A pre-marital agreement serves two purposes. First, it controls how property will be owned and used during the marriage. Without a pre-marital agreement, any property purchased or income earned during marriage by either spouse is equally owned by both spouses. However, by way of example, a pre-marital agreement can have a spouse's income remain the exclusive property of the earning spouse or have gains during marriage from specific or all assets acquired prior to marriage remain the exclusive property of the owner-spouse. These are a few of the multiple options available in this regard. Second, a pre-marital agreement settles certain issues that arise when the marriage ends, either by death or divorce. For example, parties can arrange how property will be divided upon divorce. Parties can also decide if and how much spousal support will be provided. Decisions regarding disposition of property upon the death of a spouse can also be addressed.
A pre-marital agreement needs to be in writing and signed by both parties. Courts will not enforce a pre-marital agreement against a person in two situations. The first situation is when the person didn't enter into the agreement voluntarily. The second situation is when the agreement is unconscionable and all three of the following occurred to the person: (1) not provided a fair and reasonable disclosure of the property or financial obligations of the other party; (2) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and (3) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party. What makes a pre-marital agreement unconscionable is determined on a case-by-case basis. However, some factual situations courts have held not to be unconscionable include: an agreement signed shortly before the wedding; a party not represented by independent counsel; a "one-sided" agreement; and a party denying reading the agreement before signing. Clearly, any party challenging a pre-marital agreement has an uphill battle.
The great advantage of the pre-marital agreement is timing. The questions considered by the parties when drafting a pre-marital agreement are far more difficult to answer during the marriage and even more so at the end of the marriage. By making choices before marriage regarding their property, a couple greatly minimizes the conflicts and hostilities such choices can create farther down the road.
If you need assistance with preparing or reviewing a pre-marital property agreement, contact Sugar Land family law attorney Chikeersha Puvvada at 281-313-5300 or online today to schedule a consultation.