Prenuptial agreements can be highly useful tools to preserve certain property interests in the event of divorce. More and more couples are utilizing these tools as people see the value in being able to predetermine certain outcomes with respect to property division. Prenuptial agreements can also be useful in predetermining spousal maintenance and other issues as well. When a prenuptial agreement is created in Texas, the creators need to follow certain steps to ensure that everything is done properly. In this post, we will go over these steps, one by one, so readers can have a sense of what this process looks like.

Step 1: Identify Goals / Interests

The first step is to simply identify the goals and interests of the parties involved. If neither of the parties have any goals which might be furthered by a prenuptial agreement, then a prenup won’t even be necessary. Prenups can only be used for specific purposes, they can’t achieve everything. So, for instance, if people want to use prenups to predetermine child support, this can’t be done, because it would be against public policy requiring both parents to support their children.  

In many cases, spouses enter into marriages without even considering the potential benefits or usefulness of a prenuptial agreement (also called “premarital agreements” in some jurisdictions). In the popular imagination, prenuptial agreements are “tools of the rich,” used almost exclusively by wealthy couples in order to selfishly guard their premarital assets. Or, other people feel that a prenuptial agreement necessarily lowers the amount of trust in a relationship. The truth, however, is that prenuptial agreements are simply contractual agreements that spouses can use to predetermine how certain property will be distributed. Prenuptial agreements allow spouses to predetermine certain outcomes which would otherwise be left up to the courts. And, as we know, sometimes courts don’t always render decisions that are fully consistent with a person’s desires. 

In this post, we will go over how prenuptial agreements can impact inheritance rights. Spouses need to be aware of how the “default” inheritance rules operate so that they can determine these default rules may be adequate, or if a prenuptial contract is necessary.

Texas is a Community Property State

The State of Texas is a “community property” state, as opposed to an equitable distribution state. What this means is that all marital property is divided in a just and right manner after a divorce, unless there is a compelling reason for this not to happen. In other words, practically speaking, property is typically divided equally absent circumstances that justify a disproportionate division.  One of the key issues here, however, is that only marital property will be divided after a divorce. There is a popular misconception that a community property state will divide all property after a divorce; this is not true. Only property which is classified as “marital property” is eligible for division. 

Preparing for a wedding is an exciting and joyous time. Let's face it. Most people believe talking about a prenuptial agreement can be a real buzzkill for people in love. No one wants to think about how their relationship will end.

But adopting a different mindset over prenups can bring many benefits. Texas couples who have gone through the process realize it's one of the best ways to have meaningful discussions early on that can provide peace of mind for circumstances that are impossible to predict.

How a prenup works

Prenuptial agreements are legal contracts showing how assets will be treated during a marriage as well as if divorce happens. Also called premarital agreements, prenups help couples:

Prenuptial agreements – also referred to as “premarital agreements” in Texas – are a curious thing in the context of marriage. On the one hand, many people insist that these agreements are necessary to ensure that no spouse is unfairly impacted by a divorce. On the other hand, prenuptial agreements are not exactly the most romantic things, and in some ways seem incongruous with the general purpose of marriage to begin with. The best approach is likely to be somewhere in the middle: use prenups when necessary, but they may not always be necessary. Texas is a community property state, which has a decisive role in property division in divorces without a prenuptial agreement. If a couple feels that this default position is fine, then perhaps a prenup is simply not necessary.

In this post, we’d like to give a basic overview of how courts treat prenuptial agreements. Most readers have at least a general idea of how these agreements work. A prenuptial agreement is a contract which predetermines things such as property division, asset protection, inheritance, debt responsibility, and so forth. But how do courts treat these agreements? Let's discuss in a bit of detail.

Texas Courts Apply Basic Contract Law Principles to Agreements

Chapter 4 of Subtitle (1)(B) within the Texas Family Code deals with both premarital and marital property agreements. This is where we can find the specific rules which govern prenuptial agreements. When it comes to the enforcement of these agreements, if we look at the code, we can see that Texas courts apply many of the basic principles of contract law. This means, for instance, that prenuptial agreements must be entered into voluntarily in order to be upheld. This is taken right from basic contract law which states that there must be a valid “acceptance” to create a contract.