What Is the Difference Between a Prenuptial and Postnuptial Agreement in Texas?

Postnuptial agreements are entered into for various reasons, including:

• Protecting one or both spouse’s interest in an inheritance
• Protecting a spouse for debts accrued during the marriage
• Protecting children from a prior marriage upon the death of one of the spouses
• Determining each spouse’s roles and rights in operating a family business
• Negotiating estate planning issues, particularly where the spouses have children from prior marriages or unions
• Establishing the rights to and ownership of certain assets
• Establishing agreements about spousal support in the event of divorce
• How the community property will be divided in the event of a divorce

No matter what your reasoning is, it is important to understand how a postnuptial agreement works and how it differs from a prenuptial agreement.

What Is the Main Difference Between the Two Agreements in Texas?

Both prenuptial and postnuptial agreements allow the parties to agree on how to divide property if they divorce. The main difference between the agreements is that prenuptial agreements are entered into before marriage, and postnuptial agreements are entered into after marriage.

Which Is More Important to Create?

Depending on the circumstances, both prenuptial and postnuptial agreements can be very important. A prenuptial agreement will be very important if:

• One or both spouses is entering the marriage with significant assets or significant debt
• One or both spouses expect to gain a large inheritance during the marriage
• One or both spouses have children from a prior union or marriage
• One or both spouses have significant income earning potential

When circumstances change after a marriage, creating a postnuptial agreement may become very important. A postnuptial agreement may become important if:

• One spouse incurs significant debt during the marriage
• One spouse inherits a large amount of money during the marriage
• One spouse starts a business during the marriage
• If the parties want to partition property between themselves whether or not there is a divorce

When Should I Create a Prenuptial Agreement Versus a Postnuptial Agreement?

As noted, it depends. A couple may not own many assets when they first get married. Therefore, it may not make sense at the time to enter into a prenuptial agreement. However, if the parties accumulate assets over time during the marriage, if one spouse starts a new business, or if one person comes into a large inheritance during the marriage, it may start to make a lot of financial sense to enter into a postnuptial agreement.

Moreover, finances are one of the leading causes of stress and conflict in marriages. Couples sometimes discover only after they’re married that they have vastly different spending habits and/or attitudes about money. Agreeing to a postnuptial agreement may reduce simmering tension in a marriage over finances.

What Can a Prenuptial Agreement Protect that a Postnuptial Can’t Protect?

Texas is known as a community property state, which means that all property a couple acquires after marriage is owned equally by both persons. Therefore, subject to a few exceptions, everything you earn individually is considered equally owned by your spouse. Therefore, if you divorce, your spouse is entitled to half of what you earned during the marriage. However, your spouse won’t be entitled to your separate property, which generally includes property you owned before the marriage, plus certain other property, such as property you inherited during the marriage.

A prenuptial agreement in Texas can provide that certain assets that would be considered community property once you’re married will be considered separate property. For example, the prenuptial agreement could provide that each person’s separate earnings are to be considered those person’s earnings only.

It’s important to note that you can also agree in a postnuptial agreement that what’s typically considered community property (such as your earnings) is to be considered separate property. However, it may be more difficult once you’re married for one spouse to agree to this term if the other spouse is a much higher earner. Therefore, you may have a better chance of keeping your individual earnings as separate property if you enter into a prenuptial agreement.

What Can’t Be Included in a Prenuptial or Postnuptial Agreement?

The Texas Family Code specifically states that prenuptial and postnuptial agreements can’t adversely affect a child’s right to support. This means couples can’t agree to waive or relinquish the right to obtain child support in the event of a divorce. Furthermore, terms such as family matters or custody arrangements can’t be included in prenuptial or postnuptial agreements.

When Will a Prenuptial or Postnuptial Agreement Be Declared Invalid?

Parties can sometimes challenge the validity of a prenuptial or postnuptial agreement for various reasons. A court may declare a prenuptial or postnuptial agreement invalid if:

• One of the parties didn’t sign the agreement
• One party was not represented by counsel when the agreement was drafted and demonstrates they did not understand what they were signing
• One or both parties failed to fully disclose their financial situation
• The agreement was entered into under duress or coercion, or a party wasn’t mentally competent to sign the agreement
• The terms are unconscionable

Depending on the circumstances, the court could also decide to declare portions, but not all, of the agreement invalid.

In sum, if you’re planning to get married, or if you’re already married and your financial circumstances have changed, you should contact a Texas family law attorney to see if a prenuptial or postnuptial agreement is a good option for you.

Questions?

When entering into a postnuptial or prenuptial agreement, you must understand your rights and what you are agreeing to. Contact our experienced family law attorneys today for a consultation to understand what is best for you.