A prenuptial agreement or premarital agreement establishes each spouse's property and financial rights in the event of a divorce. However, discussing the topic with your fiancé/fiancée is not the most romantic thing to do before a wedding. The following blog post is an overview of the frequently asked questions regarding prenuptial agreements in Texas.
What is a Prenuptial Agreement?
Commonly referred to as a “prenup,” a prenuptial agreement is a contract between prospective spouses made prior to the marriage. In general, this contract establishes ownership of assets—real estate, vehicles, retirement accounts, etc.—in the event of a divorce. For divorcing couples in Texas who do not have a prenup, the laws of Texas govern. A prenup ensures that in the event of a divorce, issues are addressed how the couple decides prior to marriage rather than following the standard laws. It is like rewriting the rules for yourselves. In other words, if the prenup is deemed legitimate, the judge will follow the prenup rather than the Texas laws.
What Can a Prenup Cover in Texas?
Prenuptial agreements can be narrow or broad. In Texas, a prenuptial agreement can cover many issues including, but not limited to, the following issues:
- Each spouse’s property rights and obligations
- The rights to sell, purchase, transfer, exchange, lease, mortgage, use, create a security interest in, loan, dispose of, abandon, or otherwise control or manage property
- How personal and real property are allocated in the event of a divorce or death
- Spousal support rights
- Death benefit rights from a life insurance policy
- Creating a will, trust, or estate plan to facilitate the prenup provisions
- Dispute resolution procedures
- Confirming separate property
- Changing the character of separate property to community property
How Do I Make Sure My Prenup is Enforceable in TX?
According to the Uniform Premarital Agreement Act (UPAA), an enforceable prenuptial agreement must be in writing and must be established “in contemplation of marriage,” which means the parties need to have negotiated and signed the prenup with the intent on getting married.
In contrast, prenups are legally unenforceable if one spouse did not voluntarily sign the agreement and the agreement is “unconscionable,” which means that it is substantially unfair that it would be against a judge’s interest to validate the agreement. When a spouse fails to disclose all financial rights and property owned to the other spouse, fails to waive any rights expressly and voluntarily, or lacks knowledge of a spouse's financial obligations and property interests, such circumstances can result in an unconscionable agreement.
The best way to overcome an argument of a spouse that either party did not voluntarily sign or it that the prenup is unconscionable is to make sure that an attorney represents both parties during the negotiations and drafting of the prenup.
Can I Modify or Invalidate a Prenup After Marriage?
Yes. If a married couple wants to modify or terminate an initial agreement, they must enter into a subsequent agreement, which alters or disavows the prenup. Both spouses must agree to the new agreement in writing. It is best to have counsel help you decide if revoking an agreement is in the client’s best interest. If a spouse wants to change the terms of a prenup, it is possible to revoke the prenup do a post-nuptial agreement in its place. A post-nuptial agreement is similar to a prenup, but it is entered into after the marriage.
If you are interested in creating or modifying a prenuptial agreement in McKinney or within the surrounding area, call Camille Borg Law PLLC at (469) 646-7763 or fill out our online contact form today to schedule an initial consultation.