Assets play a much larger role in marriage than one may think. Assets and financial ties that are brought into a union can often be a driving factor in divorce proceedings if not adequately addressed. Because of this, prenuptial agreements are typically utilized to ensure certain parameters are set for how assets and property will be divided in the event of divorce. However, if a couple gets married without a prenup, a postnuptial agreement is an option. Understanding how assets can be protected by a postnuptial agreement can help give spouses peace of mind that their interests are being protected.
What is a Postnuptial Agreement?
Despite what one may think, pre and postnuptial agreements are fairly similar in nature. A postnuptial agreement is a legally binding contract signed by a couple after they are married. These agreements can dictate how a couple’s assets will be split should the marriage end in divorce. In order for a postnuptial agreement to be valid, it must meet the following criteria:
- Be formalized in a written document
- Be voluntarily executed by both parties, as signs of coercion can invalidate it
- Disclose all assets owned by each spouse, as well as liabilities and income
- Be fair to both spouses
It’s important that an attorney review a proposed postnuptial agreement to ensure all necessary elements are contemplated within the agreement and that it is fair. If the marriage is dissolved, the postnuptial agreement must be upheld; however, a judge has discretion to throw out a portion or the entirety of an agreement in the event they determine it is punitive or unreasonably one-sided.
When a Postnuptial Agreement is Necessary
Although not necessary for all marriages, there are certain situations where spouses should opt for a postnuptial agreement, including:
Significant Assets
Postnuptial agreements should be considered for spouses who either enter the marriage with significant premarital assets or for those who are expecting to inherit significant future assets. In these instances, postnuptial agreements can help ensure that if a divorce does occur, each spouse will exit the marriage with the designated holdings of their choosing.
Children From a Previous Relationship
In situations that involve children from previous relationships, a postnuptial agreement can help ensure those children will receive the assets and inheritance their parent intends for them. Without a valid postnuptial agreement, the current spouse often automatically receives a share of their spouse’s estate upon divorce or death.
No Prenuptial Agreement
Some couples that intend to execute prenuptial agreements don’t make it happen in time or even choose to wait instead, opting for a postnuptial agreement instead. This is sometimes because they would rather get married first before deciding to negotiate their assets. Some couples may find that they are better equipped to fully assess the details of their personal finances and what is being brought into the relationship after the marriage has occurred.
Postnuptial Agreements in Texas
In Texas, postnuptial agreements may also be known as partition or exchange agreements. According to the Texas Family Code, in these agreements, “at any time, the spouses may partition or exchange between themselves all or part of their community property, then existing or to be acquired, as the spouses may desire. Property or a property interest transferred to a spouse by a partition or exchange agreement becomes that spouse’s separate property. The partition or exchange of property may also provide that future earnings and income arising from the transferred property shall be the separate property of the owning spouse.”
Brazoria County Divorce Attorneys
When considering marriage, it’s important that all assets and finances being brought into the union are accounted for. While the stress of drafting a valid postnuptial agreement can be daunting, with the help of an experienced family law attorney, couples can have peace of mind in knowing their assets are taken care of. At Terry & Roberts, we can help you plan for your future by drafting prenuptial and postnuptial agreements. Contact our experienced legal team today for more information on how we can help to protect your assets.