While no party wants to enter into a marriage considering the possibility of its failure, the reality is that a high percentage of American marriages end in divorce. Many marriages start with both parties on a relatively equal financial footing, with both parties bringing roughly equal amounts of assets and debts. Yet others involve situations where one spouse has accumulated more wealth over time, or where circumstances are more complex, involving children from other relationships or family businesses. In those cases, a prenuptial (“prenup”) or postnuptial agreement may be necessary. Prenups are signed before a marriage, while postnuptial agreements are signed after a wedding, and account for all property acquired during the marriage, as well as separate property brought into the marriage.
Prenuptial and postnuptial agreements may not seem romantic, as they involve discussing how assets and debts will be divided in the event of a divorce. But as an experienced family lawyer in Houston can explain, a prenup (or postnuptial agreement) can not only make the division of assets far simpler in the event of a divorce, but can actually help couples communicate more effectively about their finances.
How Property Is Divided in a Texas Divorce
In order to understand the true value of prenuptial and postnuptial agreements, it is first important to understand how Texas courts divide assets in a divorce. Texas is a community property state. The marital property is not divided equally, but instead based on what the court believes is a “just and right” division of assets and debts. A number of factors can be considered by a judge when making this determination, which may not always align with what a person believes is a fair division of property.
For example, a court can consider the following factors when allocating property between spouses:
- The difference in earning capacities between spouses;
- Which party has the primary responsibility for raising the children;
- Whether one party bears fault for the failure of the marriage;
- The benefits the innocent spouse would have received if the marriage had continued in fault divorce;
- The physical condition and health of the parties;
- The size of the marital estate;
- The size of the parties’ separate estates;
- Any anticipated inheritances of the parties;
- The difference in ages between the parties;
- Any gifts to a spouse;
- Any gifts to a third party or lovers;
- Tax considerations;
- Improper use or waste of community assets;
- Spousal support obligations;
- Custody of children
- The existence of property in other jurisdictions.
These factors can often result in one party being awarded a higher percentage of the marital estate than the other party. Having a prenuptial or postnuptial agreement in place can help to protect assets and ensure this aspect of a divorce does not result in a costly legal battle. A skilled Houston prenup lawyer can offer advice to best draft a prenuptial agreement to suit your specific needs.
Prenuptial versus Postnuptial Agreements
At first glance, there doesn’t seem to be much difference between prenuptial and postnuptial agreements other than the timing. However, there are some important distinctions between the two types of contracts.
A prenuptial agreement is signed before a couple marries. It determines the rights and obligations of a couple and sets forth how each individual’s property will be divided in the event of divorce or death. It typically will characterize each piece of property as either community or separate property, and set forth the conditions upon which these categories are determined. An experienced Houston prenup lawyer can help draw a solid prenuptial agreement prior to a marriage.
In contrast, a postnuptial agreement is signed after a couple is already married. This type of agreement is typically more complex because it must take into account all of the personal and business assets and debts that have been acquired during the marriage — the marital estate — as well as an analysis of the parties’ future earnings. While these agreements are more difficult to draft, a seasoned Houston postnuptial agreement attorney can work with you to put together a comprehensive contract.
The value of both prenuptial and postnuptial agreements comes in the ability of these documents to reduce the amount of time and money that parties may spend battling over property division in the event of divorce or death. This can be particularly important in more complicated family situations, where one party may want to leave an inheritance to children from a previous relationship, or where he or she may want to protect a partnership in a family business.
Are Postnuptial Agreements Even Effective?
Postnuptial agreements are effective in Texas, provided that certain conditions are met. To be enforceable, a postnuptial agreement must be (1) in writing and (2) signed by both of the parties, who have each agreed to its terms. A party can challenge a postnuptial agreement by showing that he or she did not sign it, or that he or she did so involuntarily. A legal challenge could also be mounted based on the agreement being unconscionable (for example, if all assets were given to one spouse and all debts to the other), or if one party did not provide a full and accurate disclosure of all financial assets and debts prior to entering into the agreement. Having an experienced Houston attorney assist in the drafting of this contract can avoid these pitfalls and ensure that your postnuptial agreement is effective.
If you are considering marriage, prenuptial and postnuptial agreements can help protect your assets and prevent a protracted battle over the division of property in the event of a divorce. At the Moffett Law Firm, our experienced Houston team of attorneys can help draw up prenuptial and postnuptial agreements, working with you to achieve a contract that best meets your needs. Contact us today to schedule an initial consultation at 713-987-4250 or by contacting us online.