Defining a Post-Nuptial Agreement
A post-nuptial agreement is a contract entered into after the marriage has occurred, which tries to settle certain rights within the divorce process, as well as determine rights and duties during the marriage itself. A valid post-nuptial agreement will not be invalidated simply because it is made after the couple has married. Pursuant to the Texas Family Code, a valid post-nuptial agreement is enforceable the same as a valid prenuptial agreement. The post-nuptial agreement may set forth rights and duties, such as:
- Possession of community property , management and control during the marriage and upon divorce
- Whether or not income of one spouse from services during the marriage is community property
- What property is considered community property
- How community property will be divided upon divorce.
- What will happen if one spouse dies.
- If one spouse goes bankrupt – what will happen to the property?
It is important to know that a post-nuptial agreement may be valid even if it is not drafted by an attorney. An unsigned draft can be a basis for a contract if an agreement existed between the parties and is proven later on. Then, the contract becomes binding.
Texas Legal Requirements
Under Texas law, a post-nuptial agreement, which must be in writing and signed by both parties, "will not be enforceable unless the court finds from all of the relevant evidence that the agreement is not unconscionable when signed and, with respect to the spouse against whom enforcement of the agreement is sought, that person: (1) was provided, or given full and fair disclosure of, the property or financial obligation of the other party; (2) voluntarily or expressly waived any right to disclosure beyond the disclosure provided; or (3) had, or reasonably could have had, an adequate knowledge of the property or financial obligation." Tex. Fam. Code Ann. § 9.004(a). A party to a post-nuptial agreement has the right to independent legal counsel, and if one spouse does not have legal counsel, the other spouse should sign a waiver signed on a separate document. Tex. Fam. Code Ann. § 9.002(b).
Advantages of a Post-Nuptial Agreement
In the realm of family law, the concept of a post-nuptial agreement may seem foreign to the average person. However, the benefits of such an agreement can be vast and significant. Just as a prenuptial agreement is designed to set clear rules for the division of property and finances in the event of a divorce, a post-nuptial agreement helps clarify the terms of the marital relationship while both parties are still committed to the marriage. While a person may draw up a prenuptial agreement with the same intention, post-nuptial agreements are more advisory in nature, as the terms of such an agreement are drafted after marriage. For the most part, spouses will add such an agreement to their relationship in an effort to prevent future disagreements and litigation.
Many people seek out post-nuptial agreements when change in their relationship begins to surface. For example, when spouses begin to have severe finances troubles, or if one person has experienced career-related success, an agreement could help facilitate expectations. Many people have also discovered new perspectives on their spouse as a result of experience prior to marriage. Finally, if one or both parties have undergone significant lifestyle changes during their marriage, a post-nuptial agreement can help clarify expectations in relation to these changes.
Clarity is perhaps the most significant benefit of a post-nuptial agreement. Given that such a contract is created when both parties are aware of each other’s flaws and have extensive experience with each other, a post-nuptial agreement can bolster partnership in the relationship by establishing clear rules and expectations. Clarity can also help establish a sense of control over a potentially rocky relationship. Although no one goes into a marriage expecting to divorce, preparing for the worst can help maintain peace. Additionally, post-nuptial agreements can be beneficial in the context of celebrity relationships. Given the importance of public opinion in these kinds of relationships, pertinent agreements can help save face during personal crises.
Typical Provisions Included
Post-nuptial agreements in Texas can cover a wide range of issues and concerns, but most agreements will typically contain some or all of the following provisions:
Asset and Property Division
Certain items of property may be specifically designated by the agreement to belong to one spouse or the other. In some instances, a certain degree of financial compensation may be provided to the other spouse if the property in question cannot be readily divided, or if it would not be practical to do so.
Asset and property division can also take any of the following forms:
Net Worth Statements
This provision generally requires both spouses to disclose their full assets and liabilities through detailed statements. These are used to provide open and honest information that is used as the basis for other provisions of the agreement, such as asset and property division.
