ATTORNEY BLOG | Family law in Texas, with its nuanced complexities, is often difficult to navigate. Our attorneys strive to make our clients' lives easier and often post information here that may help explain specific items related to divorce.

Prenuptial Agreements: “To Do?” before “I Do”

The minute you get engaged is the minute you begin realistically thinking about the “to do” list for your wedding. “Where are we going to have it? Should we have it inside or outside? Spring or summer? What lawyers should we choose?”

Wait…what?

That’s right. Picking the lawyers may need to be on the “to do” list. Something to think about: a prenuptial agreement is not just for marriages that end in divorce. The unfortunate reality is that while many marriages do end in divorce, those that don’t will end in death. In fact, 100 percent of marriages that don’t end in divorce end in death. And in either case, there are assets to be distributed. While it is certainly unromantic to discuss and negotiate a prenuptial agreement, it can save a lot of heartache and money when it comes time to distribute those assets on divorce or death.

What is a Prenuptial Agreement?

A prenuptial agreement is a contract between two future spouses and it becomes valid on the date of marriage. A prenuptial agreement is presumed valid and it is very difficult to set aside such an agreement. Furthermore, just because a prenuptial agreement may be perceived as “unfair” upon death or divorce does not mean it can be set aside. In addition, the prenuptial agreement survives the death of the spouses, so it is wise to be done in coordination with estate planning.

Texas is a community property state. This means that upon the date of marriage, all property is presumed to be community property. The Texas Constitution (Article 16, Section 15) provides for prenuptial agreements.

What Does a Prenuptial Agreement Do?

The most common reasons for a prenuptial agreement are as follows:

· To designate which property, if any, will be community property.
· To designate which property will be each person’s separate property. Separate property cannot be divided in a divorce and is protected upon death.
· To prevent claims against a party’s separate property in the case of divorce or death.
· To provide for the division of property in the case of divorce.
· To provide for property upon death.
· To make provisions with regard to income and assets acquired during the marriage.
· To provide for (or eliminate) spousal support or spousal maintenance (a/k/a alimony) in the case of divorce.
· To provide for income taxes and income tax filings.
· To make provisions for the use and ownership of real estate upon divorce or death.
· To provide for business interests. For example, if one spouse has an interest in a business(es) at the time of marriage, or acquires additional interests in businesses during the marriage. Without a premarital agreement in place, determining the community and separate portions of the business(es), and the value of these business(es), can be time-consuming, emotional and expensive.
· Prenuptial agreements can provide for numerous other things, but not for child support, visitation, parental rights or custody.

Most prenuptial agreements contain a list of each person’s assets and liabilities so that they are each informed about the property of the other person. However, property changes over time, so identifying what is separate and what is community property may still be difficult if proper bookkeeping is not followed.

Another purpose of a prenuptial agreement is to prevent costly court battles upon divorce or death. However, this depends on how well the prenuptial agreement is drafted. In layman’s terms: a poorly drafted prenuptial agreement can actually cause litigation to occur and therefore increase costs. So this poorly drafted agreement must then be litigated before the case can proceed…a problem that could have been prevented from the start by a well drafted prenuptial agreement.

How is a Prenuptial Agreement Negotiated?

A prenuptial agreement can be created in a back-and-forth negotiation process by each future spouse’s attorney on his or her behalf. Another option, if the attorneys cannot reach an agreement, is to utilize mediation. Yet another premier option for creating a prenuptial agreement these days is to utilize collaborative law with two collaboratively trained attorneys. Instead of a back-and-forth process, collaborative law brings the parties and their attorneys together to create the prenuptial agreement.

How Do I Know if I Need a Prenuptial Agreement?

Those who may not need a prenup: young couples getting married for the first time, with little or no assets, and without the expectation of large inheritances or trusts from their families.

Those who may need prenup: couples coming into a marriage with assets of their own or the expectation of assets from a trust or inheritance, a prenuptial agreement can be a must-have. It provides certainty for both parties and protections that can go beyond the laws governing the division of assets upon divorce or death.

Those who didn’t at first, but are rethinking the decision: couples that didn’t enter into a prenuptial agreement always have the option of entering into a postnuptial agreement (a martial agreement made after marriage). These are largely the same as prenuptial agreements.

Once the wedding dress is bought, the flowers ordered, and the RSVP’s are sent, the timing to discuss a prenuptial agreement is probably not optimal. The longer the distance from the wedding, the better the chance of negotiating a prenuptial agreement more peacefully. So if you think you need, or simply want a prenuptial agreement, it’s best to start early by putting “consult with a family law attorney” on the wedding “to do” list.