Marital Property Agreements
Getting married is an exciting time for anyone, yet it can also be incredibly stressful. Marriage is a massive commitment, and it requires a leap of faith for both parties. Not only do you pledge to join together emotionally for life, but under Texas marital property law, you are agreeing to join together your assets — which can be even scarier for many people.
Texas is a community property state, which means that any property that is acquired or income that is earned during the marriage is considered community property (subject to some exceptions). All community property can then be divided in a “just and fair” manner in the event of a divorce. Separate property, such as property that one spouse had prior to the marriage, or that he or she acquired through a gift or inheritance, is not subject to division.
Marital property agreements, whether Premarital (created before the wedding) or Post Marital (created during the marriage), can be one of your most valuable tools in avoiding a protracted and costly divorce. Such agreements can identify and clarify the intended marital property rights of the parties before conflicts arise during the marriage.
The Houston family law attorneys at Moffett Law Firm can advise you about the protections afforded by such an agreement and can represent you in the associated negotiation and drafting of any such agreement.
Prenuptial or Premarital Agreements
Prospective spouses may enter into a written agreement before marriage outlining their respective separate property, the characterization of property during marriage, and the treatment of their income during marriage. Such agreements are particularly important when one party comes into the marriage with a substantial separate estate owned before marriage. The agreement helps preserve your separate estate by clearly identifying the pre-marital assets and even agreeing that the income from such assets will remain your separate property.
A prenuptial agreement may not seem romantic, but in many ways, it offers a way for couples to communicate about their spending styles and overall financial goals in a way that many fail to do before they get married. Because stress over money is one of the leading causes of divorce, having this conversation may even help spouses stay together as they work together to assess their spending habits, their financial goals, and other matters.
However, the biggest advantage of a prenuptial agreement is the ability for both spouses to determine the rights to property before entering into a marriage. This can be particularly important for anyone who owns property prior to a marriage. With the help of a Houston family law attorney, a prenup agreement can be drafted that addresses matters such as which property is community property versus separate property, or how property will be inherited. In order to be valid under Texas law, a prenup agreement must meet four basic requirements:
- It must be in writing;
- It must be signed by both parties;
- Both spouses must have disclosed assets and liabilities prior to signing the agreement; and
- Both spouses must have waived the right to further disclosure.
If it is determined that one party did not sign a prenup agreement voluntarily, or one spouse did not fully disclose his or her assets and liabilities, then the prenup will likely be found to be invalid by a court.
The parties may even agree that NO community estate will be accumulated during the marriage and therefore, in the event of divorce, there would be no assets for the courts to divide.
Once parties are married, they can still enter into a marital property agreement. These Post-Marital Agreements can help resolve marital disputes between spouses by resolving property issues that create friction in the marriage, protect the assets of the parties, and the treatment and characterization of income earned during marriage.
A postnup agreement is also a good time to discuss financial goals. A couple can analyze their overall assets and debts as they list them in preparation for their meeting with a Houston family law attorney, including items such as separate and community property, unique assets and debt. A postnuptial agreement can achieve any number of goals, such as:
- Converting community property into separate property, or vice versa (known in Texas as a “Partition or Exchange of Marital Property”);
- Addressing tax liabilities in the event of a divorce;
- Assigning responsibility for separate or community debts;
- Determining roles, responsibilities and division of property for a family business;
- Listing division of property;
- Providing for the death of one spouse;
- Determining alimony or spousal support in the event of divorce;
- Setting up a framework for separation or divorce.
Prenup and postnup agreements can safeguard each spouse’s property rights in the event of a divorce or separation. It can also streamline the divorce process, because in many cases, the community and separate property determinations will have already been made. This can save substantially on attorneys’ fees and overall litigation cost. Whatever property is not covered by a prenuptial or postnuptial agreement would be subject to the community property laws of Texas.
Importantly, while prenup and postnup agreements have become more widely accepted in Texas and across the United States, there are certain standards that must be met and rules that must be followed so that they are enforceable. To that end, it is vital that you retain an experienced Houston family lawyer to draft a prenup or postnup agreement to ensure that your prenup or postnup agreement is valid.
Contact Moffett Law Firm to discuss how we can help you create a prenuptial or post-marital agreement that best fits your needs. Please call 713-333-5800 or contact us online to arrange your confidential consultation with one of our experienced family law attorneys.