Prenuptial agreements: an ounce of prevention

When people get engaged, their lives are full of promise. They are excited about their future together, and are looking forward to starting their new lives. Before that can happen, of course, they need to plan the wedding. They make decision after decision, picking everything from the meal and the cake to the photographer and the venue. They check off items on the list and count down to the big day.

In the midst of all the excitement, most couples don't want to think about anything ever coming between them. They may have on proverbial "blinders," assuming that, depending on the source you choose to believe, that between 40 and 50 percent of all marriages end in divorce, they'll be together for the rest of their lives. Just in case something other than death should part them, though, they could be in for a long legal battle about important decisions that must be made when a marriage ends (concerning property division, alimony and more).

Much divorce-related contention could be avoided had the couple taken one key step before marrying: signing a prenuptial agreement.

What are prenuptial agreements?

In legal terms, prenuptial agreements (commonly referred to in the shortened form "prenups") are documents signed before a couple marries that sets forth terms and conditions that should be followed in the event of a divorce. Similar action can be taken after the marriage has taken place, but those documents are instead known as "postnuptial agreements" or "partition and exchange agreements." Even though they are signed after the marriage, provided they are properly executed and are otherwise legally enforceable, postnuptial agreements can be just as helpful in a divorce.

What can prenups do?

Most often, the bulk of the verbiage contained in a prenuptial agreement focuses on the division of property after the marriage ends. Prenups can set out how particular items or assets are to be handled. For example, if one spouse came into the marriage with a valuable collection of art or classic cars, the couple's prenuptial agreement could designate that property to be kept separate from the marital estate. This means that it won't be subject to division in the event of a divorce. To learn more about how the State of Texas views prenuptial agreements, see Title 1, Subtitle B, Chapter 1, Subchapter A of the Texas Family Code, better known as the "Uniform Premarital Agreement Act."

Prenups are also useful in situations where there is a sizable difference in personal wealth between the parties, even though they can be helpful for couples of more modest economic means as well. For the very wealthy, though, prenuptial agreements can be invaluable.

Another example can be helpful to illustrate that point. Should Mary, a multi-millionaire who inherited her father's successful company, marry Ted, a blue-collar worker, their prenup could dictate the amount of Mary's wealth Ted will have access to if the marriage fails. Some prenups give a percentage (10 percent, 20 percent, etc.) that will flow to the lesser-earning spouse, while others set forth an exact amount to be paid following the divorce. The prenup can also dictate how such funds will be paid, whether in a lump sum or according to a payment schedule.

In addition, prenuptial and postnuptial/"partition and exchange" agreements can be used to protect assets for children from previous relationships of either spouse. These are particularly common in second, third or subsequent marriages where one party wants to ensure that his or her children are provided for should a divorce occur. If no prenup is present and one spouse dies, particularly if there is also no estate plan in place, his or her children might miss out on assets that will instead go to the spouse under state intestacy laws. The best - and easiest - way to prevent this is to plan ahead with a comprehensive prenuptial or postnuptial agreement in addition to a thorough estate plan.

Ever-evolving functionality

Prenups are definitely one area of the law that has kept up with the times. Traditionally, they have almost exclusively been used to address financial issues that might otherwise be disputed after a divorce, especially those involving the division of property. Nowadays, though, prenups can do much more than that.

A new trend in prenuptial agreement drafting is the inclusion of so-called "pet custody" provisions. Yes, we may love our cats, dogs, birds, fish, snakes and other pet animals, and we may treat them like we would children, but the law classifies them as property. As such, animals can be specifically accounted for in prenups. The prenup could set forth that the family dog will live with the husband in the event of a divorce, but that the wife will be allowed to visit if she desires, or vice versa.

Other creative "custody" measures could be set forth as well, including splitting the animals up (the cat goes to the wife, the dog goes to the husband, etc.), having a "joint custody"-type arrangement, or linking the animal's residence with the family home, saying that whoever gets the marital home in the divorce will assume full ownership of the pets. Believe it or not, these provisions have become popular in recent years due to an onslaught of cases around the country where divorcing couples found themselves engaged in heated legal battles necessary to decide who gets to keep the pet or pets purchased, adopted or rescued during the marriage.

Another, modern use of prenuptial/postnuptial contracts is to outline how the couple's online presence should be divvied up once the marriage ends. These types of provisions, sometimes referred to as "social media clauses" or just "social media prenups," can establish the framework for dividing up all manner of online assets, including:

  • Joint social or business networking accounts (such as those hosted by sites like Facebook, MySpace, Twitter, LinkedIn, Instagram and others)
  • Email accounts
  • Small business websites
  • Customer lists (including names, addresses and identifying information)
  • Digitally stored content like photos, e-books, downloaded music, digital movies
  • Paid subscriptions to premium services like Netflix, Amazon Prime or HuluPlus

Limitations

As powerful and versatile as they may be, even prenups have their limitations. No judge is going to enforce a document that would require criminal activity, for example. Having such language in a prenup could cause individual provisions or even the entire document to be deemed unenforceable.

In addition, though they've become "trendy" in recent years, many courts are loathe to require compliance with what are known as "lifestyle provisions" integrated into prenuptial agreements. Such clauses can dictate that a spouse maintain his or her looks, including staying in physical shape by performing a minimum amount of exercise each week or by not gaining more than 10 pounds during the course of the marriage. Some people have even tried including language regarding the minimum amount of intimacy expected during the marriage; again, though, courts often will strike down such provisions wholly or in part.

Perhaps the most important limitation on the power of prenuptial agreements is that they cannot be used to create binding child custody or visitation arrangements. Custody determinations are made according to the legal standard of the "best interests of the child," and are backed by evidence introduced to the judge at the time of the court filing. Deciding five, 10, 15 years of more ago that children who may not even be born yet will automatically live with their mother in the event of a divorce doesn't adequately protect the children, and such provisions won't be enforced. It may turn out that the judge's decision ultimately coincides with the original provision, but such a decision is definitely not dependent solely on the prenuptial agreement.

As you can see, prenups are powerful and surprisingly helpful legal tools. They can be used to protect assets, prevent disputes and proactively make arrangements for the future. To learn more about how a prenuptial agreement might be right for your Texas marriage - or if you want more information about drafting a postnuptial/"partition and exchange agreement" - contact the skilled attorneys at the law office of Teller Law Firm, P.C.