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Houston Divorce & Family Law Attorney Richard J. Tholstrup

The Tholstrup Law Firm, L.P.

440 Louisiana, Suite 800
Houston, Texas 77002
    2002 Timberloch, Suite 200
The Woodlands, Texas 77380
Phone: 713.225.1280 Fax: 713.225.1344
E-Mail:  tholstru@sbcglobal.net
Home Page:  www.tholstruplaw.com

Family Law Attorney Richard J. Tholstrup

POST MARITAL AGREEMENTS

For more detail on the following, simply click on the issue

1. Relevant Texas Family Code Sections & Leading Case Law
2. What is a Marital Property Partition?
3. When can a spouse execute a Marital Property Partition?
4. What is necessary for a valid Marital Property Partition?
5. What type of information must a spouse disclose to the other in a Marital Property Partition?
6. Is an attorney necessary for a Marital Property Partition?
7. When is a Marital Property Partition not enforceable?
8. What are the rights of creditors when a Marital Property Partition is executed?

1. Relevant Texas Family Code Sections & Leading Case Law

PARTITION & EXCHANGE AGREEMENT

4.101 "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.

4.102. PARTITION OR EXCHANGE OF COMMUNITY PROPERTY. 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.

4.103. AGREEMENT BETWEEN SPOUSES CONCERNING INCOME OR PROPERTY FROM SEPARATE PROPERTY. 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.

4.104. FORMALITIES. A partition or exchange agreement under Section 4.102 or an agreement under Section 4.103 must be in writing and signed by both parties. Either agreement is enforceable without consideration.

4.105. ENFORCEMENT. (a) A partition or exchange agreement is not enforceable if the party against whom enforcement is requested proves that:
(1) the party did not sign the agreement voluntarily; or
(2) the agreement was unconscionable when it was signed and, before execution of the agreement, that party:
(A) was not provided a fair and reasonable disclosure of the property or 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.
(b) An issue of unconscionability of a partition or exchange agreement shall be decided by the court as a matter of law.
(c) The remedies and defenses in this section are the exclusive remedies or defenses, including common law remedies or defenses.

4.106. RIGHTS OF CREDITORS AND RECORDATION UNDER PARTITION OR EXCHANGE AGREEMENT. (a) A provision of a partition or exchange agreement made under this subchapter is void with respect to the rights of a preexisting creditor whose rights are intended to be defrauded by it.

(b) A partition or exchange agreement made under this subchapter may be recorded in the deed records of the county in which a party resides and in the county in which the real property affected is located. An agreement made under this subchapter is constructive notice to a good faith purchaser for value or a creditor without actual notice only if the instrument is acknowledged and recorded in the county in which the real property is located.

AGREEMENT TO CONVERT SEPARATE PROPERTY TO COMMUNITY PROPERTY

4.201. DEFINITION. In this subchapter, "property" has the meaning assigned by Section 4.101.

4.202. AGREEMENT TO CONVERT TO COMMUNITY PROPERTY. At any time, spouses may agree that all or part of the separate property owned by either or both spouses is converted to community property.

4.203. FORMALITIES OF AGREEMENT. (a) An agreement to convert separate property to community property:
(1) must be in writing and:
(A) be signed by the spouses;
(B) identify the property being converted; and
(C) specify that the property is being converted to the spouses' community property; and
(2) is enforceable without consideration.
(b) The mere transfer of a spouse's separate property to the name of the other spouse or to the name of both spouses is not sufficient to convert the property to community property under this subchapter.

4.204. MANAGEMENT OF CONVERTED PROPERTY. Except as specified in the agreement to convert the property and as provided by Subchapter B, Chapter 3, and other law, property converted to community property under this subchapter is subject to:

(1) the sole management, control, and disposition of the spouse in whose name the property is held;
(2) the sole management, control, and disposition of the spouse who transferred the property if the property is not subject to evidence of ownership;
(3) the joint management, control, and disposition of the spouses if the property is held in the name of both spouses; or
(4) the joint management, control, and disposition of the spouses if the property is not subject to evidence of ownership and was owned by both spouses before the property was converted to community property.

