Prenuptial Agreements Are Not Just For The Extraordinarily Wealthy
This article was prepared by Robert S. Hoffman, board-certified family law attorney, who has been practicing for 31 years in Houston, and Jennie R. Smith, an attorney in the Law Office of Robert S. Hoffman, PLLC.
Many couples planning to marry never consider getting a prenuptial agreement drafted and signed before the wedding day. Often, they feel that even suggesting the idea will offend the spouse-to-be because it will seem to suggest that the partner proposing the idea already lacks faith that the marriage will last. Doesn’t it seem appallingly unromantic to propose an agreement establishing a financial arrangement in case of divorce on the very eve of one’s wedding?
Nevertheless, there are good reasons why physicians in particular, even if they are not extraordinarily wealthy, should consider a prenuptial agreement. In many cases, such an agreement can offer stability and protection to the other party in the marriage as well.
Under what circumstances is a prenuptial agreement especially important to a physician? Perhaps the partner contemplating a “prenup” is youthful, but already has an inheritance to protect. Or, if he or she is more mature and marrying for the first time, she may already have established a substantial medical practice or an interest in such a practice that she wants to protect as separate property. On the other hand, perhaps the physician is marrying for the second or third time, already has a substantial practice, and is concerned about protecting the future of any children he may already have.
Proposing a prenuptial agreement does not have to be an insult to the prospective spouse. We have advised our clients in the past as to the best way to handle this delicate task. It actually makes a lot of sense to establish the financial ground rules for your marriage instead of allowing the Texas Legislature to determine them for you. And why not establish those ground rules while the two of you are getting along well and want to set up an equitable, fair arrangement that protects each party’s financial well-being? A properly drafted prenuptial agreement can also protect one spouse from being responsible for the other spouse’s debts and may also protect a non-physician spouse from being affected by the consequences or expense of a medical malpractice case filed against the physician.
Some partners with separate established careers may decide that, during the forthcoming marriage, they will not commingle their finances at all. Rather, each will maintain separate records and pay for his/her own expenses. Or they may keep most of their finances separate, but also have a joint account to which each will contribute to cover basic household expenses. Or they may comingle most of their finances but still maintain some property or income separately.
Here’s a common situation in which a prenuptial agreement can be helpful: an older couple is marrying and one party is selling (in this case) her home and moving into her fiancé’s home. But, before she gives up her independent dwelling, she wants to make sure that she will not immediately be thrown out of her home if something happens to her spouse. She wants a prenuptial agreement that gives her some ownership interest in the home.
Prenuptial agreements may cover one specific issue or settle one potential problem, like the one described above. They need not necessarily cover the entire array of the couple’s overall finances. The prenup may, for example, establish the fact that one particular piece of property or income from a certain property that precedes the marriage should be considered separate and not part of the “community” basket. It can be very expensive at some later date to try to prove that certain property is separate during the course of a divorce or upon death in a probate court. Having both parties agree in a prenuptial agreement that the property is separate is much more efficient.
There are two very important caveats, however, to remember about prenuptial agreements: for one thing, a prenuptial agreement only concerns money. It cannot prospectively settle matters related to children. It cannot, for instance, require that children born of the marriage be raised in a certain religion, or that one spouse will automatically gain custody of any children in the event of divorce. It might be possible to provide in a prenuptial agreement for a fund to which each party will contribute to cover the costs of college for prospective offspring, but that is still essentially a financial matter.
The second caveat to remember is that it is very difficult to “break” a prenuptial agreement; that is, to change the terms of the prenuptial agreement during a divorce. The grounds for invalidating a prenup are very limited. One would have to prove, for example, that one party did not voluntarily sign the agreement, or that the agreement is unconscionable and that there was not adequate financial disclosure or a waiver of same.
If a couple does agree on a prenuptial agreement, it is best that both go into the process with eyes wide open and good legal counsel. A sound prenuptial agreement can offer benefits to both parties and start the marriage off on a solid financial footing.
This article offers general legal information not pertaining to specific, individual circumstances. No attorney-client relationship is formed with readers.