Prenups in Texas

A prenup, short for prenuptial or premarital agreement, is an increasingly popular method of protecting one's property and wealth before entering a marriage. In addition to keeping existing or future property separate, a prenup can be used to protect a marriage partner from debts acquired by his or her spouse. If drafted properly, a prenup can actually reduce financial stress during marriage and improve the prospects of the union. A postnuptial agreement is similar to a prenup but occurs after a marital union is established. Prenuptial agreements should be correctly drafted because improperly executed prenups can be nullified during a divorce.

Divorce attorneys tend to make good drafters of prenuptial agreements because they have witnessed how courts treat prenups during divorces—and what sort of errors lead to prenups being declared null and void. Contact us today for a free consultation from an experienced divorce lawyer.

How Marriage Property Works in Texas

In the event of a divorce, the Texas Family Code only requires dividing up "community", or jointly-owned, property of the partners. However, most property acquired during a marriage tends to be considered community property in Texas unless there is specific evidence otherwise. This is not the case in many other states, so it is important to be aware of how Texas courts treat community vs. separate property in a marriage.

Presumption of Community Property

Section § 3.003 of the Texas Family Code states property in possession of either spouse on dissolution of marriage is presumed to be community property. Therefore, in the absence of a prenup, property will become communal by default. If one partner wishes for property to be treated as separate, the burden of proof will fall on him or her to provide clear and convincing evidence that the property is indeed separate. If you believe that some or all property acquired during marriage should be legally separate, a prenuptial agreement is the most reliable way to protect your rights to that property.

Definition of Separate Property

Since property is presumed to be communal, it has to qualify as separate property to prevent it from being divided during a divorce. Generally, property that was acquired prior to a marriage will be considered separate. So will money and property inherited by or given as a gift to only one spouse. If a spouse is injured during a marriage and receives compensation for it, that money will be treated as separate except for the portion intended to make up for lost earnings. Income earned during marriage is typically not treated as separate. Of course, what qualifies as separate property in Texas can be complicated, especially in the absence of a prenup, so feel free to contact us today if you have a specific question about separate property.

How Community Property Is Divided

Once property is established as community property, how will it be divided? Texas divorce law calls for a division of community property in a manner that is "just", "right", and "equitable" given the circumstances. As you can imagine, these terms are seldom helpful when partners have legitimate disagreements over communal property division. Nonetheless, some of the things courts consider in a division of community property are fault in the breakup of marriage (if applicable), and differences between the spouses' earning power, employability, education, health, and plans for custody of any children of the marriage.

Therefore division of disputed community property without a prenup is seldom equal, simple, or even predictable, but rather is subject to the judgement of a court. If you wish a avoid this possibility, a prenuptial or postnuptial agreement is the legally-recognized way to do it.

What about Alimony?

When ordered by a court, alimony, which means payments to a spouse, is called spousal maintenance in Austin and elsewhere in Texas. It is generally not awarded in a divorce unless specific circumstances exist. These include:

• One spouse was convicted of committing domestic violence against the other spouse or his or her children
• One spouse cannot support him- or herself financially due to a physical or mental disability
• The partners were married for more than 10 years and one spouse cannot earn enough income to support basic needs
• One spouse will have custody of a child with a physical or mental disability that prevents the parent from earning enough income

If you have questions about how child support works in Texas, see our pages on child support, divorce with children, and enforcement of divorce.

What to Include in a Prenup

As stated in section § 4.003 of the Texas Family Code, prenups can cover the following issues, so long as they do not encourage divorce or negatively affect a child's right to child support:

• Division of any form of property depending on how the marriage ends
• Special rights to property such as the right to use, sell, lease, or manage it
• Division of debts or obligations to property
• Spousal maintenance
• Formation of a will or trust
• Life insurance
• Any other matter that doesn't violate public policy or statue

Prenuptial agreements therefore can cover nearly any conceivable property arrangement and can include clauses based on possible events. One such event could be an act of infidelity.

Infidelity Clause

While infidelity clauses in a properly-drafted prenup are enforceable in the state of Texas, it is important to consider the possible consequences of such a clause. If terms in a prenup are triggered by an event such as infidelity, it must be proven in court the event actually occurred for the terms to be applied. This can be difficult for certain types of events, especially events that are typically private.

If it is difficult to prove an event occurred, the other partner—regardless of the truth of the matter—may deny that it ever took place. This could invite additional litigation and complicate an already-stressful divorce.

Additionally, the boundaries of infidelity are not well defined. While everyone might agree that sexual intercourse constitutes infidelity, acts like flirtation, use of pornography, visiting adult bars, etc. are less clear. One's assumptions about infidelity may not be shared by one's spouse or a court in a divorce proceeding.

Postnuptial Agreements and Prenup Modifications

A postnuptial agreement is similar in nature to a prenup but is signed after marriage. It is becoming more common that partners who married without a prenup seek to sign a postnuptial agreement. Some of the motivating factors include a lack of awareness of prenuptial contracts prior to marriage, a change in sentiment about property during a marriage, or a significant change in the property, income, or debts of one or both partners after marriage has taken place.

The property arrangements eligible in a prenup are generally applicable to a postnuptial agreement contract as well. However, postnuptial agreements can be more challenging to enforce in some situations. This is in part because a postnuptial agreement will likely involve one or both partners forfeiting rights to property that they already had before the agreement.

Future Rights vs. Existing Rights

Compare the postnuptial situation to that of a prenup, where partners are defining future property rights that they do not yet have. Therefore it is especially important for both partners to seek clear and documented legal counsel before signing a postnuptial agreement. This will minimize the risk a court might declare the agreement invalid on grounds of unconscionability, a legal term that means extremely unfair or "one-sided." Another possibility is that a court determines that one partner likely did not fully understand the contract if it is particularly unfavorable to that partner.

Proving the Contract Was Voluntary

Both prenuptial and postnuptial agreements must be voluntarily signed by both parties to be valid. The Texas Family Code does not define voluntary, but past court cases set a legal precedent for how this requirement is interpreted. "Voluntary" is generally accepted to mean the absence of duress or undue influence. A court may suspect the possibilities for duress, undue influence, or abuse are broader between married partners than fiancés. Therefore avoiding false accusations is another reason to hire an experienced lawyer to help set up a postnuptial agreement.

Modifying a Prenup

Modification of a prenuptial agreement works like a postnuptial agreement. The changes made to the agreement must be voluntarily accepted by both parties without duress or terms that could be considered overly skewed in favor of one partner. Nonetheless, modified prenups are highly enforceable contracts since the parties went through the process more than once.

You Need an Experienced Family Lawyer

While the open-ended framework of prenuptial agreements in Texas allows for a variety of possibilities, a poorly drafted prenup can actually make a divorce more complicated than if a prenup never existed. Consider that all of the following scenarios have led to courts not upholding prenups in Texas:

• It can be shown one party didn't understand the terms of the prenup
• The agreement was signed under duress or threats
• The agreement was rushed
• It's not in writing or filed properly
• It's not complete or specific enough
• It included an illegal clause
• The terms are unconscionable, or "one-sided"
• One or both parties did not disclose all income, property, and debts

To minimize the risk a prenup won't be upheld by a court, each partner should hire independent lawyers well in advance of marriage. This will provide the best evidence that the prenup was voluntary and fully understood by both partners.

Given the stakes involved with prenuptial agreements, it is important to seek the counsel of a lawyer experienced in family law and divorce. Sue Berkel has over 30 years of family law experience as a prosecutor, judge, and private-practice lawyer. Request a free consultation today if you're considering a prenuptial agreement and seeking the legal counsel of an experienced family law attorney.