If you're like most people, the idea of talking about finances or existing debt with your partner is not at the top of your list. Many people find discussions about money to be rude, at best, and a turn-off or red flag at worst. This doesn't mean it's an issue to be avoided. Some people come into their relationships and pending nuptials with property that they've inherited from family or acquired on their own or through a business. Other people are business owners who have assets associated with their careers and have financial ties to business partners, creditors, etc. Another category of folks are going into a new marriage with children from a previous relationship, and attendant financial obligations such as alimony payments, child support, or pre-existing debt due to a divorce. Of these three categories of people, all of them should consider a prenuptial agreement before saying, “I do.” There are many reasons for this, but today let's consider the first of three.
The first issue in this three part blog series about prenuptial agreements is this: Texas is a community property state. It's one of nine community property states in the country, and that is important because once two individuals get married, the property they acquire, the income they create, the retirement benefits that acrue, and any other asset that should come their way during the marriage becomes community property (50% his and 50% hers). If you're a business owner, your spouse could lay claim to half of the assets associated with your business while you were married if the two of you divorce, even if you started the business before you were ever married. Does this seem fair?
Although no one wants to anticipate the end of a marriage, its important to remember that marriage is not only about two people becoming one, but it's also the moment at which two people's finances become one. If you are serious about spending your life with someone, you're going to have to face the reality of discussing finances with him or her. If you have questions or concerns and would like to know more about what is involved in the creation of a prenuptial agreement, call 713-574-8626. Our office would be glad to give you more information or schedule a consultation.
Next week, the discussion of premarital agreements continues, and we will face the reality of marriage as a financial decision.