Many couples in Texas decide to sign premarital or prenuptial agreements before marriage. These agreements define and, presumably, change the way Texas law would treat the rights spouses have to property in the event of divorce or death of either spouse. As with any written contract, premarital agreements are binding on the spouses. Texas law makes it very difficult to undo these agreements. So, a potential spouse should seek legal advice to understand the nature of any agreement he or she intends to sign.
The Premarital Agreement Process
The process of entering a premarital agreement involves several steps.
What Can Be Included in a Premarital Agreement?
Texas law allows potential spouses wide latitude in drafting their premarital agreements. Since Texas is a community property state, any property or debt acquired during the marriage – including income received from separate property – generally belongs to the community estate. Premarital agreements often modify or eliminate community property rights. Premarital agreements regularly include the following:
- An agreement that the spouses will not create any community property.
- An agreement that both parties waive the right to spousal support.
- An agreement that one or both spouses will be responsible for certain debts.
- An agreement that all income from separate property owned by a spouse will be that party’s separate property during the marriage.
- An agreement that one spouse will “vest” in a certain amount of property belonging to the other spouse, based on length of marriage.
- How property will be divided upon divorce or death.
There are some limits on what can be included. A premarital agreement cannot limit a spouse’s right to child support. These decisions are determined at the time of divorce based on the best interest of the children. A premarital agreement also cannot defraud third-party creditors.
How Can a Premarital Agreement Be Challenged in Texas?
Premarital agreements are presumed to be enforceable, and, unlike other contracts, no consideration is required. Texas only allows two very narrow ways to challenge a premarital agreement: (1) that the agreement was not “voluntarily” signed, or (2) that the agreement was “unconscionable” when signed.
A premarital agreement will be “voluntarily” signed if an intended spouse does so out of his or her own free will. The court will consider factors such as whether one party was represented by counsel, misrepresentations made in procuring the agreement, and whether information has been withheld. However, a threat to not enter a marriage is not a basis to undo an agreement.
This defense involves a high level of unfairness in the process, including factors such as: the maturity and age of the individuals, their business backgrounds, their educational levels, their prior marriages, whether they each had an attorney, and other motivations. The fact that the agreement is one-sided, however, does not make it “unconscionable.” For an agreement to be “unconscionable,” it would have to be so one-sided that no reasonable person could consider it to be an “arms-length transaction.” In addition to meeting the high standard of “unconscionable,” one challenging the enforceability of a premarital agreement would have to show that there was not a fair and reasonable disclosure of the property and financial obligations of the other party, and that the challenging party did not voluntarily and expressly waive in writing further disclosure beyond what was provided and did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.
How Our Firm Can Help
At Noelke Maples St. Leger Bryant, LLP, our attorneys draft and negotiate the terms of premarital agreements. We also have experience defending and challenging premarital agreements during a divorce. If you have more questions, please contact us to schedule a confidential consultation: Contact NMSB.