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Prenuptial, Postnuptial, & Partition/Exchange Agreements

Prenuptial and postnuptial agreements are both legal documents that address what will happen to marital assets if a married couple divorces or one of them dies. Both agreements describe similar matters, including division of financial assets and payment of alimony. In addition, they may also concern retirement benefits. The main difference between the two is that a prenuptial agreement, often referred to as a prenup, is signed before the couple's marriage; a postnuptial agreement, often referred to as a post-nup, is signed after the marriage.

Premarital Agreement (Prenuptial Agreement)

Texas is a community property state, which means that all assets and property either partner in a marriage acquires during the marriage is jointly owned by both spouses. Anything a partner brings to the marriage is generally considered separate property as long as the assets are not commingled. A prenuptial agreement – called a premarital agreement in Texas law – is a legal document used to manage these potential issues by keeping as separate property what would otherwise be jointly owned or, in some cases, vice versa.

Generally, during the process of creating and executing a premarital agreement, the parties are going to have to disclose their assets/debts to the other party. Additionally, since a premarital agreement is planning for a future divorce (when the parties would be on the same side of a legal suit), it is strongly recommended that each potential spouse have their own attorney to review and advise them accordingly. The last thing that you want is to sign something you don't understand - and end up with an unforeseen horrible result.  

When a Premarital Agreement Is Needed

There are several reasons a prenup might be needed. Anytime a partner brings assets to the marriage that he or she doesn't want to become joint property, a premarital agreement may be needed in Texas. This property could be an inheritance, a business or future income earned from working in a career or from investments such as producing oil wells.

Premarital agreements are also often used when there are stepchildren. Texas law requires parents to shoulder responsibility for their birth children, but not for stepchildren. A premarital agreement can make sure that stepchildren get provided for after death or divorce using assets from the marriage.

A premarital agreement can also ensure that one partner will receive alimony. Texas law is not generally open to the idea of one spouse being required to support the other after divorce. However, if a premarital agreement specifies alimony, this can see that the lower-earning partner won't suffer financially in the event of divorce.

Premarital agreements are often avoided because they are seen as unromantic or likely to increase distrust between partners. They can also have important benefits, however. One is that negotiating a premarital agreement requires parties to have substantive discussions about each partner's income, assets and debts before getting married. Otherwise, these topics are often never discussed until after the ceremony, when they can become major bones of contention.

Texas Premarital Agreement Basics

There are few requirements for Texas premarital agreements. Primarily, the agreement just has to be in writing and signed by both spouses. Of course, it has to be signed before the marriage is official. Otherwise, it would be a post-martial agreement, which is a different sort of agreement. Also, it is only effective after the marriage is official. If the couple never goes past the engagement phase, the premarital agreement isn't effective.

In addition to specifying the conversion of community property into separate property or the reverse, and providing for financial support stepchildren and spouses, premarital agreements can address other concerns. For instance, a premarital agreement may require partners to keep using the family name.

A premarital agreement may also assign responsibility for certain expenses, such as paying for a child's education. It may describe specific financial effects of some types of behavior, such as infidelity. And it may lay out a preferred way to resolve any disputes, such as using mediation instead of going to court.

Limits of Texas Premarital Agreements

Premarital agreements in Texas can't determine everything about how assets will be parceled out in the event of divorce or death. For instance, they can't rule out or assign a cap to child support payments. Texas child support is determined by the court, usually using a standard formula based on the paying parent's income, and the premarital agreement can't affect that.

Premarital agreements also can't condone acts that would be illegal under state law, such as polygamy or being married to more than one person. And a premarital agreement may be ruled invalid if it can be portrayed as an attempt to defraud creditors by moving ownership of assets from one partner to the other.

Postmarital Agreement (Postnupital Agreement)

The major benefit of a post-nup is that it can be used if the couple does not have a prenup but it later seems like a good idea. A postnup can be used to address concerns raised by a significant change such as an inheritance received by one of the partners. It can also be appropriate if previously unknown knowledge about one partner's financial situation surfaces. For instance, it may be revealed that one partner has a large amount of debt.

Partition & Exchange Agreements / Agreement to Convert Separate Property to Community Property

Partition & Exchange Agreements are used by married persons. They are used to divide or exchange community property of the parties or other property to be acquired by the parties. The property divided or exchanged becomes separate property of each spouse. Additionally, 

Conversely, an Agreement to Convert Separate Property to Community Property is just like it sounds. It is an agreement by married persons to convert either party's separate property into a community asset. 

Cohabitation Agreements

Cohabitation laws in Texas recognize cohabitation agreements between unmarried couples. A cohabitation agreement is an agreement existing between two parties involved in an intimate and long-term relationship with each other who also live together.

Similar to a prenuptial agreement, cohabitation agreements typically provide detailed information on how assets, property, income, and debt will be divided between the parties if the relationship ends. Additionally, cohabitation agreements in Texas may include provisions for spousal support, including which party will receive support and the duration of support.

Cohabitation agreements can do more than just contemplate separation. They can also protect a couple's rights to act for one another. The lack of a formal marriage may deprive a partner of the authority to make decisions on behalf of their significant other when necessary.

Texas cohabitation laws permit cohabitation agreements to contain provisions appointing critical roles. For example, cohabitation agreements may address whether one party may act as conservator of the other if they become incapacitated or make health care decisions for the other in case of an emergency.

Aren't I Protected by Common Law Marriage Laws?

Many people believe that if they live together for a certain period of time, their relationship will be treated as a common law marriage.

Although Texas remains one of the few states that recognizes common law marriage, there is no specific length of cohabitation that establishes such an informal marriage. Instead, certain elements must exist for cohabitation in Texas to receive common law marriage recognition. These include:

  • The parties agree to be married;
  • The parties agree to live together as husband and wife; and
  • The parties represent themselves as married to others.

Texas cohabitation laws consider common law marriages equally valid as formal marriages.  However, it can sometimes be difficult to prove that you had a common law marriage. Therefore, for couples living together for an extended period, it may be wise to consider entering into a cohabitation agreement.

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