Texas Divorce Tips
One divorce attorney's reactions to family law issues.
Monday, March 16, 2009
Question from Seminary #2
Last week I spoke to the counseling class at Dallas Theological Seminary, and here's another of their questions:
2. Your opinions on prenuptial agreements? Pros/Cons?
The biggest single "pro", as I see it, is that you can greatly simplify the basic law on separate property. The law is that income (rent, dividends, interest, but not appreciation) on separate property is community property. You can agree in a pre or post nup that income on separate property is separate property, making it a lot easier to keep separate property from becoming tainted by community property claims.
Another pro is to be able to provide that contributions to your retirement account are also separate property, making things even simpler in a divorce, provided that both parties come in with roughly equal earning capability.
A general pro of prenups is to protect an earning spouse from a deadbeat spouse, such as by limiting access to alimony. I see a lot of husbands making good money, where wives feel it their right to not contribute to the economic union, due to lack of initiative (not due to disability or to a joint decision that it's necessary to stay home with the kids).
One con is that the economically weaker partner can be weaker in the marriage, making it less of a union and more of an employment contract. Especially if the stronger partner has a business which can be classified as separate property, and can thus control how much of his "reward" for ownership and labor can be distributed as community property income and how much is reinvested in his separate property.
A bigger con is that one can provide for NO community property. So there's nothing that's "ours", in many ways subverting the goal of a marital union.
2. Your opinions on prenuptial agreements? Pros/Cons?
The biggest single "pro", as I see it, is that you can greatly simplify the basic law on separate property. The law is that income (rent, dividends, interest, but not appreciation) on separate property is community property. You can agree in a pre or post nup that income on separate property is separate property, making it a lot easier to keep separate property from becoming tainted by community property claims.
Another pro is to be able to provide that contributions to your retirement account are also separate property, making things even simpler in a divorce, provided that both parties come in with roughly equal earning capability.
A general pro of prenups is to protect an earning spouse from a deadbeat spouse, such as by limiting access to alimony. I see a lot of husbands making good money, where wives feel it their right to not contribute to the economic union, due to lack of initiative (not due to disability or to a joint decision that it's necessary to stay home with the kids).
One con is that the economically weaker partner can be weaker in the marriage, making it less of a union and more of an employment contract. Especially if the stronger partner has a business which can be classified as separate property, and can thus control how much of his "reward" for ownership and labor can be distributed as community property income and how much is reinvested in his separate property.
A bigger con is that one can provide for NO community property. So there's nothing that's "ours", in many ways subverting the goal of a marital union.
Labels: community property, marital property agreement, postnuptial agreement, prenuptial agreement, separate property
posted by Hal Davis | 9:37 AM
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