Articles Posted in Prenuptial Agreement

In some situations, a Texas premarital agreement can be used to protect the parties’ assets.  To be valid, a premarital agreement must be signed by both parties.  A wife recently challenged a trial court’s finding there was no enforceable agreement when neither party was able to produce a signed copy of the agreement.

Premarital Agreement

The appeals court’s opinion stated parties started their relationship around six months before the marriage.  The wife raised the issue of premarital agreement a month or two before the wedding.  The wife signed in front of the notary, but the notary refused to notarize the husband’s copy because he signed it before he arrived at the store and did not have his ID with him.

The wife testified she forgot what she did with the signed copies.  She said she thought she had an electronic copy on the husband’s computer, but he had taken the computer.

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iStock-481542709-300x179A couple may choose to enter into a Texas pre-marital agreement to protect their respective assets in the event of a divorce.  A pre-martial agreement allows the parties to agree on use, control, and transfer of property, characterization of property or income, disposition of property in a divorce, and a number of other issues.  In some cases, pre-marital agreements may lead to results that the parties did not consider.

Parties Signed Premarital Agreement

In a recent case, a husband challenged an award of attorney’s fees to the wife because their pre-marital agreement provided for property to remain separate.  According to the appeals court’s opinion, the parties signed the pre-marital agreement which provided that their pre-marital separate property and property acquired during the marriage would stay separate.  They married in 2016 and had a child the next year.

When the wife petitioned for divorce in 2018, she requested attorney’s fees.  She indicated she sought fees “[t]o effect an equitable division of the estate” and for the services she provided related to support and conservatorship of the child.  The trial court entered a final divorce decree in November 2019.  The husband was ordered to pay $14,900 in attorney’s fees, with $10,000 of that being paid directly to the wife’s attorney.

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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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