Premarital Agreements: Always Be Prepared

 Posted on July 15,2015 in Prenuptial Agreements

Purchasing a car is nearly always a happy experience. Buyers are understandably focused on the cars' features and their plans for years of freedom on the open road. Auto insurance is only a necessary afterthought. In some ways, marriage is much the same. The bride and groom are understandably focused on their love for each other and their plans for a life together. A premarital agreement is only a necessary afterthought. Although no one plans to get in a car wreck or get divorced, responsible owners, and spouses, should be prepared for any possible outcome.

Content

Especially in a second or subsequent relationship, a premarital agreement can put inheritance plans in writing, virtually eliminating the possibility of a future battle in probate court that no one really wants.

By and large, however, most premarital agreements focus on property division matters, and Chapter 4 of the Family Code lays out the parameters of these documents. A premarital agreement may address almost all property obligations and rights that may be part of a high asset divorce, including:

• The management and sale of real property;
• Spousal maintenance matters;
• Ownership of a life insurance policy;
• Overall property distribution in the event of death, divorce, separation, or a similar event;
• Choice of law provisions; and
• Any other matter "not in violation of public policy or a statute imposing a criminal penalty."

Child support is the only property division subject that is completely off-limits; premarital or postmarital agreement may not discuss or divide child support in any way, shape, or form.

Enforcement

Most courts enforce written agreements between the parties in most circumstances, and family courts are no exception. Under Section 4.006, marital agreements are enforceable unless they were not signed voluntarily or they were unconscionable.

Agreements are "voluntary" so long as the spouses knew what they were signing. Unconscionability, however, is a bit more complicated:

• When Signed: Some agreements may become one-sided after they are signed, but this development does not make them illegal. Although it took place in California, the Frank and Jamie McCourt high net worth divorce is a fairly good example.
• No "Fair and Reasonable" Disclosure: Note that the statute does not say "complete" disclosure. A spouse may withhold some information, so long as the signing spouse waives complete disclosure.
• No "Adequate" Knowledge of Property: Once again, the statute does not require a "complete" property disclosure.

A premarital agreement is a necessary cornerstone in many relationships. For a consultation with an aggressive Cedar Park high-asset divorce attorney, contact our office. After-hours appointments are available.