4.205. ENFORCEMENT. (a) An agreement to convert property to community property under this subchapter is not enforceable if the spouse against whom enforcement is sought proves that the spouse did not:
(1) execute the agreement voluntarily; or
(2) receive a fair and reasonable disclosure of the legal effect of converting the property to community property.
(b) An agreement that contains the following statement, or substantially similar words, prominently displayed in bold-faced type, capital letters, or underlined, is rebuttably presumed to provide a fair and reasonable disclosure of the legal effect of converting property to community property:
"THIS INSTRUMENT CHANGES SEPARATE PROPERTY TO COMMUNITY PROPERTY. THIS MAY HAVE ADVERSE CONSEQUENCES DURING MARRIAGE AND ON TERMINATION OF THE MARRIAGE BY DEATH OR DIVORCE. FOR EXAMPLE:
"EXPOSURE TO CREDITORS. IF YOU SIGN THIS AGREEMENT, ALL OR PART OF THE SEPARATE PROPERTY BEING CONVERTED TO COMMUNITY PROPERTY MAY BECOME SUBJECT TO THE LIABILITIES OF YOUR SPOUSE. IF YOU DO NOT SIGN THIS AGREEMENT, YOUR SEPARATE PROPERTY IS GENERALLY NOT SUBJECT TO THE LIABILITIES OF YOUR SPOUSE UNLESS YOU ARE PERSONALLY LIABLE UNDER ANOTHER RULE OF LAW.
"LOSS OF MANAGEMENT RIGHTS. IF YOU SIGN THIS AGREEMENT, ALL OR PART OF THE SEPARATE PROPERTY BEING CONVERTED TO COMMUNITY PROPERTY MAY BECOME SUBJECT TO EITHER THE JOINT MANAGEMENT, CONTROL, AND DISPOSITION OF YOU AND YOUR SPOUSE OR THE SOLE MANAGEMENT, CONTROL, AND DISPOSITION OF YOUR SPOUSE ALONE. IN THAT EVENT, YOU WILL LOSE YOUR MANAGEMENT RIGHTS OVER THE PROPERTY. IF YOU DO NOT SIGN THIS AGREEMENT, YOU WILL GENERALLY RETAIN THOSE RIGHTS."
"LOSS OF PROPERTY OWNERSHIP. IF YOU SIGN THIS AGREEMENT AND YOUR MARRIAGE IS SUBSEQUENTLY TERMINATED BY THE DEATH OF EITHER SPOUSE OR BY DIVORCE, ALL OR PART OF THE SEPARATE PROPERTY BEING CONVERTED TO COMMUNITY PROPERTY MAY BECOME THE SOLE PROPERTY OF YOUR SPOUSE OR YOUR SPOUSE'S HEIRS. IF YOU DO NOT SIGN THIS AGREEMENT, YOU GENERALLY CANNOT BE DEPRIVED OF OWNERSHIP OF YOUR SEPARATE PROPERTY ON TERMINATION OF YOUR MARRIAGE, WHETHER BY DEATH OR DIVORCE."
(c) If a proceeding regarding enforcement of an agreement under this subchapter occurs after the death of the spouse against whom enforcement is sought, the proof required by Subsection (a) may be made by an heir of the spouse or the personal representative of the estate of that spouse.

4.206. RIGHTS OF CREDITORS; RECORDING. (a) A conversion of separate property to community property does not affect the rights of a preexisting creditor of the spouse whose separate property is being converted.
(b) A conversion of separate property to community property may be recorded in the deed records of the county in which a spouse resides and of the county in which any real property is located.
(c) A conversion of real property from separate property to community property is constructive notice to a good faith purchaser for value or a creditor without actual notice only if the agreement to convert the property is acknowledged and recorded in the deed records of the county in which the real property is located.

2. What is a Marital Property Partition?

A marital property partition is an agreement between spouses that allows them to change community property into the separate property of one spouse.

3. When can a spouse execute a Marital Property Partition?

A marital property partition may be executed at any time during the marriage.

4. What is necessary for a valid Marital Property Partition?

A marital property partition must be in writing and signed by both parties.

5. What type of information must a spouse disclose to the other in a Marital Property Partition?

A spouse must disclose any property or financial obligations of that spouse unless the other spouse voluntarily and expressly waives, in writing, any right to the disclosure.

6. Is an attorney necessary for a Marital Property Partition?

An attorney is not required to execute a marital property partition but is strongly encouraged.

7. When is a Marital Property Partition not enforceable?

(a) A partition or exchange agreement is not enforceable if the party against whom enforcement is requested proves that:

(1) the party did not sign the agreement voluntarily; or
(2) the agreement was unconscionable when it was signed and, before execution of the agreement, that party:

(A) was not provided a fair and reasonable disclosure of the property or 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.

8. What are the rights of creditors when a Marital Property Partition is executed?

Creditors of one spouse will not be able to seize the separate property of the other spouse unless the partition was executed with the intent to defraud the creditors.