In Texas, the premarital agreement or commonly referred to as the prenup, is one of the most important legal decisions a party can make before a marriage, that could have long lasting ramifications both during a successful marriage, and or after a failed marriage. Unfortunately, popular media/culture commonly has the very mention of a premarital agreement between parties come with the assumption that one day there will be a separation, divorce, or one spouse is protecting assets from the other spouse, and so forth and so on. Sadly, this is true for some couples, but not all. In reality though, the premarital agreement may be the appropriate legal agreement a party needs to ensure a respectful, safe, and secure marriage.
Premarital agreements in Texas are defined as: an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage (TFC 4.001)
The intended purpose of the premarital agreement is to define the rights and obligations of couples who are about to marry. These agreements can cover a very wide array of subjects as long as the agreement is not against public policy, violating a statute imposing criminal penalties, adversely affect a child’s right to child support, or defraud a creditor. Some more common examples of premarital agreements can include:
- To eliminate or limit alimony (spousal-maintenance);
- Detailing what property belongs to each party before the marriage and who will manage it;
- Ensure child’s religious upbringing should parties divorce
- To keep a party’s income separate to pay off premarital debts, or to meet spousal-maintenance obligations from an earlier marriage;
- To clarify how taxes will be filed and who will be responsible for tax-liability;
- Or even determining which property will be separate property or community property.
The basic requirements for forming a valid premarital agreement are:
- It be in writing;
- A full financial disclosure be made to the other party; and
- Signed before the marriage.
If these general requirements are met, there is a valid premarital agreement that can take effect the moment the parties are married and unless stated otherwise will stay in effect until the marriage ends or a party dies. Notably, a premarital agreement can be altered before/after the parties by a written agreement that is signed by both parties.
***It should go without saying that every case is different and it is advised to consult a attorney before entering into a premarital agreement. There are specific rules for agreements that deal with real property, child support, the length of the agreement, alternative dispute resolution, etc.***
Once the parties marry, the premarital agreement can still be challenged, it is not set in stone. If one party wishes to challenge the premarital agreement, there is precedent that provides a party has 4 years from the date of the dissolution of the marriage to suit, but every case is different. Challenges to a premarital agreement can take several forms, including but not limited to:
Estoppel: The contestant (party contesting the agreement) can allege that the proponent of the agreement (person wishing to keep the agreement) can be estopped (barred) from alleging the limitation on challenging the premarital agreement has lapsed. This happens when the proponent, or an agent, or representative of the proponent made representations that induced the contestant to delay filing suit until after the limitation period had expired.
*Example: If husband wants to challenge the premarital agreement but the wife’s actions cause the husband to delay filing the suit until the 5th year after the dissolution of the marriage.
Laches: The proponent can assert that the contestant is barred form bringing suit even if the limitation period has not expired. This happened when it is shown that the contestant unreasonably delayed asserting her rights, and the proponent changed his position in good faith, to his detriment because of the delay.
*Example: Laches barred a daughter’s contest of a premarital agreement between her deceased father and her stepmother when (1) the daughter, with knowledge of the premarital agreement, signed a settlement agreement with her stepmother and then waited 5 years to contest the premarital agreement, and (2) the stepmother developed Alzheimer’s during the intervening period and was no longer competent to testify about the premarital agreement.
Involuntary execution: A premarital agreement is not enforceable if the contestant proves that she did not execute the agreement voluntarily.
A premarital agreement is a legal tool that can help protect a person’s finances, establish boundaries, and create clear rules for parties to follow should disputes arise between a married couple. A premarital agreement is not for everyone, but If you or your future spouse feel that a premarital agreement is something you want to explore, you should contact a competent attorney and get clear legal advice.
Disclaimer: The legal information presented herein should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. General advice should always be tested by the particular facts and circumstances of each case. Legal advice is almost always case specific. Statues, ordinances, legal procedures, case law and rules of evidence are often revised.