Prenuptial Agreements in Texas and How They Work

Individuals who own a business, own commercial or residential property, or earn rental income in the state of Texas may want to consider a prenuptial agreement to protect their assets in the event of a divorce.

Here are some questions to consider when making this important decision:

What is the Essence of a Texas Prenuptial Agreement?

The Texas Family Code outlines the standards for a valid prenuptial agreement. Section 4.002 states that a prenuptial agreement must foremost be in writing and signed by both parties. Importantly, these agreements are enforceable without consideration. Therefore, no money or property needs to be exchanged between the two contracting parties in order for a valid prenuptial agreement to take place.

What Can Be Included In A Prenuptial Agreement?

According to the Texas Family Code Section 4.003 (a), a prenuptial agreement can include any or all of the following provisions:

1. the rights and obligations of each party with respect to any property, whenever and wherever acquired or located;
2. the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
3. the disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
4. the modification or elimination of spousal support;
5. the making of a will, trust, or other arrangement to carry out the provisions of the agreement;
6. the ownership rights in and disposition of the death benefit from a life insurance policy;
7. the choice of law governing the construction of the agreement; and,
8. any other matter, including personal rights and obligations not in violation of public policy or a statute imposing a criminal penalty.

What Cannot Be Included In A Prenuptial Agreement?

Texas Family Code Section 4.003 (b) states that a prenuptial agreement cannot include terms that “adversely concern child support.” This means that individuals cannot agree to change the amount of child support that they would be required to pay in the event of divorce. The Texas Family Code provides guidelines on how to determine the amount of child support that is to be paid by an obligor parent.

Can A Valid Prenuptial Agreement Be Challenged In Texas?

A prenuptial agreement is not enforceable if the challenging party demonstrates that:

1. A party did not sign the agreement voluntarily; or,
2. The agreement was unconscionable when it was signed and, before signing the agreement, that party: was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; or did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Do Prenuptial Agreements Apply To Common Law Marriage In Texas?

Prenuptial agreements rarely apply to common law marriages in Texas. Texas Family Code Section 4.004 states that a prenuptial agreement becomes effective on marriage (occurring when two individuals obtain a marriage license).