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Most people have heard of pre-marital agreements commonly referred to as “prenups.” However, few people have heard of post-marital or marital property agreements. Post-marital agreements allow spouses to accomplish many of the same goals as premarital agreements but are executed during the marriage. I think it’s important to shed some light on this lesser-known document.
What is a Marital Property Agreement?
Marital property agreements provide a way for married couples in Texas to bypass the rules of characterization – separate versus community property. The primary purpose of a marital property agreement is to define what will be community and what will be separate property during the course of the marriage. For example, the agreement can provide that income from separate property will remain separate property. Essentially, this legally binding agreement allows a married couple to create rules to govern their property that are different than the rules in the Texas Family Code and the Texas Constitution.
Additionally, the agreement can govern the disposition of property on separation, divorce, or death. Furthermore, the agreement can waive any homestead allowance, personal property set aside, and family allowance to which a spouse may be entitled.
A valid premarital or post-marital agreement can contractually eliminate the creation of community property by legally partitioning property to each spouse as it is acquired thereby eliminating disputes over the division of assets in the event of a divorce. In addition to issues relating to potential divorce, parties can include provisions for the support of a spouse and confirmation of last wills and testaments of spouses in premarital or post-marital agreements.
How do you Enforce a Marital Agreement?
The enforcement of marital agreements can be one of the more complicated components of family law litigation. It’s not that the agreements themselves are necessarily complex, but more a matter of proving that the agreement has been respected in the daily activities of the spouses.
For an agreement between spouses to be enforceable, it must be in writing and signed by both parties. On the contrary, if one spouse wants to to avoid the enforcement of the agreement, that spouse must show one of two things:
- They did not sign it voluntarily and acted under duress, OR
- When they signed the agreement, it was unconscionable
If one party tries to show that it was unconscionable, they must also show that they were not provided a reasonable disclosure of the property and debts of the other party. Additionally, they must prove that they didn’t voluntarily and expressly waive, in writing, that disclosure, and neither knew nor could have reasonably known about the property or debts of the other party.
What is Considered “Unconscionable”?
The issue of unconscionability is one to be decided by the court as a matter of law. The judge will decide whether the marital agreement was unconscionable, but he or she must make that decision with the guidance of the prevailing case law and the facts of the particular case. A judge will examine the totality of the circumstances coupled with the verbiage of the agreement. It’s vital to keep in mind that the more complicated the agreement is, the easier it is to misconstrue or misinterpret the document.
The complexity of the document becomes exponentially greater and the enforcement of the agreement becomes increasingly more difficult.
Words of Caution for Marital Agreements
Another critical aspect of marital agreements is how the separate estates of the parties are managed after the wedding. An agreement can be well written and unambiguous, but if one or both spouses commingle the community property with their separate property, it can destroy the original intent of the marital agreement by mixing the marital estates. If there is ambiguity in the character of the estate (whether it is separate or community), the tie always goes to the community. In other words, if the parties do not respect the separate property nature of their estates and live their lives accordingly, the marital agreement will become null and void.
Now that you understand the intricacies of a marital property agreement you can also recognize the necessity of such a document for some married couples. Often, prospective spouses have substantial assets, children from other marriages, partnership or business agreements, or other reasons why they believe it is imperative, before marriage, to enter into a marital property agreement defining the respective rights and obligations of each party. In most circumstances, these agreements help preserve and protect the parties’ estates, reduce future litigation expenses, and can be beneficial for both parties.
All marital property agreements, whether pre or post marriage, have significant legal impact and should be reviewed by an experienced attorney. Martial property agreements require complete disclosure of information and have rigid statutory requirements to ensure that the parties fully understand the legal effect of signing the agreement.
I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”
As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, landlord-tenant disputes, immigration, and wills & estate planning. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!
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