Inheritances
If either party stands to inherit any assets or wealth—either during the marriage or after the other spouse’s death—the terms of the post-nuptial agreement may state whether or not the other spouse has rights to inheritance.
Debt Responsibility
It’s possible that a spouse could take on a significant amount of unwanted debt through a post-nuptial agreement. As a result, it’s important that provisions are included that designate which spouse will be responsible for specific debts.
Child Custody and Support
If a marriage is still intact but the spouses are considering whether to have children, they may wish to include provisions regarding child custody and support in their post-nuptial agreement. These provisions typically outline how much support will be provided, how assets will be divided if the spouses become parents and what custody arrangements will be made.
Spousal Support
If the spouses are contemplating divorce and wish to designate specific provisions clarifying the circumstances under which alimony will be provided to the other spouse, a post-nuptial agreement can take care of that concern.
Drafting a Post-Nuptial Agreement
In order to draft a valid post-nuptial agreement in the state of Texas, the parties must freely and voluntarily agree to all terms and conditions of the document. When drafting this post-nuptial agreement, they must avoid any type of fraud, mistake, duress or coercion. Although the parties will work toward an amicable resolution, there will probably still be some tension involved. By the time they decide to enter into a post-nuptial agreement, they could be on the outs with each other. As a result, they should take their time and allow things to cool down a bit before tackling this critical legal task.
Both spouses have a complete understanding of the rights that are being given up and the rights that are being retained as a result of the agreement . Each spouse’s rights regarding division of property, occupation and support are clearly spelled out for them. Also, if there are children involved, custody and visitation rights, as well as child support obligations, are also clearly defined and agreed to by both parties. We highly recommend that the parties consult with a family law attorney during the drafting process so that they can be assured of accuracy and understanding.
Also, in order for the agreement to be valid and enforceable in a Texas court, the agreement must be written so that it meets all Texas requirements. The spouses must sign the document in front of a notary public who can witness the signing and put a notary seal on the document. When the parties have signed the document, it should be filed with the district clerk in the county where the spouses reside.
Challenges and Key Considerations
Like a prenuptial agreement, post-nuptial agreements are subject to legal requirements, such as:
A party was given an "unreasonable" amount of time to review it.
The agreement was not "fair" to the non-staying spouse when it was made.
The court found that the agreement was obtained through fraud, with deceit or misrepresentation.
The court found that the agreement is "unconscionable," a legal term that means "a serious and fundamental unfairness."
A spouse wasn’t voluntarily entering into the agreement.
Changes in life circumstances can sometimes trigger questions of a post-nuptial agreement’s validity.
If one party to a post-nuptial agreement loses a job, or otherwise has a material change to financial circumstance, can this be grounds for questioning or revoking the agreement? Divorce attorneys in Houston often see this type of case.
Some stay-at-home parents question a post-nuptial agreement as being a "trade of your future in exchange for discretion." This type of agreement, they say, is "meant to serve the financial security interests of the primary breadwinner rather than the long-term welfare of each spouse, including the children."
Being in a physically abusive relationship – or having married a spouse who is mentally unstable – can give rise to post-nuptial agreement challenges in Texas.
Enforcement and Modifications
Texas courts will generally uphold the terms of a post-nuptial agreement if it can be shown that the agreement was entered into voluntarily by both parties. Pursuant to the Texas Family Code, a post-nuptial agreement may be enforced by an order of specific performance by a court, which would require that the agreement be upheld. A post-nuptial agreement may also be enforced with a breach of contract law suit. Specifically , the Texas Family Code provides the following: Any interested party may petition the court to enforce or modify a marital property agreement. Alternatively, in order to make a successful breach of contract claim on a post-nuptial agreement, the party bringing the lawsuit must show that the other party breached the terms of the agreement. The majority of times, people voluntarily abide by the terms outlined in the agreement and breaches do not occur. However, if one party has violated the agreement, the other party is able to seek legal remedies for the harm caused.