Texas Prenuptial Agreements, a/k/a Premarital Agreements
Marriages often join two individuals who promise their lives to each other– for better of for worse. Oftentimes, for worse comes sooner than the couple expected. Fortunately for these couples, Texas laws outline the concept called premarital agreements that could protect the assets of each spouse. What does the Texas Code say about this? Let’s see.
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What is a Premarital Agreement?
Chapter 4 of the Texas Family Code defines a premarital agreement as, “an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage.”
The spouses can create this agreement to protect the property of each spouse. The Code defines property as, “an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.”
Premarital Agreement Formalities
Now that a premarital agreement is defined, the next question should be, how is one formed?
Chapter 4 Texas Family Code states, “a premarital agreement must be in writing and signed by both parties. The agreement is enforceable without consideration.”
What can be in the Content of the Premarital Agreement?
The state of Texas if very specific as to what can be included in the premarital agreement. The Code states,
(a) The parties to a premarital agreement may contract with respect to:
- the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
- the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- the disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- the modification or elimination of spousal support;
- the making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- the ownership rights in and disposition of the death benefit from a life insurance policy;
- the choice of law governing the construction of the agreement; and
- any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
(b) The right of a child to support may not be adversely affected by a premarital agreement.
This statute is very lenient on what can be done in terms of each spouse’s separate property and community property, with the agreement of both spouses. Spouses can contract that each spouses’ separate property is to remain separate property even if the property is accrued during the marriage.
Unenforceability of a Premarital Agreement
It is important to note that premarital agreements will become effective upon marriage and Chapter 4 Texas Family Code allows for the agreement to be amended or revoked by, “a written agreement signed by the parties. The amended agreement or the revocation is enforceable without consideration.”
What makes a premarital agreement unenforceable? Chapter 4 of the Texas Family Code states,
a) A premarital agreement is not enforceable if the party against whom enforcement is requested proves that:
the party did not sign the agreement voluntarily; or
the agreement was unconscionable when it was signed and, before signing the agreement, that party:
(A) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
(B) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
(C) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.
(b) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.
(c) The remedies and defenses in this section are the exclusive remedies or defenses, including common law remedies or defenses.
In short, the premarital agreement will not be enforceable if a party did not sign the agreement voluntarily or the party was not provided with true statements of the opposing spouse’s property and assets. It is monumentally important to have a legal professional review the terms of a premarital agreement before signing the document.