Premarital Agreements

A premarital or prenuptial agreement is a contract between parties contemplating marriage that prevents the creation of community property. Community property is subject to the "just and right" division of the court - there is no 50% rule in Texas. Division can be a 60/40 or 80/20 split or some other percentage split. The division of the marital estate is up to the discretion of the court. However, the court has no power to divest a party of their separate property. The parties can contract that the property owned by one of them or by either of them will remain separate property and will include the income derived from the separate property. This income would normally be considered community income as well as anything purchased with it. A premarital or prenuptial agreement can change all that.  A post-nuptial or partition and exchange agreement is, again, a contract between married parties  The important thing to remember is - a Texas court has no discretion to divest a party of their separate property.

Generally, a prenuptial agreement or premarital agreement can address any property issue that might arise in the divorce context. The reasoning is, people should be free to contract and control the disposition of their property as they choose. However, a prenup cannot address child support. 

Under the Uniform Premarital Act (Texas Family Code Chapter 4) a premarital agreement must be in a writing. It must be signed by both parties and it is enforceable without consideration. It becomes effective on the date of marriage and may be amended, in writing, at any time after the date of marriage.

A premarital agreement is not enforceable if the party against whom enforcement is requested proves:

1. That the agreement was not signed voluntarily.

2. The agreement was unconscionable when it was signed.

3. Prior to signing the agreement the 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; and did not have our could not have had adequate knowledge of the property or financial obligations of the other party.

The issue of unconscionability of a premarital agreement is decided by the court as a matter of law. Example, in Osorno v. Osorno, 73 S.W.2d 734, an unwed mother got pregnant. Dad said he would marry her if she signed the prenuptial agreement. She signed. The court stated that although presented with a difficult choice, signing the agreement was not involuntary.

In Marsh v. Marsh, 949 S.W.2d 734 the court set out factors that the court would consider in determining unconscionability. In general, for a prenup to be unconscionable it must be so far one-sided that no reasonable person could consider it to be an arm's length transaction. Factors to be considered are maturity of the parties, prior marriages, respective ages and motivations to protect their respective children. The fact that a prenup party was not represented by counsel is not dispositive.  You don't have to have two lawyers.

Partition and Exchange Agreements

At any time after the date of marriage, the spouses may partition and exchange their community property then existing or to be acquired as the spouses may desire.  The freedom to contract. The spouses may agree that the income or property arising from the separate property that is then owned by one of them or that may be acquired shall be the separate property of the owner. A postnuptial agreement does not require judicial approval. The agreement must use the language of partition and exchange.

A partition and exchange agreement is not enforceable if the party against whom enforcement is requested proves that it was not signed voluntarily and, like a prenuptial agreement discussed above, the agreement was unconscionable when it was signed. That is the party must have been giving a reasonable and fair disclosure of the property or voluntarily waived in writing the right to disclosure and could not have had adequate knowledge of the property or financial obligations of the other party.

A partition and exchange agreement is void with respect to the rights of a preexisting creditor.

Agreement to Convert Separate Property to Community Property

At any time the spouses may agree that all or part of their separate property owned by either or both spouses is converted to community property. The agreement to convert separate property to community property must be signed, must identify the property to be converted and is enforceable without consideration.