Can I Make a Marital Property Agreement?
There has been a lot of discussion about pre-marital agreements in media and it is something most people are probably somewhat aware of. Follow this link: Premarital Agreements in Texas for more information on premarital agreements. So, what about after you are married, are you stuck with all of your property acquired after marriage becoming community property if you didn’t execute a pre-marital agreement? Of course not! I probably wouldn’t have dedicated an entire blog post to this subject if that was the case.
Why Does it Matter?
In Texas, generally everything acquired after marriage is considered community property and everything you had before marriage is separate property. There are a few exceptions to this, but for the most part after you are married in Texas all of your income and property you acquire is community property and subject to being divided in a divorce or being subject to distribution by a probate court as a part of your spouse’s estate if they pass away. On the other hand, separate property is not subject to being divided in a divorce and is also not included in the other spouse’s estate upon death. There are lots of reasons why people may want to alter the characterization of their property and make it separate or community property.
What are the Requirements for the Agreement?
Chapter 4 of the Texas Family code lays out the requirements for marital property agreements and it also details what type of property can be included in the agreement. The requirements for a marital property agreement are very simple, it basically just needs to be in writing and signed by the parties. The formalities of the agreement become more complicated when it comes to actually enforcing the agreement. The code provides for defenses to the agreement and some standard language that can protect an agreement from becoming unenforceable because of one of the defenses. Another issue that may come up with a post-marital marital property agreement is attempting to defraud creditors by converting community property to separate property. The code provides that this is something that allows for a marital property to be invalidated.
What Types of Property Can be Included in the Agreement?
Not only can you convert your separate property into community property and the other way around, you can also include what you would like to happen to future income. Usually income acquired during marriage is community property as was described above, including income that comes from separate property (such as oil and gas payments or rent received from separate property). In a marital property agreement you can agree that income will be separate property and therefore not subject to being divided in a divorce or included in one spouse’s estate upon their death.
If you have any questions regarding a marital property agreement contact Guest and Gray and we can schedule a free consult to discuss your options