Post-marital Agreements

Postmarital (or postnuptial) agreements can help spouses accomplish many of the same goals as premarital agreements. Partition and exchange agreements (or in other words, agreements that convert community property into separate property or separate property into community property) are an example of post-nuptial agreements. This kind of agreement takes place after a couple is married.

Partition and Exchange Agreements

The Texas Family Code states that “at any time, the spouses may partition or exchange between themselves all or part of their community property, then existing or to be acquired, as the spouses may desire. Property or a property interest transferred to a spouse by a partition or exchange agreement becomes that spouse’s separate property. The partition or exchange of property may also provide that future earnings and income arising from the transferred property shall be the separate property of the owning spouse.”

As stated above, Texas case law has held that once a property interest is transferred to a spouse pursuant to partition and exchange agreement, it becomes that spouse’s separate property. As far as formalities are concerned, a partition or exchange agreement must be in writing and signed by both parties, and is enforceable without consideration.

 


What Makes a Partition and Exchange Agreement Unenforceable?

A partition or exchange agreement is not enforceable if the party against whom enforcement is requested proves that:

  • The party did not sign the agreement voluntarily
  • The agreement was unconscionable when it was signed and, before execution of the agreement, that party:

(a) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party

(b) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided

(c) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party

In addition, spouses may also agree, at any time, that income or property arising from the separate property that is owned by them at the time of the agreement, or thereafter acquired, shall be the separate property of the owner.

Even the best postnuptial agreement can be damaged by the way one or both of the spouses handle their financial affairs after that agreement is signed. For instance, if property is intended to be separate, but it is commingled with community property so much that it cannot be identified in and of itself, then that community money may be lost to the community estate in the event of divorce. That’s just one example. There are many more that you should know about before embarking on postmarital agreement harmony.

A big point to remember with these agreements is that couples are generally agreeable when they are made. It isn’t until a divorce is begun that an agreement is attacked.

Once the concept of divorce is brought up, if the attorney who prepared it and advised you about how to live your financial life after it was signed was not an expert in the area of marital agreements, it will likely be too late to fix the mistakes.

The attorneys of Orsinger, Nelson, Downing & Anderson have the experience and skill to foresee the consequences of your post-marital agreement and advise you about how to avoid the dangers and traps. It takes decades of experience and a mastery of marital property law to prepare these documents the right way. Our family law attorneys have that experience.