What is a Postnuptial Agreement?

A postnuptial agreement is a legal document created after marriage that outlines the separation of property and finances between two partners in the event of a divorce. The State of Texas has outlined the following criteria that must be met for a postnuptial agreement to be considered valid and enforceable:

  • It must be submitted in a formal, written document that both parties sign.
  • It must contain a complete and accurate disclosure of all assets and liabilities of both parties.
  • The agreement must be entered without fraud, duress, or misrepresentation by either party.
  • The agreement must be fair and reasonable to each party.

How is a Prenuptial Agreement Different Than a Postnuptial Agreement?

Prenuptial and postnuptial agreements are the same in almost every way. The main difference is that a prenuptial agreement is completed before marriage, while a postnuptial agreement is legally filed after a union. The main purpose of both of these agreements is the protection of assets from both parties if a divorce were to occur. These documents outline a pre-negotiated agreement for the way assets and other financial entanglements will be divided.

It is important to note that child support and child custody clauses are not allowed in a prenuptial or postnuptial agreement, and including such provisions may result in an invalid contract.

When is a Postnuptial Agreement Beneficial?

As stated, the purpose of a postnuptial agreement is to protect personal assets if a divorce were to occur. This document may be particularly beneficial to individuals with high-value assets or business interests that should be kept separate from a marital estate. A postnuptial agreement is typically created when:

  • One party wins a substantial lottery payout or settlement.
  • One party inherits money or property.
  • A parent wishes to provide specific familial distribution.
  • One party owns a successful business in which the other partner has also invested.
  • Both parties wish to record specific asset distribution for vacation or investment properties, vehicles, or other items.
  • Each party wishes to maintain separate bank or retirement accounts in the event of a divorce.
  • One party has accumulated a large amount of debt.
  • One party believes that the marriage may soon end.

How Does a Postnuptial Agreement Protect Personal Assets?

If a prenup or postnuptial agreement has not been submitted and a divorce occurs, then the marital property will be subjected to distribution and division through the court system in a fair manner that does not necessarily mean equal.

 Texas Family Court distinguishes marital property as any property acquired after marriage, regardless of which party financed the property or whose name is on the title. Examples of marital property typically include:

  • Real Estate
  • A business
  • Cars or other vehicles 
  • Retirement or other financial accounts

 Separate property is property or assets obtained by either party prior to marriage and is usually not subject to division. Separate property includes:

  • Property owned or claimed by either party prior to marriage
  • Property acquired by one party as a gift, devise, or descent
  • The monetary recovery for injuries sustained by one party during the marriage, except recovery for loss of earning capacity

Without the use of a prenuptial or postnuptial agreement, the court will consider the following factors to determine which party is awarded specific assets:

  • The length of the marriage
  • Medical or educational needs of either party
  • The earning capacity of both parties
  • The financial and non-financial contributions of each party to the marriage
  • Any conduct by either party that contributed to the downfall of the marriage
  • Prior assets and tax consequences of awarding assets to each party
  • Other relevant factors

When a postnuptial agreement has been filed, the division of property has already been agreed upon and can be completed without the intervention of the court system. This will ensure each party is able to retain their assets and interests in the event of a divorce.

What Should be Remembered When Negotiating a Postnuptial Agreement?

The most important aspect of filing or negotiating a postnuptial agreement is to have it reviewed by an attorney. This will ensure that both parties are being considered and treated fairly and that there are no unnecessary stipulations that may nullify the contract.

Never sign a postnuptial agreement under duress or persuasion. There are no circumstances where it is beneficial to sign the document in a rush or without the consultation of a lawyer.

When Can a Postnuptial Agreement Be Broken?

There are certain specific instances when a postnuptial agreement may be nullified or not enforced, such as:

  • The contract was not signed voluntarily: This stipulation requires proof that the document was signed under duress, pressure, or other evidence of fraud or misinformation. Proof of this may lead to changes or invalidation of the agreement.
  • Incorrect information: If the information submitted was unintentionally incorrect at the time of signing, then the document may be broken or altered. Proof of this includes the following:

                ◦ One party lacked a complete understanding of the spouse’s assets.

                ◦ One party did not receive a full disclosure of the spouse’s property and other financial resources.

                ◦ One party did not sign a waiver to release the other spouse from full disclosure of income, assets, and liabilities.

  • Change of an asset: When a separate asset is changed to be considered a marital asset that will be divided upon divorce, this change may be enough to nullify the entire document.

Do I Need an Attorney?

If you are considering a postnuptial agreement, then you need dependable legal help to guide you and ensure that your needs and future are being protected. Call Cutrer Law Group today at 817-854-1651 or fill out a contact form for a free consultation.