How spouses can change the characteristic of community property and/or separate property
These agreements are typically referred to as “marital property agreements.”
The Texas Family Code governs three types of marital property agreements:
- premarital agreements
- partition or exchange agreements
- agreements to convert separate property to community property
Texas Family Code Section 4.102
Texas Family Code Section 4.102 allows for spouses to partition or exchange between themselves all or part of their community property. Community property is defined as property, other than separate property, obtained by either spouse during the marriage. See Texas Family Code Sec. 3.002
Spouses may at any time chose to enter into an agreement to transfer his or her interest in community property by a partition agreement. This decision results in a particular piece of property or property interest becoming the other spouses separate property.
Texas Family Code Section 4.006
Texas Family Code Section 4.006 governs the enforceability of these agreements. A partition agreement under Section 4.102 must be in writing and signed by both parties. Also if a dispute arises regarding the legitimacy of this agreement, know that the spouse attempting to set aside the premarital agreement must prove that the agreement is unenforceable.
Section 4.006 provides that the party must prove the following:
- the party did not sign the agreement voluntarily; or
- the agreement was unconscionable when it was signed and, before execution of the agreement, the party: was not provided a fair and reasonable disclosure of the property or financial obligation of the other party.
Spouses may also convert separate property to community property. A spouse’s separate property includes property owned or claimed by the spouse prior to marriage; property obtained by a spouse during the marriage by gift, devise, or descent; and proceeds recovered for personal injuries sustained by the spouse during the marriage. See Tex. Fam. Code Sec. 3.001. Texas Family Code Section 4.205 governs the enforceability of spouses to convert separate property to community property. An agreement to convert separate property to community property must be voluntarily executed and the party converting his/her separate property must have fair and reasonable disclosure of the legal effect of converting his/her property to community property. See
Tex. Fam. Code Sec. 4.205.
Section 4.205 also provides for written agreements to contain a statement which should be exhibited in bold-faced type, capital letters, or underlined that provide disclosure language of a party’s knowledge of the effect of converting property to community property. A party resisting the agreement must prove unenforceability, however unlike Section 4.006, Section 4.205 includes no provisions regarding unconscionability as a defense to enforceability.