Should I Have a Sunset Clause in My Texas Prenup?

 Posted on August 21, 2024 in Family Law

While every engaged couple should consider a prenuptial agreement, they are especially important when either one or both spouses-to-be have substantial assets. A prenuptial agreement can eliminate the acrimony and contentiousness that are part of many high-asset divorces since the contract already stipulates how the division of assets and property should be addressed.

If you are planning on signing a prenup, one issue that will need to be addressed is whether or not a sunset clause should be included. The following is a brief overview of the pros and cons of sunset clauses. A Texas divorce lawyer can provide more information based on the circumstances of your situation.

What Is a Sunset Clause?

A sunset clause sets a specific date for when the prenuptial agreement will expire and no longer be valid. Some couples entering a prenup feel that if their marriage lasts for a certain number of years, it will probably last "forever," and they do not need the prenup any longer.

For example, a couple may choose their 15th wedding anniversary as the agreement’s expiration date. This would mean that once that date arrives, should the couple decide to divorce, the agreement over how assets and property would be divided that was in the prenup no longer applies, and that division would now fall under Texas community property law, which divides the marital estate in half.

One other option for a sunset clause is to phase out the conditions of the prenup over an extended period of time, such as increasing the percentage of assets one spouse will receive or the amount of spousal support for each year the marriage lasts until the expiration date.

How a Postnuptial Agreement Can Be Beneficial

If you do have a sunset clause, there is always the risk that your spouse could just "wait" out the expiration and then file for divorce and get half the marital estate – which totally defeats the purpose of having a prenuptial agreement. However, you can still protect yourself financially by entering into a postnuptial agreement before the prenup expires. Even if your marriage is still happy, a postnuptial agreement is a solid legal option when you have a prenup sunset clause.

Postnuptial agreements are also a good idea for married couples who do not have sunset clauses in their prenups or never had a prenup to begin with. These contracts allow a couple to address financial issues that may not have been in play before the marriage, like business ownership or a significant change in earning potential by either spouse.

Contact a Travis County, IL Family Lawyer for Legal Assistance

No matter where you are in the "couple" category – engaged or already married – knowing that you are financially protected should your marriage not work out can provide peace of mind. Working together with your loved one to draft a prenuptial or postnuptial agreement can actually be healthy for a relationship, allowing each party to share in detail what their financial goals for the future are, something that many couples do not always have the opportunity to do.

Call Powers Kerr & Rashidi, PLLC at 512-610-6199 to schedule a confidential consultation with one of our Austin, TX prenuptial agreement lawyers and learn what legal options may be the best for your financial future.