community income

A Court in Houston recently reinforced the importance of honesty and full disclosure during the Collaborative Law process when it found that a husband potentially committed fraud by failing to disclose changing job circumstances. See Rawls v. Rawls, 2015 WL 5076283 (Tex. App.–Houston [1st Dist.] 2015, no pet.).

A husband and wife in Houston chose to use Collaborative Law to complete their divorce proceedings in 2014. They successfully reached a settlement that included provisions for the wife to receive portions of her husband’s bonus over the next few years. Unfortunately, before the settlement agreement was signed, the husband received a job offer, which he failed to disclose to his wife, and he resigned from his job. Full and complete disclosures of such information is a critical part of the Collaborative Law process, because the goal is to make both parties feel safe to make informed decisions. The Houston Court is currently examining whether the husband committed fraud and breached a fiduciary duty under the Collaborative Law agreement he signed by concealing his job change from his former spouse during the collaborative law process. Continue Reading ›

The short answer is “yes.” Texas Courts tend to enforce prenuptial agreements and postnuptial agreements. Section 4 of the Texas Family Code states that Courts should enforce marital agreements unless the party trying to invalidate the agreement can prove the following:

The party did not sign the agreement voluntarily; or
The agreement was unconscionable when it was signed and, before signing the agreement, that party: (a) was not provided a fair and reasonable disclosure of the property of 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; and (c) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Should you stand to inherit family money, you should know that any inheritance is your separate property. So, your spouse is not entitled to any funds you have inherited or were gifted from your family whether before or after marriage. However, a prenup is still encouraged. The reason being is that should you make income off your inheritance, invest into your community estate, or comingle inheritance with your community income or estate, your spouse will be entitled to a portion of the money- especially if you cannot trace your separate property funds.

Articles Tagged with community income

Court Emphasizes Importance of Honesty During Collaborative Law Divorce

Are Prenups Worth It?