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Discussing debt with a prenuptial agreement

On Behalf of | Jan 27, 2021 | Family Law

Money is one of the most common causes of divorce in Texas, and yet there are safeguards that soon-to-be married couples can put in place. For example, a carefully worded prenuptial agreement can minimize many of the most common stressors around finances. One does not have to be exceptionally wealthy to take advantage of a prenup, either.

It might be appropriate to consider signing a prenuptial agreement when one person has more debt than the other. While there are many understandable reasons for a disparity in debt — such as student loans or unexpected medical bills — it could also indicate different attitudes toward spending. A prenuptial agreement could clearly state that debts incurred by one party after marriage are not marital property, meaning that those debts will not have to be divided during divorce.

Of course, another advantage is that a prenuptial agreement affords the opportunity to discuss these kinds of financial matters. Many people shy away from discussing uncomfortable financial details, but a prenup requires that both parties lay everything on the table. A 2019 study by TD Bank found that 27% of millennials keep financial secrets from their partners. Starting off a marriage with honesty about both people’s money situation can help avoid financial uncertainty in one’s partner.

There are many other reasons to consider a prenuptial agreement. It can also be a good idea if one person owns a business in Texas or plans to be a stay-at-home parent. Deciding whether a prenup is in one’s best interest can be a big decision to make though, so most people prefer to speak with an experienced attorney about their options.