Texas law allows spouses and intended spouses to enter a Property Agreement that will change their property rights that would otherwise exist by law.
- A Prenuptial Agreement, or prenup, is signed before marriage, and
- A Postnuptial Agreement, or postnup, is signed during the marriage.
The Benefits of Signing a Property Agreement
A Property Agreement can forever affect your rights to marital property. It is important to consult with a divorce lawyer prior to signing either a prenup or post-nup. Having said that, there are benefits to signing a Property Agreement before or during your marriage.
A Property Agreement can be an effective way to make the future more predictable and a possible divorce or probate proceeding less expensive. If you own property coming into the marriage, for instance, you may want to make sure that those assets are easily identified as your separate property in the event of a divorce or the death of you or your spouse. A property agreement will be excellent proof of what is your separate property and what, therefore, should not be included in your spouse’s estate upon his or her death, and what should be confirmed as your separate property (and not divided) in the event of a divorce.
When one spouse has substantial liabilities, a prenup or postnup can further protect the other spouse from those liabilities, by specifically identifying the property each party brings into the marriage. Your separate property is not subject to your spouse’s personal debts, and a prenup or postnup can help shield your property from liability by specifically identifying it as such.
Comparison of a Prenuptial and a Postnuptial Agreement
Both prenuptial and postnuptial agreements are allowed in Texas. Both are routinely enforced and can only be challenged under certain limited circumstances. There are differences, however, as illustrated below.
The Distinctions Explained
- When the Agreement Is Signed. As the names suggest, the parties sign prenups before marriage and postnups during the marriage. A prenuptial agreement has the added benefit of leverage. If you are only willing to get married under the terms of the prenuptial agreement you are proposing, you still have the option of not getting married at all if your intended spouse refuses to sign a prenuptial agreement.
If you wait until after you get married to try to change your property rights and obligations, however, you have no such leverage. At that point, if your spouse will not agree to a postnup, your options are to either accept what marital property laws impose on you and your assets, or end the marriage. If you do not want the marital property laws of Texas to apply to your marriage, take care of that before you marry. An “agreement” is exactly that – an agreement.
No one can be forced to sign one after they are married, and it is generally harder to get out of a marriage than to simply not get married in the first place.
- Ratification of the Prenuptial Agreement. It is advisable to have the parties to a prenuptial agreement “ratify” an agreement after their marriage. The parties simply acknowledge in writing that they signed a property agreement before marriage and agree, as spouses, to be bound by it. This is required to the extent that retirement assets are impacted by the agreement, because, under Federal law, the waiver of certain retirement benefits can only occur once you are married. Ratification of the prenuptial agreement after marriage serves this purpose.
- Special Duties Between Spouses. Spouses owe special fiduciary duties to one another once they are married. When entering a postnuptial agreement, the law may place a higher duty on a spouse to disclose assets, be candid, and look out for the interests of your spouse. When considering a postnuptial agreement, it is extremely important that both spouses have full disclosure of their assets and liabilities at the time the agreement is signed and should always consult with their respective attorneys prior to signing.
How We at NMSB Can Help
Our marital lawyers are experienced in drafting postnuptial and prenuptial agreements. Please contact us to schedule an appointment to discuss whether an agreement is appropriate for your case.
See our “Newsroom” for more information on what can be included in a property agreement and how to challenge a property agreement.