I know what you’re thinking…. “I’m already married; how is it not too late?” Don’t worry; the solution is a postnup! The Texas Family Code allows for couples to enter into a postnuptial agreement (or marital property agreement), which will offer many of the same protections and advantages that a prenuptial agreement offers.
Current Property. At the time of marriage, both spouses often have separate property interests and liabilities that were acquired prior to marriage. Without a prenup, the spouses’ separate property estates often become commingled and indistinguishable from the community estate of the spouses that begins upon marriage, especially if the spouses have been married for a substantial period of time. For example, during marriage, a spouse may inherit a large estate from a relative, gifts, buy a house, sell or trade property, or put separate property money in the same bank account. Although you and your spouse did not execute a premarital agreement, it is not too late to distinguish your separate property in a marital property agreement.
Chapter 4 of the Texas Family Code, Subchapter B, outlines the statutory requirements and guidelines for a marital agreement. Section 4.102 states:
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.
Future Property. Like a prenup, the marital property agreement can also serve as a manual for property characterization for the remainder of the marriage. This function acts just like a prenup as it is often used to protect valuable estates, whether current or anticipated. Section 4.103 states:
At any time, the spouses may agree that the income or property arising from the separate property that is then owned by one of them, or that may thereafter be acquired, shall be the separate property of the owner.
Divorce. The marital property agreement can also set the terms and process of property distribution should the spouses decide to dissolve their marriage, including requiring arbitration, defining the amount and duration of spousal support, treatment of certain assets, protection of children of prior marriages, etc.
The terms of the marital property agreement can be creative and customized, depending on the needs of the spouses, families, complexity of the estates, and a large number of other factors. Other considerations are tax consequences, valuations, death, and creditors. These are issues to discuss with your spouse and your family law attorney. If you are married and wish to speak to one of our attorneys regarding a marital property agreement, please call the McClure Law Group today.