Prenuptial Agreements in Texas
Should you get a prenuptial agreement?
Prenuptial agreements are not only for the “rich.” Small business owners can almost always benefit greatly from the drafting and following of a prenuptial agreement. Others that can benefit include those that have accumulated any assets or those that expect an inheritance.
You should seriously consider having a prenuptial agreement prepared if you:
• You have assets such as a home, stock, or retirement account;
• You own any portion of a business;
• You expect to receive an inheritance;
• You have children and/or grandchildren from a previous marriage;
• Either prospective spouse is much wealthier than the other;
• One spouse may be supporting the other through college;
• You have loved ones you need to care for such as aging parents or special needs siblings;
• You are pursuing a degree or education that may have a substantial impact on your future earning capacity (i.e. medical degree, post graduate degree, or law degree);
• You are an artist, writer, musician, or inventor and you have the potential to have unexpected immediate financial success.
The Texas Constitution sanctions prenuptial agreements. Texas Const. Art. XVI, § 15. There are specific statutes concerning prenuptial agreements some of which are found in the Texas Family Code starting in Section 4.001. Texas Family Code §§ 4.001 et. seq. There have been hundreds of cases concerning prenuptial agreements. A few of those cases include Texas Supreme Court cases such as Beck v. Beck, 814 S.W.2d 745 (Tex. 1991). Texas has adopted the Uniform Premarital Agreement Act, and the law favors prenuptial agreement and their enforcement. Views on prenuptial agreements may vary from jurisdiction to jurisdiction or even court to court. You need an prenup attorney that is skilled in drafting agreements and an prenup attorney that is familiar with local courts. Cody is familiar with Tarrant, Denton, Collin, Wise, Dallas, Parker, Johnson, and Hood counties.
Texas courts will generally uphold agreements concerning marital property if a premarital agreement is not based on fraud, if the agreement is not overreaching, or parties to a prenuptial agreement are not under undue influence. When prenuptial agreements do not contradict public policy nor violate a criminal statute, prospective husband and wife can generally make any provision they may agree on with respect to their property, whether currently owned or to be acquired during marriage. Just like any contract, these marital contracts have limitations despite the constitutional and statutory recognition of prenuptial agreements. There are legal limitations on the ability of prospective spouses to define or modify debt and assets and other rights during marriage.
Often, prenuptial agreements help promote the marital relationship and the welfare of spouses by preventing marital conflicts over assets or debts. A well drafted prenuptial agreement will also simplify the division of assets and debts in the event of divorce. This will often save divorcing wives and husbands from prolonged litigation and unnecessary attorney fees. You can use prenuptial agreements with other estate planning tools to aid in the transfer and distribution of property after the death of the wife, husband, or both. It is important that married couples recognize the validity of a prenuptial agreement and follow the terms during marriage.