Partition and Exchange Agreements (A Post-nuptial)
By Earl N Jackson
- Statistics demonstrate that mariages with premarital agreements tend
to last. The theory is that the parties worked through their
issues, or had their first "contest" prior to the marriage. For
whatever reason, marriages with prenups tend to last.
- Premarital agreements are usually sought by wealthy individuals who
desire to protect their accumulated property over a lifetime.
Okay, usually by wealthy men marring younger women. Happens all the
- If we are contacted by an individual or lawyer requesting that we
represent a "foreign national" who speaks about 4 words of English, do
not expect us to rubber stamp the prenuptial. First, we will employ the
services of an interpreter and thoughly explain to the foreign national
the impact of the prenup. Secondly, we will advise the national of
"rights and remidies" that could be included in the prenup to
protect him or her. Most of the time, after listening to the advice the
client choses to move forward with the agreement without regard to
certain remidies that could be included. Okay, lots of American
men are marring foreign women. The mail order bride business is as
active, if not more so, today as it was in centuries past.
- Premarital agreements can have buy out and termination clauses.
For example, if the marriage lasts 5 years but no longer then spouse
receives $5,000.00 upon divorce. If the marraige last 10 years but
no longer, then the spouse receives $20,000 upon divorce. If the
marriage last 20 years or longer, the premarital agreement terminates by
operation of its terms. These are a few terms that can be included
in a prenup.
- Prenuptial agreements cannot contract around the obligation to pay
- Very often, more common than one might expect, the prenup is torn up
by the protected spouse at some point in the marriage. They have
become confident that their spouse did not marry them n order to obtain
their money. Smart move or not, it happens all the time
- If the prenup is lost or missing, there is no prenup as far as the
law is concerned.
- The Jackson Law Firm premarital agreement is not the standard "Texas
Bar Association agreement." If you follow our advice, the agreement is
"bullet proof" This requires that both sides be "lawyered up" and
the filing of a declareatory judgment action
following the "honeymoon." It is a top of the line agreement that
has been "tested" over the years.
- We have engaged in divorce actions whre the
premarital agreement was essentially so poorly written that it was non
existent. Mr. Jackson litigated the prenup on behalf of the wife
and had a marvelous time.
- Don't call us unless you are serious about
protecting your assets. Our prenups are not $500.00 or $1,000 documents.
It is a very complex form that has withstood
the passage of time.
A premarital or prenuptial
agreement is a contract between parties contemplating marriage that prevents
the creation of community property. Community property is subject to the
"just and right" division of the court - there is no 50% rule in Texas.
Division can be a 60/40 or 80/20 split or some other percentage split. The
division of the marital estate is up to the discretion of the court.
However, the court has no power to divest a party of their separate
property. The parties can contract that the property owned by one of them or
by either of them will remain separate property and will include the income
derived from the separate property. This income would normally be considered
community income as well as anything purchased with it. A premarital or
prenuptial agreement can change all that. A post-nuptial or partition and
exchange agreement is, again, a contract between married parties The
important thing to remember is - a Texas court has no discretion to divest a
party of their separate property.
Generally, a prenuptial
agreement or premarital agreement can address any property issue that might
arise in the divorce context. The reasoning is, people should be free to
contract and control the disposition of their property as they choose.
However, a prenup cannot address child support.
Under the Uniform Premarital
Act (Texas Family Code Chapter 4) a premarital agreement must be in a
writing. It must be signed by both parties and it is enforceable without
consideration. It becomes effective on the date of marriage and may be
amended, in writing, at any time after the date of marriage.
A premarital agreement is not
enforceable if the party against whom enforcement is requested proves:
That the agreement was
not signed voluntarily.
The agreement was
unconscionable when it was signed.
Prior to signing the
agreement the party was not provided a fair and reasonable disclosure of
the property or financial obligations of the other party; did not
voluntarily and expressly waive, in writing, any right to disclosure of
the property or financial obligations of the other party; and did not
have our could not have had adequate knowledge of the property or
financial obligations of the other party.
The issue of
unconscionability of a premarital agreement is decided by the court as a
matter of law. Example, in Osorno v. Osorno, 73 S.W.2d 734, an
unwed mother got pregnant. Dad said he would marry her if she signed the
prenuptial agreement. She signed. The court stated that although presented
with a difficult choice, signing the agreement was not involuntary.
In Marsh v. Marsh,
949 S.W.2d 734 the court set out factors that the court would consider in
determining unconscionability. In general, for a prenup to be unconscionable
it must be so far one-sided that no reasonable person could consider it to
be an arm's length transaction. Factors to be considered are maturity of the
parties, prior marriages, respective ages and motivations to protect their
respective children. The fact that a prenup party was not
represented by counsel is not dispositive. You don't have to have two
lawyers but it does help.
Partition and Exchange
At any time after the date of
marriage, the spouses may partition and exchange their community property
then existing or to be acquired as the spouses may desire. The freedom to
contract. 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 be acquired
shall be the separate property of the owner. A postnuptial agreement does
not require judicial approval. The agreement must use the language of
partition and exchange.
A partition and exchange
agreement is not enforceable if the party against whom enforcement is
requested proves that it was not signed voluntarily and, like a prenuptial
agreement discussed above, the agreement was unconscionable when it was
signed. That is the party must have been giving a reasonable and fair
disclosure of the property or voluntarily waived in writing the right to
disclosure and could not have had adequate knowledge of the property or
financial obligations of the other party.
A partition and exchange
agreement is void with respect to the rights of a preexisting creditor.
Agreement to Convert Separate
Property to Community Property
At any time the spouses may
agree that all or part of their separate property owned by either or both
spouses is converted to community property. The agreement to convert
separate property to community property must be signed, must identify the
property to be converted and is enforceable without consideration