pre-nuptial agreement written by Clooney's character Miles Massey was completely unbreakable.

But the film would have you believe that such agreements are only for the ultra-wealthy to protect themselves from gold diggers like Zeta-Jones' character, Marylin Rexroth.

Pop culture aside, let's break down what a pre-nup is and what it actually does.

A pre-nuptial agreement is s written contact created by you and your soon-to-be-spouse, executed before the marriage, that details the assets (and liabilities) currently owned (or owed) by each party, and specifies each parties' rights to each asset after the date of marriage.

An effectively drafted pre-nup can help you:

  • Define and document each parties' separate property
  • Shield each party from the debts of the other
  • Avoid costly arguments in divorce proceedings

Now, here's the plot twist.

Texas is a Community Property state and as such, you can't necessarily consider every i dotted or t crossed until you have a post-nuptial agreement.

Post-Nuptial Agreements

A post-nuptial agreement is a written contact created by you and your spouse, executed after the marriage, that details how property that would otherwise be deemed community is to be treated.

For example, say one party owns a small business that is only a few years old.

Over time, they expect that business to grow and for the value of the business to grow along with it.

In the event of a divorce, the party who brought the business into the marriage may find themselves paying out a hefty sum to buy out the other party's community interest in the business because the increase in value of the business would typically be deemed community in nature.

Retirement assets accrued during the marriage are also deemed community in nature unless otherwise agreed to in a post-nuptial agreement.

But why the Texas Two-Step?

Because there are certain rights and privileges that only a spouse can sign away. You must be married to surrender your rights to community property.

Which One Do I Need?

In general, if you have assets that you are bringing to the marriage that you want to be sure you can take with you from the marriage, you need a pre-nuptial agreement.

If you anticipate that an asset you currently own will grow significantly in value (like a business or retirement account), and you wish to protect that asset, then a post-nuptial agreement may be right for you.

The best thing you can do is to consult with a qualified Family Law Attorney.

Make sure you provide them with a complete list of assets (and debts), clearly outline your goals and expectations for those assets, and outline any concerns you may have.

Based on that information, they can advise you on the right combination of documents for your situation.

Read: Love & Money: Laying It All On the Table Before You Say "I Do"

A Word on Implementation

If you believe that you and your soon-to-be-spouse would benefits from either or both types of agreements, here are some tips to smooth your path.

  1. Be prepared for pushback. Telling your intended that you want a pre-nup or post-nup may come as a bit of a shock, so consider how best to broach the topic. I strongly encourage you to come from the angle that such agreements protect everyone and that you want to be transparent from the start.
  2. Give yourself ample time. This is not something to spring on your soon-to-be-spouse two weeks before the wedding. In fact, hastily drafted and signed agreements may not hold up in courts as the disadvantaged spouse may be able to claim that they signed under duress.
  3. Take a team approach. Both of you should visit the attorney. Both of you should talk about your goals and priorities, and both of you should be involved in reviewing the agreement before it is signed. Do not under any circumstances simply present your intended with a document that's already been written – you would be courting disaster.

Agreeing on how you'll divide your assets in a divorce before you are even married may seem ghoulish or pessimistic.

However, I prefer to think of it as being well prepared for an event that has a 50% chance of occurring.

In fact, making any future divorce less rancorous, expensive, and painful by preparing now is one of the most loving things you can do for your new family.

Book Your Free One-Hour Consultation