Michael L. Holland Attorney At Law
PRENUPTIAL AGREEMENTS – A prenuptial agreement is used to spell out how the marital estate is going to be treated prior to the marriage. There are several reasons why people need prenuptial agreements. Some couples come together where one of the couple has accumulated significantly more assets and property than their future spouse and want to protect it in the event of a divorce. There are also times when couples meet a little later in life after both of them have accumulated significant assets and both parties wish to protect their life savings. Additionally, a couple might be ready for marriage but one or both of them have children already and feel like they need to protect their assets for the sake of their children. Often parents make promises to their children that certain assets they own will belong to them after the parent dies, so they want to make certain they maintain the separate property nature of that property in order to avoid confusion later.
In Texas, all property that enters the marriage during the marriage is considered community property except property that is owned prior to the marriage or is received by gift or inheritance. Additionally, unless there is a prenuptial agreement in place, it is very easy to comingle assets to the point of not being able to trace the assets back to their original owner and these assets are often the source of arguments later as to which assets belong to each spouse.
A prenuptial agreement can be drafted for many purposes including, but not limited to stipulating between the parties that there will be no community property; that what’s mine is mine and what’s yours is yours and everything stays separate. Debts also come into play here so that the parties can agree that each spouse’s debts are only the responsibility of them and they will each only be responsible for their own debt. Income is also addressed such that each party can agree that their own income stays their separate property as well. Often couples will then set up joint accounts for commons bills.
The couple can also agree that they can own property together as partners which would allow them to purchase a home together and each of them would own whatever percentage they agree upon and they each can be responsible for their percentage of the debt owed on the property.
PARTITION AGREEMENTS / POSTNUPTIAL AGREEMENTS – There is virtually no difference between a partition agreement and a postnuptial agreement. Both provide the very same protection. These agreements are prepared and entered into after the marriage has already taken place and are signed between the two spouses. The reasons for entering into these agreements are the same as mentioned above under prenuptial agreements and provide the same safeguards. Additionally, these agreements can be a useful tool in shielding the other spouse and their assets after the marriage when one of the spouses is in danger of being sued and these have even proven to protect one spouse from the I.R.S. when their spouse owes large sums of money for taxes. Each situation is different, but these are examples of ways I have used to protect my clients in the past.
There are situations where perhaps one of the spouses is in business and has exposure for liabilities of the business. A partition agreement is an excellent way to shield the other spouse from losing assets as the result of litigation.
There are several ways to look at these types of agreements and obviously there needs to be frank discussion about what you are trying to accomplish. But these kinds of agreements are a legal tool you can use to clearly either set up your situation prior to entering into wedded bliss or to settle matters after already being married so that both parties are clear on what protections are in place in order to keep the peace in your blissful relationship.