Often, there is room for negotiating the terms of a prenuptial agreement. When drafting a prenuptial agreement, most family law attorneys will throw in everything they can think of that is favorable to their client, with the understanding that their client will have to make some concessions later, and the agreement will have to be revised accordingly.
When one party has the bulk of the assets and income, the family lawyer representing the other party can often secure favorable terms. Creativity is the hallmark of a successful prenuptial agreement negotiation.
The family law lawyer’s perspective in negotiating a prenuptial agreement should assume that a divorce will occur, and contemplate how the client would be treated if there was no prenuptial agreement in place. This will depend on the length of the marriage, whether children are born, and what the client’s role in the marriage will be (primary breadwinner, homemaker), among many other applicable factors.
Courts are relatively likely to give effect to the parties’ agreement, unless the agreement was not signed voluntarily, or was unconscionable, and before signing it, was not provided a fair and reasonable disclosure of the property or financial obligations of the other party, and did not waive said disclosure, or did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.
After acquired property and alimony: the two critical areas
Two critical areas of focus in a premarital agreement involve property acquired after the marriage and alimony. Texas will not allow child support to be dealt with in a prenuptial agreement.
Property already owned by a party is generally exempt from marital rights, except for its income, regardless of whether there is a prenuptial agreement or not. So the property the parties acquire in the future; the payment of their joint debts; and, obligations after the marriage including alimony, commonly constitute the major focus of negotiations.
Specific matters that can be negotiated include:
- Guarantees of household operating expense accounts,
- Phased-in interests in property, such as a marital residence,
- Payment of attorney’s fees,
- Reasonable temporary expenses in the event of a divorce,
- Other matters.
Provisions for alimony based upon the length of the marriage, or the recipient party’s giving up a career or education are common. The amount and length of alimony payments often increase based on the length of the marriage. “Sunset” provisions, terminating maintenance waivers, or property waivers can also be included. These customarily provide that if the marriage lasts so many years, the provisions of the agreement are no longer enforceable, except as to previously owned assets.
What did the client give up at the time of marriage?
In reviewing a premarital agreement drafted by the other party’s attorney, the family law lawyer should never lose sight of what her client will be giving up at the time of the parties’ marriage. Most marriages where prenuptial agreements are being negotiated involve some blending of households, a sale of a residence, garage sales to dispose of duplicative furniture and furnishings, and the like. If the client is going to be selling her home and goods, the family lawyer should be sure to provide for some ability for the client to resume her former life in the event of the dissolution of the marriage, particularly where the marriage is of very short duration.
Also, if the client is entitled to receive maintenance (some agreements provide for continuing maintenance payments after remarriage), the agreement should provide that these sums will be sequestered from the “marital” estate, or subject to reimbursement for their contribution to the marital estate.