Prenuptial agreements occur prior to marriage
Community property is the joint ownership of property within a marriage and becomes an important factor during the dissolution of the union. The state of Texas promotes a ‘just and right’ law which means that the division of property is up to the discretion of the court alone and not based on a specific numeric figure such as a 50/50 split. However, couples can enter into a prenuptial (premarital) agreement that prevents the generation of community property in which case the court must abide by the terms laid out in the legal document. In essence, property owned prior to and acquired during the marriage by the individuals remains their personal property and cannot be split between them during the divorce process. This includes property bestowed as gifts, decent or devise to either party. It is important to note that the prenuptial agreement does not address community income (payment generated from the separate property), child support and must meet certain standards to be recognized by the court.
The premarital agreement and any modifications in Texas must be in writing (not verbal), signed and dated by both parties and is effective from the date of marriage going forward in the State Of Texas. For the agreement to be valid it must be:
Signed voluntarily by both parties and, Outline an accurate account of property, financial standing and obligations for each party,
This document is enforced without consideration and in order to prevent enforcement of the signed agreement the party must prove that one of the above points has been violated or that not enough time was not given for consideration of all the facts.
Post-nuptial agreements or Partition and Exchange Agreements in Texas
A Post-Marital Property Agreement in Texas is an agreement between husband and wife altering their rights in separate property, community property, or both. At any time, the husband and wife may partition or exchange between themselves all or part of their community property. This rule applies regardless of whether the property was in existence at the time of the agreement or is to be acquired after the agreement. A property agreement between husband and wife can change the character of the property involved. Property or a property interest transferred to a spouse by a partition or exchange agreement becomes that spouse’s separate property.
Couples can make the decision after they are married to transition their community property into personal property through the use of a postnuptial agreement (also known as partition or exchange agreement). By changing their rights from joint to personal they are separating the assets legally including any interest or income earned after this agreement is effective with each individual retaining sole decision-making power over the affected properties. It is important to note that the exchange agreement can change the character of the property so both sides need to be aware of how this works going forward.
Unless otherwise noted in the document or an addendum, income earned from separate property is considered owned by both parties (community property). This is why all documents of this nature should be detailed and clearly outlined with all properties being listed and any exceptions noted. Binding and legal agreements must be in writing and voluntarily signed by the husband and the wife and can be revoked at any time through mutual agreement. One of the benefits of the exchange agreement is that it can be adjusted or modified at any point with separate property transitioning back to community and vice versa depending on the needs and objectives of the couple. This document can be used in a variety of situations to protect individual holdings in the event of a divorce or need to combine property assets for financial reasons.