Texas Divorce Attorney Blog
Texas courts tend to hold a hard line on enforcing premarital agreements, and a spouse seeking to have it overturned must satisfy the specific requirements established by the Texas Family Code. A recent Dallas appeals court decision illustrates why an agreement will not be invalidated even if one party is disadvantaged at the time of the drafting and signing.
The Potyondy Prenuptial Agreement
Brendan Potyondy and Meredith Potyondy met in Austin. At the time, Brendan worked in the oil and gas industry and had accumulated assets before the marriage, whereas Meredith did not. After numerous drafts, the parties signed a premarital agreement two days before their wedding. Meredith did not have her own attorney representing her in connection with the agreement. In re Marriage of Potyondy, No. 05-24-00312-CV.
The agreement contained detailed financial disclosures which showed that Brendan entered the marriage with a net worth of approximately $91,100. In contrast, Meredith’s net worth was approximately negative $59,450, producing an asset discrepancy of approximately $150,550. The agreement provided for an equal division of community property upon divorce, with Brendan receiving an additional $75,275 to account for the premarital asset difference.
During the divorce proceedings, Brendan sought enforcement of the premarital agreement.
The Trial Court’s Finding
The trial court declined to enforce the agreement and found that it was unconscionable when signed. Among other things, the court noted that the agreement had been signed only two days before the wedding, that Brendan was the only spouse represented by an attorney, and that Meredith was young and inexperienced.
Under Texas Family Code § 4.006, a premarital agreement is unenforceable if the spouse opposing enforcement proves either that the agreement was not signed voluntarily, or that it was unconscionable when signed. The statutory requirements concerning financial disclosure were also satisfied.
The Appeals Court Focused on Financial Disclosure
The Fifth District Court of Appeals held that the trial court had applied the statute incorrectly. Section 4.006 requires a spouse challenging an unconscionable premarital agreement to prove three additional disclosure-related elements: inadequate disclosure, no voluntary written waiver of additional disclosure, and lack of adequate knowledge, or the reasonable ability to obtain adequate knowledge, of the other spouse’s property and financial obligations.
The trial court made findings concerning the first two disclosure elements but did not find that Meredith lacked, or reasonably could not have had, adequate knowledge of Brendan’s property and financial obligations. The appeals court held that this missing element mattered because Meredith bore the burden of proving the statutory requirements necessary to overcome the agreement’s presumed enforceability.
The agreement itself further undermined that missing finding. Meredith had acknowledged that she had received fair and reasonable financial disclosure and that she had, or reasonably could have had, full knowledge of Brendan’s property and financial obligations. The appeals court also noted that the record contained the parties’ asset and liability schedule, and there was no finding that the disclosures were inaccurate when made.
The Holding and What It Means for Texas Divorce Cases
The appeals court reversed the portion of the judgment declaring the premarital agreement void and remanded the case for a new property division consistent with the agreement.
The case demonstrates that challenging a Texas premarital agreement requires more than showing that the agreement was one-sided or signed under circumstances that, in hindsight, appear unfavorable. The statutory requirements of Texas Family Code § 4.006 must be addressed individually, and a failure to establish the required elements can prevent a court from setting aside the agreement.
If You’re Questioning the Enforceability of Your Premarital Agreement, Speak with a Dallas Family Law Attorney
For spouses involved in a Texas divorce, the enforceability of a premarital agreement can substantially affect the characterization and division of marital property. McClure Law Group can assist clients in evaluating the agreement, the circumstances under which it was signed, the financial disclosures provided, and the statutory requirements governing enforcement. Connect with our team today; call (214) 692-8200.