Prenuptial Agreements in Texas

• Are prenuptial agreements enforceable in Texas?
• How does a prenuptial agreement work?
• What should you include?
• What documents and financial information do you need?
• What should you exclude?
• Consequences of invalid prenups in court
• How much does a prenup cost in Texas?
• Things to know before signing
• Are there alternatives to a prenup in Texas?
• References

A prenuptial agreement (commonly called a prenup) is a legal contract created between two parties who intend to get married. The document contains rules to help you split your estate equitably if your marriage ends. 

A prenup in Texas is smart if one partner enters the marriage with significant assets or debts. Without a prenup, funds from those assets could become community property that is split 50/50 in the event of a divorce. 

Since prenups are legal documents, rules and regulations govern their creation. If you break Texas guidelines, your prenup could be unenforceable in Texas courts. 

Here’s what you need to know before you draft a prenup. 

Are prenuptial agreements enforceable in Texas?

A prenuptial agreement drafted following Texas law is fully enforceable. If you create a document and sign it at least 30 days before your marriage, and it meets some important guidelines, it's a legal document. 

Texas participates in the Uniform Premarital Agreement Act, which governs how prenuptials are created and enforced. In general, a prenup complies if it meets the following rules:

• The agreement is in written (not oral) form. 
• It's written and signed at least 30 days before the marriage.
• Both parties signed the document voluntarily. 
• The terms within the prenup are relatively fair and don't create a hardship for one party if the marriage ends. 
• It discloses all financial data on both sides, and no deception occurred. 

Your prenup is modifiable, so you could change the terms if both parties agree. Some prenups contain so-called sunset clauses, meaning they end if the marriage lasts beyond a specific point. For example, a prenuptial agreement may have certain clauses that no longer apply after 10 years of marriage.

Read your prenup carefully to determine how long it lasts and how you can change it. If it hasn’t been sunset or changed, it’s enforceable as written. 

How does a Texas prenuptial agreement work?

Texas is a community property state, meaning that assets and debts accrued during a marriage become the equal property of both parties. Without a prenuptial agreement, those assets are split 50/50 in the event of a divorce. 

A prenup is made to protect what a person brings to a marriage, including the following:

• Inheritance 
• Property 
• Savings 
• Businesses 

To draft a prenuptial agreement, both parties submit an honest accounting of what they have and owe. Then, they determine what would happen to these assets if the marriage were to end. 

For example, you might enter a marriage with drilling rights on a property you’ve purchased. You could use your Texas prenuptial agreement to make sure any oil profits stemming from that land are yours and yours alone. If your marriage were to end, those oil profits wouldn't become community property, and you'd leave with 100% of them in the divorce. 

What should you include in a Texas prenup?

In theory, you could use a prenuptial agreement to protect everything you bring to the marriage. But typically, people use them for limited and specific purposes. 

Your Texas prenup could include directives about the following items:

• Owned properties 
• Pets 
• Life insurance policies
• Retirement accounts 
• Bank accounts
• Inheritance 

You could also include clauses to help you settle disagreements regarding the following:

• Wills or trusts 
• What state laws you’ll follow if you disagree with the prenuptial agreement 
• Who can buy, sell, use, or transfer property rights 
• Who is responsible for paying expenses 
• How an extramarital relationship would impact your property division in the event of a divorce

What documents and financial information do you need?

Prenuptial agreements work best when both sides are open and honest.  People typically need these documents and statements to draft a prenuptial agreement:

•   Proof of income: Check stubs, tax returns, bank statements, and retirement account statements are all important to consider.
•   Proof of debt: Credit card statements, student loan balances, medical bills, and outstanding tax bills are all needed.
•   List of assets: Deeds for boats, cars, and houses are important to bring to your lawyer. If you own a business, have invested in fine art, or have something else of financial importance, your lawyer should know.

Think about the items you have now and what you’d want to take with you if the marriage ended. Details about pets, jewelry, musical instruments, or anything else you own might belong in your prenuptial agreement.

What should you exclude from a Texas prenup?

While a prenup can cover many topics pertaining to your finances, some clauses are prohibited in Texas. 

You can't include rules about child support or custody in your prenuptial agreement. Texas courts must consider a child's best interests at the time of the divorce, and that could be impossible before you're married. 

You also can't include clauses about illegal activities. For example, you can't exclude assets from a spouse in the case of bigamy. Since having multiple spouses is illegal in Texas, this clause isn't enforceable. 

Finally, ensure that your prenup is relatively fair. If your clauses benefit your side exclusively and leave your former spouse with nothing in the divorce, a judge could toss it out. Don't use your prenup as a weapon to keep your spouse in line. Write it in the spirit of fairness. 

Consequences of invalid prenups in court

A prenuptial agreement should protect you if your marriage falls apart. But what happens if you bend the rules? Texas courts can—and sometimes do—toss out prenuptial agreements.  

For example, a Texas court rejected a prenuptial agreement between two parties when one was able to prove she was coerced to sign. A prenuptial agreement can’t be signed through lies, deception, or force. If one person can prove that happened, the courts can toss out the arrangement and split up the estate in an entirely different way than was described in the agreement.

If your prenuptial agreement contains the wrong things, is signed the wrong way, or otherwise breaks the rules, Texas courts don’t have to honor the arrangements you’ve made. You could be left negotiating with your partner over issues you thought you’d already solved.

How much does a prenup cost in Texas?

On average, people pay about $600 for a prenuptial agreement in Texas. But if you create other legal documents simultaneously (like a healthcare power of attorney or a will), your costs will go up. 

Need help with your prenuptial agreement?

Our experienced team can answer your questions to help you understand the process and figure out what's best for your specific situation.

 

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Things to know before signing a prenuptial agreement in Texas

Crafting a prenuptial agreement doesn't mean you're planning for a divorce. Think of it as a method you'll use to ensure your estate is handled properly at every stage. It can be a way to ease any worries about finances before you get married, and often, it’s something that both parties can feel good about.

Follow these guidelines before you sign the final document.

1.  Collaborate as you write. Both parties should disclose all of their assets and debts as they work on the prenuptial agreement. Don’t hold anything back. Deception could render the document invalid. 
2.  Research your finances. Make sure you’ve accounted for all of your assets in your prenup. Are you named as a beneficiary in a loved one’s will? Do you own stocks you’ve forgotten about? 
3.  Watch the calendar. Your documents must be signed at least 30 days before your wedding. 
4.  Sign and forget. Your prenuptial agreement is enforceable if your marriage ends. Don’t let it loom over your relationship.

Are there alternatives to a prenup in Texas?

Some couples don't need prenuptial agreements. If you enter the marriage with few assets and debts, you may not need the protection this legal document can deliver. 

A trust is an alternative to a prenuptial agreement, as this can keep assets out of your joined estate. These tools are valid per Texas law, but they can be very complex and hard to create. A prenup is simpler to draft and maintain. 

Talk with your partner about what's right for your assets, debts, and marriage. 

References