Articles Posted in Prenuptial Agreement

iStock-1287431987-300x200Texas prenuptial agreements may include a provision requiring arbitration in the event of a divorce.  The Texas Family Code includes provisions making arbitration of divorce cases different from the arbitration of other types of cases.  A wife recently sought mandamus relief after the trial court ordered arbitration pursuant to a prenuptial agreement.

Parties Executed Islamic Premarital Agreement

According to the court’s opinion, the parties had executed an “Islamic Pre-Nuptial Agreement.” It included a provision requiring resolution of conflicts in accordance with Islamic law by either in a Muslim court or by a three-member Fiqh panel.

The wife denied knowing the contents of the agreement when it was executed.  She claimed she thought it was a second copy of the parties’ marriage contract.

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Premarital agreement

Some Texas premarital agreements may include a binding arbitration clause. A party may compel arbitration when the claims at issue are within the scope of a valid and enforceable agreement to arbitrate.  If the claim falls within the agreement’s scope and there is no defense to enforcing it, the court must compel arbitration. Fraud may be a defense against compelled arbitration, but the party must show that the fraud was specifically related to the arbitration provision.

A husband recently appealed a denial of his motion for arbitration in his divorce proceeding.  The parties signed a premarital agreement that included an arbitration clause. The wife filed a petition for divorce in July 2014.  In 2016, she filed an amended petition.  Neither petition mentioned the premarital agreement.  The husband filed an answer in 2016, but did not mention the premarital agreement either.

In a second amended petition, the wife stated there was a premarital agreement and requested it be set aside and vacated.  She alleged she entered into it involuntarily and that it was unconscionable.

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iStock-654702696For many Texans, their 401(k) plan is one of their largest assets – particularly for those who have made regular contributions throughout their career. On top of that, 401(k) plans often hold symbolic significance above and beyond their sheer dollar value. To some, they represent safety, security, and an end to the monotonous rat race. For others, they are a prize, a badge of honor earned after countless late nights at the office. However, no matter the role they play in your life, the thought of losing half of your hard-earned nest egg can be terrifying. This begs the question: how much of your 401(k) is actually at stake in a Texas divorce? Continue Reading ›

iStock-1215119911A Texas premarital agreement can help protect each party’s assets in the event a marriage ends in divorce. Premarital agreements may also include other provisions, including a requirement to submit certain issues to binding arbitration instead of for determination before a judge or jury. In a recent case, a husband attempted to vacate an arbitrator’s decision, arguing he had exceeded his authority.

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With such close geographic proximity, the legal issues that arise in a Texas divorce case occasionally transcend our border with Mexico. In a recent opinion, one Texas court explored the intersection between the laws of Mexico and Texas and whether a Mexican premarital agreement is valid and enforceable in Texas. Continue Reading ›

As a result of his illustrious career, Dr. Dre’s net worth currently sits at a whopping $820 million – but maybe not for long. After 24 years, Dr. Dre’s wife, Nicole Young, is filing for divorce from the producer, rapper, and hip-hop icon. Reports indicate that the couple did not execute a premarital agreement prior to their 1996 marriage, which opens up Dr. Dre to significant financial exposure. In the absence of a premarital agreement, California – a community property state much like Texas – provides that property accumulated during marriage is owned by the community estate. Put simply, all of Dr. Dre’s income during the marriage, from his royalties as a solo rapper to his profits from Beats by Dre, is up for grabs. This means that Dr. Dre could see his hard-earned fortune be split in half right before his eyes in the coming months. Continue Reading ›

In a Texas divorce, a premarital agreement is generally enforceable.  Although they are presumptively valid, they may not be enforceable if they are unconscionable or were not voluntarily signed.  There is no definition of “voluntary” in the Family Code, so courts have looked to the law governing enforcement of commercial contracts.  In determining if a premarital agreement was voluntarily signed, the court considers whether the party had advice of counsel, misrepresentations made in procuring the agreement, the amount of information provided, and whether any information was withheld.  Additionally, the court may consider evidence of duress or fraud in determining if the agreement was voluntary, but duress and fraud alone are not defenses to a premarital agreement.  A court recently considered whether a Texas premarital agreement was voluntary.

