What is a prenuptial agreement?
A prenuptial agreement or sometimes referred to as a premarital agreement is an enforceable written contract between 2 people who are contemplating marriage and for it to be legally effective when the parties are married. It is governed by the Texas Family Code section 4.001 and 4.004. The Texas law refers to a ceremonial marriage and not to common law or informal marriage.
What is the constitutional basis for property agreements?
The Texas Constitution provides that all property, both real estate property, and personal property, of a person, owned or claimed by that person before marriage; or, that is acquired by a gift, devise, or descent, i. e., if the person inherits the property, shall be the separate property of that person. The law does provide that persons that are about to marry and in some situations spouses that are already married, as long as the person is not attempting to defraud the other person or other pre-existing creditors, may enter into written agreements between the parties to partition their property, then existing or to be acquired, or exchanged between the parties in the future. In the case where one person makes a gift of property to the other person, that gift is presumed to include all the income or property which might arise from that gift of property. Should I get a premarital agreement? If a person is contemplating marriage, the person should consider and anticipate some issues that may be solved by the agreement.
If one or both of the parties are brought in major debt into the marriage, it may be a good idea to have a premarital agreement signed so as to limit the liability of each party. The same issues arise when one or both parties are bringing substantial assets or property into the marriage. The parties may want to protect the property and keep it as separate property during the marital relationship. If one of the parties is much wealthier than the other party, a premarital agreement may also allow for some allowance to the other parties in the event of a divorce. Those financial terms can be set out in the premarital agreement. If children are involved or if the parties are going into a second or third marriage, it is recommended that an agreement be set up to establish financial allowances for the children of one of the parties.
What Else Can a Premarital Agreement Cover?
Any rights or obligations of a party can be covered in a premarital agreement. It can designate rights to buy, sell, transfer, exchange or create any interest in a mortgage or otherwise manage or control property or debt. It can also allocate property in the event one of the parties dies or if the parties separate or divorce. A party can also make allowances for alimony for one of the parties. Even the rights to death benefits from a life insurance policy can be itemized in the premarital agreement. As long as the provisions in the premarital agreement do not violate Texas public policy or criminal law, it can be included in the agreement.
Are Premarital Agreements legal?
Yes, a premarital agreement is legal in Texas. However, a premarital agreement can be unenforceable or illegal for some reason. If one of the parties does not sign the agreement voluntarily, it is not enforceable. If one of the parties failed to provide the other party with a fair and reasonable disclosure of all financial obligations and property owned, the agreement may be unenforceable. Similarly, if one of the parties did not voluntarily waive, in writing, any rights to the agreement. It is also required that both parties seek individual legal counsel to explain the agreement and the rights and obligations under Texas law so that the agreement is enforceable in the future.