You are married but not everything that is yours is your spouse’s…Right? While it is not something that is particularly common, you want to divide out certain property during your marriage rather than waiting and seeing what would happen upon a divorce or death. You want to ensure that you know what you would have and you know what your spouse would have. There are a couple of options to do so but there are specific statutory guidelines that must be followed to ensure that these agreements are airtight in case an enforcement or divorce ever rolls around.
If you wanted to agree that certain community property (all property acquired through marriage unless by gift, devise or descent) that you currently own or that you will acquire shall be a certain spouse’s separate property, then you would need a partition/exchange agreement. Texas Family Code Section 4.102 governs this particular type of agreement and states that whatever property is divided through this type of agreement then becomes the recipient spouse’s separate property. For example, if you and your spouse buy a home together that is your community property (let us assume for easy example sake that the home is paid off). If you and your spouse decide that you want to gift that home to one of you (like a husband to a wife or vice versa) then you may do so. The requirements of this type of agreement are as follows: (a) it must be in writing; (b) it must identify the community property being partitioned or exchanged; (c) the writing must contain the specific intent of the parties—it must state that the parties intend to partition or exchange the community property into separate property; (d) the agreement itself must have the effect of actually partitioning or exchanging the property; it cannot be that a future action must occur in order for it to take effect; (e) you do not need any consideration to make it valid—no payment or exchange of money is required; (f) before each spouse signs the agreement there must be full disclosure of both spouse’s financial obligations and property to each other; (g) it must be signed by both spouses; and (h) it must be notarized. You must have all of these elements completed in order to establish an enforceable agreement should the need arise. However, even if you have all of these elements, it does not mean that the other spouse cannot or will not challenge the agreement.
The other type of post-marital agreement is called a conversion agreement under Texas Family Code Section 4.202. This agreement does the reverse of a partition/exchange agreement—a conversion agreement allows spouses to convert separate property into community property. For example, you have a home that is paid off that you bought prior to getting married and then you get married. That home is your separate property, even upon divorce it is yours and it cannot be awarded to your spouse. However, sometimes spouses want to convert their separate property into community property which would then make that home partially your spouse’s. A reason a married couple might do this would be for tax purposes. The requirements of this type of agreement are much like the partition/exchange agreement and are as follows: (a) in writing; (b) must identify the property being converted; (c) must contain the fair and reasonable disclosure of the legal effects of converting separate property into community property—basically, put both spouses on notice as to what they are doing with the conversion agreement; (d) consideration is not required; (d) must be in writing; and (e) must be notarized.
As you can see, post-marital agreements are specific and statutory documents that should not be taken lightly. We just covered the basics here but there are many things to consider when drafting and agreeing to one of these types of instruments. If you have any questions regarding any of these types of agreements and want to get more information or have an attorney draft one, contact Guest and Gray Law Firm today.