The couple signed a premarital agreement the day before they got married in Las Vegas.  The agreement set out the separate property of each of them and stated community property could not be acquired during the marriage.

The wife filed for divorce after ten years.  The trial court granted a partial summary judgment in favor of the husband on the wife’s claims for a Separate Property Agreement, including reimbursement, maintenance, and her challenge of the premarital agreement.  Following a trial, the court found the only community property accumulated during the marriage was a travel trailer.  It awarded the trailer to the wife.  The wife appealed, arguing the court had erred in granting the partial motion for summary judgment because there was a genuine issue of material fact as to whether she had voluntarily signed the agreement.

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Texas is a community property state, and property acquired during a marriage is generally distributed equitably at the time of a Texas divorce.  However, couples may enter into premarital agreements, also known as prenuptial agreements, that alter the way property will be identified and distributed if a divorce should occur.

A premarital agreement played a significant role in one recent case.  Before marriage, the couple executed a premarital agreement that identified the separate property belonging to each party and precluded the acquisition of community property during the marriage.  They had two children together.  The wife filed for divorce after seven years.

The parties agreed to a joint managing conservatorship.  They stipulated there was a premarital agreement, and neither challenged its enforceability.  The trial court ultimately entered a final decree.    The court also confirmed certain real property was the wife’s separate property.  It also found the husband had breached the premarital agreement by raising a claim against that property and awarded attorney’s fees to the wife.  The court modified the standard possession order by not allowing overnight visits with the father on Thursdays and Sundays. The husband ultimately appealed.

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In Texas, all property possessed by either spouse at the time of divorce is presumed to be community property under Texas Family Code § 3.003. A recent appellate case arose out of the divorce of a Texas couple who had been married in Mexico in 1999. In Mexico, they got their civil marriage application, which required them to choose between two marriage property systems, separate property or community property, in order to regulate ownership of their items of property. They chose to have separate property.

In 2015, the wife sued for divorce. She asked for the community property to be divided disproportionately. The husband counterclaimed and stated that he and his wife had to have separate property. He attached a facsimile of the couple’s marriage certificate that included the agreement to have separate property during the marriage, but the certificate wasn’t signed.

At trial, an expert testified for the husband and provided the opinion that in Mexico, a marriage application is treated as a prenuptial agreement. The husband testified that the couple signed the application, but the wife testified she didn’t remember signing the application. She claimed only the husband handled the paperwork, and she didn’t even remember talking about choosing a property regime before the wedding.

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In re Interest of HDV arose when a husband appealed a final divorce decree, arguing among other things that the trial court had erred in awarding his wife money and property under their premarital agreement. The couple had entered into the agreement, which included a provision that there would be no community property, months before their marriage in 2003. The husband obtained a judgment that it was enforceable. While married, the couple had two kids.

The wife filed for divorce in 2010, and the husband counter-petitioned. The court ordered the husband to pay the wife’s attorneys’ fees on a temporary basis. The couple agreed to a parenting trial just before the court held a bench trial on the financial issues in 2014. The parenting plan was incorporated into the decree, which affirmed that the premarital agreement was valid and that there was no community property. The court awarded the husband and the wife, respectively, all of the property that he or she possessed. It awarded the wife as separate property a 2002 car. It also ordered the husband to pay the wife an allowance of $30,000, plus $3 million.

The husband appealed, arguing that the trial court shouldn’t have awarded the wife money and property based on the premarital agreement. The premarital agreement had stated that upon death or divorce, each party would receive their separate property, and the husband would make a payment to the wife based on how long the marriage lasted. In this case, the provision about a five-year marriage applied. Based on the provision, the court calculated the husband’s net worth from the date of the filing of the divorce petition, and it accordingly found that the husband had to pay the wife $3 million.

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