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Not all marriages need or should consider a premarital agreement, but many in many situations you really should consider it.

Consider these things:

What is a premarital agreement?

A premarital agreement, also known as a prenuptial agreement, is an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage. A premarital agreement must be in writing and signed by both parties.

Why should we consider a premarital agreement?

There are many reasons to enter into a premarital agreement, but most commonly the parties desire to clarify what they own as separate property and be certain they can maintain their own separate property without commingling it into the community estate which begins after marriage. It is much simpler to identify important separate property issues now as you marry, than reconstructing it at divorce. In addition, many factors can blur the lines of what is separate and what is community property after marriage when there is no premarital agreement.

Texas law presumes every piece of property owned at the time of divorce is community property.

Did you know that income earned by separate property is community property?

The income earned on separate property such as interest and dividends and rents are community property. If that income it reinvests back into the separate property account (such as a savings account, or mutual fund) then carving out what is separate and what is community can be difficult and expensive to prove. Some activities with accounts after marriage, can even cause the separate property to entirely commingle into community property. A premarital agreement can cure that problem.

It is the burden of the party claiming separate property to prove it to the court by “clear and convincing” evidence. That is a much higher standard than for other issues in a divorce case. To reconstruct and prove your separate property claim, you may have to employ an expert to trace back. That can be expensive.

Who should enter into a premarital agreement?

Situations in which a person has significant assets accumulated before the marriage, and/or was previously married, are the most common situations that I indicate a person should consider a premarital agreement. Also, perhaps a business entity exists prior to marriage and you want to protect the new spouse from liability from that enterprise and/or be sure the business is not interrupted because marital discord may arise later after marriage. Remember, all property in existence at time of marriage is presumed to be community property, and while a court cannot divest a person of their separate property it certainly can control it during the divorce proceeding. A premarital agreement can avoid that situation.

Anyone who wants to preserve separate property. Anyone who wants to maintain all future income as separate and not create a community property estate.

When should the premarital agreement be prepared and signed?

As far in advance of the planned wedding as is reasonably possible, certainly not days before the wedding. If there is duress in signing the agreement, it may be later be determined that the party did not sign the agreement voluntarily or did not receive fair and reasonable disclosure of the property or financial obligation of the other party. Start the process early before the emotions of wedding preparation began.

Talk to an attorney who is knowledgeable in this area. Call us we can help you.

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Jarrie and Daniel McCarty, Attorneys at Law

Areas of Practice

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16225 Park Ten Place Blvd., Suite 500
Houston, TX, 77084
Phone: 713-467-9990

Also offices in Northwest Houston and Sugar Land/Fort Bend
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7000 N. MoPac, 2nd Floor
Austin, Texas 78731
Phone: 512- 472-0606