Texas Partition And Exchange Agreements

Partition Agreement – Texas

Sometimes spouses can agree to change the characteristic of community property or separate property or both.  These kinds of agreements are referred to as “marital property agreements”. The following are the three types of marital property agreements:

• Partition or exchange agreements
• Premarital agreements
• Converting separate property to community property agreements

Community Property Agreements

Details about spouses partitioning or exchanging community property between themselves are in the Texas Family Code section 4.102.  The 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.

Creating Separate Property

Property or a property interest transferred to a spouse by a partition or exchange agreement becomes the spouse’s separate property. The partition or exchange of property may also provide the future earnings and income arising from the transferred property shall be separate property of the owning spouse.”

Marital Property Agreements

Pre-Marital Agreements

These are agreements that couples sign before they get married to modify or eliminate community property rights.  They are meant to change the way Texas courts will treat the rights of the couples in the event of divorce or death of either spouse.   For example, an agreement may include a section that specifies that the couple cannot create a community property, or ask for spousal support in the event of a divorce.  However, the agreement cannot limit a spouse’s right to child support, and cannot be used to defraud third-party creditors.

Agreements Converting Separate Property to Community Property

A spouse may decide to convert separate property into community property.  Separate property includes:

• The property owned or claimed by the spouse before marriage
• The property acquired by the spouse during marriage by gift, devise, or descent; and
• The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss or earning capacity during marriage

However, community property, other than separate property, obtained by either party during marriage. Agreement for converting separate property to community property can be done as a loving gesture or for purposes of inheritance or taxation. However, only currently existing property can be converted from separate property into community property. This is why you and your spouse are required to specifically identify the property that you are converting. This agreement actually makes the spouse converting their property lose management rights over the property, and subjects that property to the debts of the other spouse.  This kind of agreement is done by a couple that is already married.

Enforcing Marital Property Agreements

For these to be enforceable, the agreements must be in writing and each spouse must sign the agreement voluntarily. The agreement must also not be unconscionable when it is signed.   An unconscionable agreement is an unfair agreement. In other words, it is an agreement that was made without considering factors like having attorneys present when the agreement was being signed and so on.  These conditions and others exist to protect each spouse in the event that they decide to separate or divorce. Texas Family Code Section 4.006 has all the details about the enforce-ability of these agreements.

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