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How does a prenuptial agreement work?

One of life's most painful events is a divorce; the emotional and financial cost can be significant. The emotional costs may be beyond protection, but the proper use of a prenuptial agreement can protect personal assets from a lengthy divorce proceeding and from unnecessary dissipation in a property division dispute.

In Texas, prenuptial agreements are formally known as "premarital agreements." A premarital agreement is "an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage." The agreement must be in writing and signed by both parties. Most importantly, the agreement must be executed prior to the marriage. Both parties must make full disclosure of their assets to the other party prior to execution of the agreement. The failure to make such a disclosure may be grounds for invalidating the agreement.

A premarital agreement may cover a number of topics, including:

  • The rights of the parties to the assets of either;
  • The right to buy, sell or encumber assets;
  • The disposition of property on separation, marital dissolution or death;
  • The modification or elimination of spousal support;
  • The making of a will, trust or other arrangement to give effect to the terms of the premarital agreement;
  • The ownership rights in death benefits from life insurance policies.

The statute makes one important exception: a premarital agreement cannot adversely affect child support obligations.

Premarital agreements are useful in a number of situations. Anyone who is contemplating marriage and wants to protect substantial assets in the event of divorce may wish to consult an attorney who is experienced in drafting such documents. Such a consultation may provide valuable information on the formalities of prenuptial agreements, their uses in specific situations and whether such an agreement can accomplish the goal of asset protection.

Source: Texas Family Code, Chapter 4, Premarital and Marital Property Agreements, accessed on Mar. 6, 2017

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