Prenuptial &
Postnuptial Agreements
Protecting Your Assets through Marital Agreements
Although most couples don’t envision getting a divorce when they marry, it is wise to evaluate your finances and put financial parameters in place ahead of time. Divorce tends to bring out people’s reactive emotions, making it difficult to think clearly. When couples marry later in life or enter into a second marriage, the need for establishing financial plans in advance becomes even more vital. This is especially true when one spouse has a successful business or has inherited substantial assets.
Prenuptial and postnuptial agreements are legal tools that couples can use to establish how they will divide their assets and debts if they divorce. Another name for these binding legal contracts are premarital and marital agreements or premarital and marital property agreements.
What is the difference between a prenuptial and postnuptial agreement?
The main difference is the timing of the agreement. You draft a prenuptial agreement prior to marriage, and a postnuptial agreement afterward. In addition, if you already have a prenuptial agreement, but circumstances have changed, you can later create a postnuptial agreement to reflect the changes in your situation.
What types of circumstances can you address?
The prenup or postnuptial agreement can address you and your partner’s rights to:
Property acquired during marriage- Transfer or determine use of property
- Sell property in the event of divorce or death
- Designate who is responsible for certain financial expenses
- Create and use joint bank accounts
- Change family names when married
- Use marriage counseling or other types of dispute resolution (mediation)
- Determine the effect of extramarital relationships on property division
- Hand down family assets as legacy rather than through property division
- Continue ownership of a business after divorce
- Retain retirement accounts as separate property
- State your wishes for child custody
- Clarify the terms of spousal support
Couples can even include provisions for pets and social media networking.
What legal factors could make courts rule that the document is not enforceable?
The following situations could make your prenuptial or postnuptial contract invalid:
Signing involuntarily or under coercion/duress
Urging you to sign the document quickly, not leaving you much time to review it or have a lawyer review it for you, could amount to coercion or duress. Another example would be when you’re forced to sign the contract under threat. Perhaps your partner threatens to call off the marriage if you don’t sign within a certain time limit. Or, your partner becomes angry and yells at you, accusing you of not trusting them. A court might see any attempt to force you to sign against your will as coercion or duress.
Failing to disclose all debts or assets
Sometimes a partner will coerce or threaten a partner to sign the agreement because they are hiding financial information or have lied about the state of their finances. The partner may have off-shore accounts, be engaged in white-collar crime such as money laundering or simply be hiding a source of income. They might have changed the status of an asset so that it is not in the form reported on their list of assets. Or, they don’t mention they’re considering filing for bankruptcy due to the debt acquired by their business. Unless you sign a waiver releasing your partner from full financial disclosure, they would have to provide a complete and accurate list of assets, debts and income.
An unfair contract
“Unconscionable” is a term that courts use to describe an unfair or one-sided marital contract. This type of contract does not consider the well-being of the other party. There is no precise definition of what is “unconscionable” in the Texas legal system. In fact, courts rule on a case-by-case basis. However, examples might include an agreement that proposed:
- Relinquishing rights to spousal support
- Imposing restrictions on child support
- Demanding their partner stay at a certain weight level
- Limiting the number of children the couple may have
Lack of a properly
written contract
A verbal agreement based on a handshake will not hold up in court. The premarital or marital agreement must be in written form. In addition, it must adhere to the legal requirements of a written contract. To be enforceable, the agreement should be clear and not incorporate ambiguous language. Both parties must sign the agreement, and it must include the necessary and appropriate financial disclosures. For this reason, it is best for each spouse to seek legal advice from their own attorney when entering into a premarital or marital agreement. Lawyers can ensure that agreements conform to contract law.
Discuss your ideas regarding prenuptial or postnuptial agreements
Let’s discuss your concerns about a premarital or marital agreement. We’re happy to answer your questions, review a proposed agreement and help you address any aspects of it. If you would like us to draft an agreement to propose to your partner, we can assist with that as well.
Call 940.566.0606 to schedule an appointment.
Reach out to us
DTX Family Law
525 S. Locust Street, Ste. 100
Denton Texas 76201
Phone: 940.566.0606