Enforceability of Premarital Agreements

Premarital agreements, more commonly known as “prenups,” are no longer taboo. Instead, a premarital agreement is a smart idea for individuals contemplating marriage. Addressing how property and debt will be handled during the marriage and upon divorce while a couple is in a positive headspace is beneficial to both future spouses. It also saves substantial money in the event of a divorce. However, it is vital to ensure that the agreement is enforceable and covers all terms the parties want to include.

When first meeting with a potential client regarding a premarital agreement, the prudent attorney should be prepared with questions to obtain a clear view of the estates of the future spouses. Specific questions should be asked regarding the property and debt of both parties, their family plans, their future goals, the lifestyle and career of each party, any prior marriages, and any prior or pending legal actions involving either party. It serves everyone best to be candid about facts and goals up front rather than to try to revise the agreement with terms based on newly discovered facts or concerns once negotiations are underway, especially as the marriage date draws closer. For example, does the client want to simply protect assets owned before marriage, or does the client want to provide for penalties due to infidelity or a short-term marriage?

Drafting a premarital agreement is more than filling in blanks on a form. Premarital agreements bring a chance to flex the attorney’s creative muscles. Relying solely on formbook language would be a disservice to both parties. Creative terms can range from agreeing that certain presumptions regarding community property under the Texas Family Code will not apply, to altering evidentiary standards for proving separate property in the event of a divorce, to providing for spousal support payouts based upon adultery or the length of the marriage. So long as the terms do not violate public policy, do not adversely affect child support, and do not defraud creditors, a variety of issues can be addressed in the premarital agreement. At a minimum, the agreement should specify what is community property and what is separate property, as well as how the income each spouse earns or receives during the marriage will be characterized.

Premarital agreements in Texas are governed by Chapter 4 of the Texas Family Code. The agreement must be in writing and signed by both parties. It is not uncommon for four originals of the agreement to be signed and retained by both parties and their attorneys so that everyone has an original.

No consideration is necessary for a premarital agreement to be enforceable. However, premarital agreements must be signed voluntarily, and the terms must not be unconscionable. Voluntariness is best ensured by each future spouse having independent counsel, even though this is not required. Also, the further in advance of the wedding date the premarital agreement is signed, the better. Unconscionability is not specifically defined in the Texas Family Code, but the Code provides that agreements may be set aside on such grounds if 1) a party was not provided fair and reasonable disclosure of assets and liabilities of the other party, 2) a party did not voluntarily waive his or her right to any further disclosure beyond the aforementioned, and 3) a party did not have or could not have had knowledge of the assets and liabilities of the other party. For this reason, it is common practice for a waiver of further financial disclosures to be signed by the parties before the premarital agreement is signed. Then, after the couple is married, it is wise for the spouses to sign a marital property agreement ratifying the premarital agreement. The premarital agreement will often state that the spouses will sign such an agreement with thirty days after the date of their marriage.

Hopefully, the couple will thereafter live happily ever after; however, divorce can happen to even the most passionate of couples. If the spouses can avoid a messy battle in the future, then they can each exit the marriage with money saved and more peace, which is of course ideal if there are children involved. Child custody terms, however, are not included in a premarital agreement, as they would be unenforceable. Therefore, child custody and child support would still need to be addressed and resolved in a divorce involving children.

While premarital agreements may seem unnecessary when a couple is madly in love or does not have much in the way of assets to protect, the reality is that emotional and financial circumstances can change during a marriage, and premarital agreements can solve many issues that arise during divorce; thereby avoiding a great deal of stress and legal fees later.