Beyond Emotions: The Upside of Premarital Agreements

By Douglas A. Harrison Over the past 37 years, Connatser Family Law attorney Doug Harrison has helped hundreds of clients negotiate premarital agreements. We asked Doug to share some insight on the upside of premarital agreements, which can rattle emotions for some couples. Very seldom do couples come into a marriage with an equal set of assets, income earning abilities, job skills or potential inheritances – sometimes, but not often. That imbalance can create roadblocks for couples trying to negotiate and sign a premarital agreement or prenup. In addition, many young couples marrying for the first time find it difficult to wrap their arms around the concept of a premarital agreement. This is especially true for couples entering a relationship with minimal assets on the date of their marriage but with a promise for much financial growth in the future. The process can be extremely emotional for some couples, too. One party may fear that his or her future partner lacks love or trust or believes the party is marrying him or her for financial gain. While these concerns may be valid in some cases, many clients – and their partners – find that premarital agreements bring peace of mind for both sides. Why? Premarital agreements can help some couples “get on the same page” regarding their finances and avoid future disagreements about money by clarifying financial goals and terms. In fact, most family counselors I know say couples that talk about and enter into financial agreements before marriage typically end up having more successful marriages than those that do not. The collaborative approach can help marriages gain a strong foothold early on I often encourage clients to take the collaborative approach when negotiating premarital agreements. This approach enables the couple to sit down together, along with their respective collaborative attorneys, and talk about each party’s interests, goals and expectations for their marriage – both financially and otherwise. During the negotiating process, the respective sides can work through how to meet each party’s needs satisfactorily. Another benefit of the collaborative approach is couples can quickly find out if they are on financial parity with one another or not and whether they can communicate about core features of married life. Five benefits of premarital agreements in Texas In 1980, Texas voters approved an amendment to the Texas Constitution that for the first time in Texas history allowed parties to “partition and exchange” prospective income from separate property, as well as salary and wages, and other forms of income to be acquired in the future. This constitutional amendment allowed persons who were contemplating marriage to enter into prenups that were more comprehensive than ever before, because the parties could provide for the characterization, as separate or community, of property to be acquired in the future. Texas couples commonly use premarital agreements to: 1). Protect family wealth. Even if a couple enters a marriage with few assets, one of the parties may have parents with considerable wealth, and that wealth will eventually go downstream. It’s not uncommon for wealthy parents to insist their son or daughter enter into a prenup or risk having their future inheritances restricted by trust or other protective provisions. 2). Protect assets from trusts and family limited partnerships. In Texas, asset distributions from trusts and family limited partnerships may be considered community property (property divided between the two parties upon divorce). This can lead to a comingled mess when couples divorce. With a premarital agreement, parties can agree to treat those distributions as separate property instead and eliminate the risk of such distributions being considered community property. Learn...

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Did Scarlett Johansson’s Success Foil Her Marriage to Ryan Reynolds?

In a recent interview with Cosmopolitan magazine, Scarlett Johansson may have finally revealed why her marriage to fellow actor Ryan Reynolds ended in divorce. While she doesn’t specifically name Reynolds, Johansson does insinuate that competitiveness can complicate celebrity relationships. As reported by EOnline, Johansson told Cosmo, “The logistics of being with another actor are challenging. There has to be a real understanding of how you share your time, especially when two people’s careers are going at the same rate. Or even if one person is more successful than the other, that also proves challenging. There may be a competitive thing.” You don’t need to be famous like Scar-Jo to end up in divorce court According to Dallas Divorce Attorney Christine Powers Leatherberry, it’s not uncommon for marriages to fall apart when the woman is more successful than the man. As a divorce lawyer in Dallas who works with many affluent and high-profile clients, Christine often handles cases with large gaps between the divorcing parties’ incomes. “Some men feel emasculated when the wife is the breadwinner, especially when they aren’t contributing to the family in some way, such as taking on the duties of stay-at-home dad. This can spell trouble for couples in financially lopsided marriages,” says Christine. Recent research from the University of Chicago’s Booth School of Business also confirms that divorce is more likely when women earn more money. As the New York Times reports, the research revealed “there is a sharp drop in the number of male-female couples at exactly the point where the woman starts to earn more than half of household income.” The researchers also found that “the divorce rate rose by half, to about 18 percent, for couples in which the wife earned more than the husband.” More women have higher earnings today than in years past Whether women find success in higher-paying careers or come into the marriage with a sizable inheritance, the number of women who earn more than their partners has grown substantially since the 1980s. According to the Bureau of Labor Statistics, in cases where both spouses earn income, 17.8 percent of wives earned more than their husbands in 1987. That number rose to 28.2 percent in 2014. In scenarios where the husbands doesn’t work, the percentage grows from 23.7 percent in 1987 to 37.1 percent in 2014. Women who are financially secure have more options following divorce While all of the aforementioned statistics are compelling, they don’t reveal the biggest reason why women who have or earn more money are more likely to get divorced. The truth is, affluent women don’t have to worry about financial issues following divorce like their less financially stable counterparts do. As Christine explains, “The number one reason there is a higher divorce rate when women have or make more money than men is they have the ability to leave. Not only do they have the financial resources to do so, but they’re also not as concerned about life post-divorce, because their future is financially secure.” When financial disparity exists, protect assets with a premarital agreement When children aren’t involved, a premarital agreement almost always determines the outcome of a couple’s divorce. When sizeable assets and income are concerned, a prenup is essential if you want to protect your wealth. “Women who have family money in particular, should seriously consider getting a premarital agreement. For wealthy individuals, premarital agreements can protect your and your family’s wealth following death or divorce,” says Christine. Prenups also help define and protect separate property. According to Christine, “It’s critical to get a premarital agreement if you own your...

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