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Pre-Nuptial Agreements in Texas

There are few things you should know about prenuptial agreements in Texas.

An Example: Harold & Julie

Harold Lee graduated from college ten years ago. Since then, he has founded his own technology company. The technology company is successful, and it affords Harold financial stability and occasional indulgences such as quarterly vacations. Harold lives in a suburban neighborhood right outside of a major city in Texas. On weekends and holidays, Harold enjoys spending time with his family, which includes his mother, father, sister, and brother.

Two years ago, while out with mutual friends, Harold met Julie Sung. Julie is an independent thinker and has always worked hard to accomplish her goals. Like Harold, Julie graduated from college ten years ago. Since then, she’s earned an advanced degree and obtained employment as an accountant. She also resides in a suburban community that is right outside of a major city in Texas. On the weekends and holidays, Julie enjoys spending time with her family, which includes her mother, father, and two sisters.

Since the day Julie and Harold met, the two have been inseparable. Last month, Harold asked Julie’ s father for her hand in marriage. He proposed last weekend and Julie said, “Yes!” Now that Julie and Harold plan on getting married in Texas, there are a few things that both Harold and Julie and perhaps you should consider:

  • Should we get a Pre Nuptial Agreement?
  • Should we get a Post Nuptial Agreement?

In deciding whether or not they need a pre nuptial agreement, they should ask themselves the a series of personal questions. Some of the questions include the following: Do I own a business? Or, do I own residential or commercial property? Do I earn rental income from any of those properties? If the answer is yes to any of these questions, then Howard and Julie or possibly you, may need to consider a pre nuptial agreement to protect their individual assets in the unlikely event of divorce.

Considering Getting a Pre-Nup

1. What should a valid Pre-Nup look like?

So where do Howard and Julie begin? They need to abide by the guidelines set in the Texas Family Code for the creation of pre nuptial agreements. The guidelines about creating a pre-nup are pretty straight forward.  

Texas Family Code section 4.002 requires that a pre-nuptial agreement be in writing and signed by both parties. The agreement is enforceable without consideration. This means that Texas does not recognize any oral pre nuptial agreements. Furthermore, this means that no money or property needs to be exchanged between the two contracting parties in order for a valid pre nuptial agreement to take place.

2. What can be included in a Pre-Nuptial Agreement?

Texas Family Code section 4.003(a) specifies exactly what can be included in the agreement:

(1) the rights and obligations of each of the parties in any of the property of either or both of them 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 on 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 their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

3. What cannot be in a Pre-Nuptial Agreement?

So now that Julie and Howard understand what can be included in a pre nuptial agreement, they and perhaps you need to understand what cannot be included in a prenuptial agreement. This is vital in assuring that the agreement will not be determined to be void, should a disagreement ever arise. 

Texas Family Code section 4.003 (b) mandates that a pr- nuptial agreement cannot include terms that affect child support. In other words, you cannot around child support, including changing 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.

4. Can a valid Pre-Nuptial Agreement be nullified?

The general answer is no. A valid pre nuptial agreement cannot be successfully challenged in Texas. However, in some cases it may be done. Generally, trying to undo a valid a pre-nuptial agreement is difficult because a valid pre nuptial agreement is a contract. As such, the terms listed in the contract are governed by contract law and family law. Texas Family Code section 4.006 mandates that a pre-nuptial agreement is not enforceable if the party against whom enforcement is requested proves that:

  1. The 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.

5. Do Pre-Nuptial Agreements apply to common law (informal) marriages?

The general answer is no. According to the Texas Family Code, Section 4.004 a pre nuptial agreement becomes effective on marriage. A valid marriage in Texas occurs when two individuals obtain a marriage license. In our context, should Howard and Julie decide on getting a pre nuptial agreement, it will become valid once they are married.