Do You Need a Postnuptial Agreement?

Do You Need a Postnuptial Agreement?

What is a Postnuptial Agreement?

Postnuptial agreements usually restrict the division of community property in the event of a divorce. While assets acquired and income earned during marriages are presumed to be divisible between spouses, some may wish to proactively define future income or investments as separate property. Less commonly, these agreements may also enable parties to convert separate property into community property. 

Case Law

For a real life example, see Byrnes v. Byrnes, 19 S.W.3d 556 (Tex. App. 2000) [where, because the parties’ agreement contained no language indicating that they intended a partition, and provided for a forfeiture of appellee’s interest, the document was not a valid partition under Tex. Fam. Code Ann. § 4.102. Nothing in the agreement indicated that the parties intended to effect an immediate transfer of interest upon signing.]

Challenging a Postnup

Successfully challenging a post-nuptial agreement in Texas is exceedingly difficult. In order to invalidate a postnuptial agreement, the complaining party would need to demonstrate one of the following: 

  1. That they party did not sign the agreement voluntarily; or
  2. That the agreement was unconscionable when it was signed and, before execution of the agreement, that party:
  • was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
  • 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.

Summary

A postnuptial agreement can function to “future-proof” the characterization and division of a couples community and separate estates. A valid agreement must voluntarily be signed by both parties following fair and reasonable disclosure of all property and financial obligations. Contact an experienced family law attorney to determine whether a postnuptial agreement would be beneficial for you.