There has recently been much discussion about post nuptial agreements in three excellent blogs (Sam Hassler's Indiana Divorce & Family Law Blog, the New Jersey Divorce and Family Law blog by Victor Medina and New York Divorce Report by Daniel Clements), as well as The New York Times. The posts and newspaper article all mention how popular and more common post nuptial agreements have become. That seems to be the case here as well.
Post nuptial agreements are contracts between husband and wife dividing up all or part of the assets they own. The agreements are also known as partition agreements. They may be done for estate planning purposes to help manage taxes and to distribute assets according to the wishes of the owners. They may be done to protect a business from personal claims or to protect personal assets from business-related claims or debts. They may also be done to preempt or minimize divorce issues. There are many legitimate purposes for preparing such an agreement. Hopefully, having such an agreement will reduce tension between the husband and wife and clearly define their financial relationship.
Under Texas law, the agreement needs to be in writing and signed by both parties. There needs to be full disclosure of the assets and liabilities. The agreement must have been voluntarily entered into with adequate time for consideration. It is not required, but it is highly advised that both parties have an attorney to review and advise. Someone signing a post nuptial agreement without an attorney is taking an enormous risk. If the agreement is valid, it will not likely be set aside, even if it turns out to be very one-sided or unfair, which seems to be different from the law in Indiana, New Jersey and New York. In Texas, it's "signer beware"!
The safest way, for both parties, is to use the Collaborative Law process to reach an agreement on the terms of a partition or post nuptial agreement. That would address all the legal requirements and would assure that both parties really understood what they were doing and fully participated in the decision-making process. Even if the parties don't agree to use the Collaborative process, they should each have their own attorney so they can complete an agreement that is workable and appropriate for their needs.
Saturday, January 19, 2008
The Increasing Popularity of Post Nuptial Agreements
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