What is a prenuptial agreement?
A pre-marital, prenuptial, or antenuptial agreement is a contract that predetermines financial and property obligations for a couple getting married. This type of agreement is only enforceable upon marriage.
Prenuptial agreements, or “prenups,” settle financial issues and create a sense of ease about one’s financial future. Some people may think they are offensive, unromantic, or rude, but in reality, it is simply a contract that helps you designate what happens to your financial assets in case of death or divorce. This type of agreement is one way of accumulating and disposing of property rights, even when that property is not tangible.
What is the purpose of a prenuptial agreement?
The point of a pre-marital agreement is to protect your interests and to prevent one person from making decisions about the property.
Why get a prenup?
Texas has a statute governing pre-marital agreements, and because Texas is a no-fault divorce state, you want to be sure you have as much control as possible over your assets in case of divorce.
There are many reasons to get a pre-marital agreement.
The type of property you have or hope to have may dictate how you divide assets in your pre-marital agreement. Separate property is property acquired through gift, devise (property disposed of in a will), or descent (inherited property). Additionally, some personal injury recovery and gifts made after marriage may be separate property. Community property is property acquired during marriage that belongs to both spouses and is subject to be split in divorce proceedings. A pre-marital agreement can also make community property separate property or to make separate property community property. Depending on the type of property, it may be beneficial to you to divide assets and discuss how property will be split in case of death or divorce, whether that property is separate or community property.
If you have child support obligations from a previous relationship, you can use a prenup to ensure that your assets are protected for your children, from your current or prior relationship, in the event of divorce or death.
If you have property, such as an heirloom or sentimental object, that you want to remain in your family in case of death or divorce, you can keep it in your family with a prenuptial agreement.
If you earn significantly more than your partner, a prenuptial agreement is a good way to limit the amount you will be subject to pay in spousal support in case of divorce. If you earn less money than your future spouse or you plan to quit your job to raise kids, a prenuptial agreement can help you receive financial support in case of divorce and can ensure there is a fair split financially for both spouses in raising the children.
In essence, a pre-marital agreement can help you preserve your assets, apportion debt, and address anything from personal issues to pet care.
Do you need to get a prenuptial agreement?
It is entirely up to you and your future spouse. While some people may think it anticipates divorce, a pre-marital agreement really can create a sense of security and stability in a marriage.
What do you need for a prenuptial agreement to be valid?
For a pre-marital agreement to be valid, it must:
- Be voluntary
- Be made in contemplation of marriage,
- Be in writing, and
- Be signed by both parties
Pre-marital agreements are effective upon marriage and may be enforced without consideration. Consideration is a bargained for agreement to do something, or, in other words, an agreement to do something in exchange for some value.
What kind of provisions make a prenuptial agreement invalid?
- Provisions that violate criminal laws
- Provisions that violate public policy
- Provisions intended to defraud creditors of either or both spouses
- Provisions that do not fully disclose assets
What do you have to disclose in the pre-marital agreement?
Both parties need to fully disclose assets and liabilities. Many agreements waive disclosures not mentioned in the document, but failing to disclose assets fully (this includes debts) could lead to a court finding the agreement invalid.
Can you waive child support obligations in a prenuptial agreement?
You cannot include provisions that limit child support obligations. You also cannot agree that either spouse will not seek child support from the other. If there are any provisions in the agreement that court finds adverse to the child’s best interests, the court is likely to strike that provision out of the agreement.
Ultimately, the court decides how much child support is paid, so parties getting married cannot contract for a pre-set amount. Similarly, parties cannot contract to establish who gets custody of the child.
What types of provisions can you include in a pre-marital agreement?
A couple that is to be married can include many different types of clauses in the agreement, including:
- Who will manage bank accounts
- The types of income deductions claimed or tax-related issues
- How property will be distributed to the surviving spouse, including insurance benefits
- Funding for educational purposes for either spouse
- Choice of law, meaning which jurisdiction will control the agreement
- Whether mediation or arbitration is required to settle any potential disputes
- Rights and obligations related to property
- Disposition of property on separation, death or another event
- The need to draft a will
- Ownership of death benefits
- Whether after a period of time, separate property becomes marital property; and/or
- Any other matters not in violation of public policy or a statute imposing a criminal penalty
What is an infidelity clause?
An infidelity clause is a provision that is entirely optional and provides for a spouse in the unfortunate event that the other spouse is unfaithful during the marriage. This clause can trigger divorce, or in some cases, a financial penalty. In Texas, adultery is still grounds for divorce, but its up to the court’s discretion in a divorce proceeding to divide property in a fair and reasonable manner, even if an infidelity provision is violated. Adding an infidelity clause does not create a legally binding obligation for a potential spouse to not stray outside the marriage, nor does it guarantee a party will receive a greater share in the property post-divorce.
How do you dissolve a pre-marital agreement?
A couple can modify or invalidate an initial pre-nuptial agreement by entering into a new agreement, in writing, that either alters or rescinds the initial agreement. Both parties must agree to the new agreement in writing.
Alternatively, if agreement of both spouses is not possible, you can get rid of a pre-marital agreement by asserting:
- Duress (meaning someone forced you to sign)
- Unconscionability (meaning that at the time you signed, the agreement was unfair and that you did not have the power to negotiate and/or that you did not have reasonable notice about the content or listed assets before you signed)
- That you were drunk at the time of signing
- That you were otherwise incapacitated at the time of signing; or
- That you signed voluntarily but you were not aware of what you were doing
Does a prenuptial agreement ever expire?
That depends. A couple can decide whether the prenup continues for a set number of years or continues forever. Some couples elect to add a “sunset” clause, which is just a provision that states when (a specific date or number of years) the pre-marital agreement expires.
Should you use a form for a prenuptial agreement?
Using pre-made forms is rarely recommended when it comes to drafting legal agreements. While these forms may be cost-effective in the short term and are readily available online, they are not tailored to your needs. Each state has varying rules for pre-marital agreements and by signing an online form, you could be signing a provision that is either invalid or that signs away a right you want to protect. In addition, by signing a poorly drafted pre-marital agreement, you may open yourself up to liability from outside parties, as well as continued litigation and legal fees with your spouse should you divorce in the future.
What if you are getting divorced and do not have a pre-marital agreement?
Texas is a no-fault divorce state, meaning that separate property remains separate property (so long as a party can show the property was acquired through gift, through a valid will, or inheritance). Community property, or property obtained during the marriage, is generally split down the middle, with each spouse taking half in case of divorce. Community property must be split in a fair and just manner in case of divorce, so the court may impose a different split of assets.
What if the marriage itself is void and you signed a pre-marital agreement?
If a marriage is determined to be void, the agreement is unenforceable to the extent an inequitable result needs to be prevented. The main goal is avoiding an unjust result.
Do you have questions about pre-marital agreements or are you concerned about an agreement you signed? If so, call us at (817) 900-3220.