A marital property agreement is a contract, and the law of contract interpretation applies. Every word means something. When changing an existing prenup or postnup, or working initially from a form template, correct wording and ensuring the document is consistent throughout is essential. Therefore, any changes to a prenup or postnup should be made by an experienced family law attorney.
In October 2015, the Amarillo Court of Appeals reminded us again about the importance of each word in a prenuptial or postnuptial agreement. In the Estate of Loftis, the court dealt with a prenup.
Before marrying, Jim and Rosemary Loftis signed a prenuptial agreement that required the husband to leave a house and a car to the wife if he died first. If they divorced, each would keep his and her own separate property, including houses and cars. In divorce, Rosemary would receive nothing. Two months after taking Rosemary’s name off his house and putting his son’s name on it, Jim filed for divorce. While the divorce was pending, Jim died.
The Court of Appeals looked at the entire document. Even though Jim removed Rosemary from the house two months before filing for divorce, the Court said it is bound by the words of the prenup, not what we assume about Jim’s intent. It is likely that when Jim filed for divorce he no longer wanted Rosemary to get his house.
After reviewing various sections of the prenup, the Court of Appeals said the language is clear: If the parties divorce, Rosemary gets no house or car. If Jim dies while they are still married, Rosemary gets a house and a car. The prenup did not say what would happen if Jim died while a divorce was on file. Even though a divorce was on file, Jim and Rosemary were still legally married when he died. Rosemary gets the house and a car.
We can speculate that the original first draft of the prenup started with a basic document template used by many lawyers in Texas. This document keeps everything separate and states there will be no community property. Under this document, everything in Jim’s name would have been his separate property. Whether they divorced or remained married, each would keep his and her own separate property. With the basic document template, there is no need to address the circumstance of someone dying while a divorce is on file. It doesn’t matter because everything is separate property whether married, divorced, or dead.
In Jim and Rosemary’s case, the basic document template was modified so Rosemary was guaranteed to receive a house and car on Jim’s death. That meant the document was no longer consistent. Part of it said all is separate property, and another part said Rosemary was guaranteed a house and car if Jim died. If the document had a section about death while the divorce is on file, that could have been avoided.
People sometimes request a change or modification to our standard prenuptial or postnuptial marital property agreement thinking it will only take a moment to change one part. As Jim’s heirs found out, changing one part of a document without reviewing the rest for consistency is dangerous. The entire document must be reviewed to avoid other inconsistencies. Otherwise, there can be inconsistent provisions and unintended outcome.
Modifying a new or existing standard prenup or postnup involves much more than changing a word here and there. Sometimes an addendum to an existing document is sufficient. An experienced family law attorney must still read the entire document to make sure the addendum does only what is intended.
Only a lawyer experienced in family law and marital property agreements should write or change a prenup or partition agreement (postnup).