It’s no secret that the honeymoon doesn’t last forever. We tackled the challenges of adjusting to married life in our last issue, but minimize those growing pains by thinking ahead and evaluating whether a pre-nuptial agreement is necessary. Maryann Sarris Brousseau, attorney with Brousseau Naftis & Massingill, answered our questions and helped us realize pre-nups aren’t as scary as we once might have thought.
D Weddings: How do you know if you need a pre-nup?
Maryann Sarris Brousseau: There are two significant misconceptions regarding pre-nuptial agreements. The first one is that only wealthy people need pre-nuptial agreements, and the second is that discussing the need for a pre-nuptial agreement starts the marriage off in the wrong way. Discussing the possibility of a pre-nuptial agreement does not mean that you do not trust your partner or you do not believe the marriage will last. To the contrary, suggesting a pre-nuptial agreement allows you and your partner the opportunity to discuss and better understand each other’s finances before the marriage.
DW: Are there ways to protect your assets without a pre-nup?
MSB: There are, but it takes consistent and thorough bookkeeping. For example, if you inherit or receive money as a gift, that is your separate property. However, once you start investing that money, the interest, dividends, rent, royalties, or any other income that the money makes is community property without a written pre-nuptial agreement. Therefore, it is very important that the income generated from the separate property never be co-mingled with the separate property asset. This can be done by creating a separate account which holds only the income from the separate property.
DW: Can a prenup ever be revoked?
MSB: A pre-nuptial agreement is a binding contract between two parties. Accordingly, it cannot be unilaterally revoked, terminated, or amended without the consent of both parties. The parties must negotiate all terms of the agreement prior to signing the agreement. There are certain circumstances that can lead to a legal basis to ask a court to set aside a pre-nuptial agreement. However, these are very complicated issues controlled by Texas statutory and case law and require an attorney’s advice and assistance.
DW: Can you give any advice for bringing up the pre-nup conversation with your partner?
MSB: The best way is to approach it as planning for the unexpected. Most people understand planning for the unexpected circumstances—we buy car insurance in case of an accident or we buy health insurance in case of an illness that requires significant medical treatment. Entering into a pre-nuptial agreement is a way for planning the distribution and allocation of assets in the case of divorce or death.
DW: What can I do if I don’t want to sign a pre-nup or my partner refuses to sign the pre-nup?
Both parties must voluntarily agree to sign a pre-nuptial agreement. If either party refuses, then a discussion of whether the marriage will go forward must take place. Given the extreme consequences of refusing to sign, it is better to contact an attorney early in the process to fully understand the consequences of signing a pre-nuptial agreement and to share your thoughts of any agreements you are willing to make and to identify what issues you absolutely would not agree to and why. A good attorney will listen to you and negotiate on your behalf to reach an agreement with which you can agree and will not cause any resentment in doing so.
DW: We hear there’s been a rise in pre-nups. Why do you think that is?
MSB: I see two main reasons in the rise of pre-nuptial agreements. First, people are waiting to marry later in life and as such, may come to the marriage with significant assets. Both parties are astute enough to understand the value a pre-nuptial agreement brings to each of them in protecting the assets they have earned and may inherit from their family. A second reason is that as people live longer, the chances are that they will marry a second time (or more). In this situation, the pre-nuptial agreement not only serves to protect the estates each party brings to the marriage (which could be significant), but it also assists in protecting the biological or adopted children of each party.