Texas is a Community Property state, which recognizes property acquired during a marriage as belonging to both spouses. Most people think this means each spouse owns everything 50/50, but actually together they own the whole until a court divides it. All property of either spouse is considered Community Property by a court unless you can prove an exception. Was the property a gift? Inheritance? Something acquired before marriage? Was it bought with funds earned before marriage or from the sale of a gift/inheritance/or prior-owned property? If the property falls into any of these categories, it can be considered the Separate Property of that spouse and cannot be awarded to the other spouse.

Community Property assumptions apply whether the marriage is formalized or common-law, and whether the spouses are opposite sex or same sex. However, a person and their spouse can agree to divide up their property differently at any time, and it does not have to be an equal distribution.

There are several types of agreements that may be made by married spouses or even couples living together. The three most common types of agreements are:

• Cohabitation Agreement
• Prenuptial Agreement
• Postnuptial Agreement

Cohabitation Agreement

A Cohabitation Agreement is an agreement made by individuals who live together, are not married, and who want to make it clear that they do not intend to be considered married. These agreements were first used to avoid any claims of common-law marriage by a live-in girlfriend or boyfriend. Now, they go beyond this simple use and may address issues like the division of property purchased together, who is responsible for paying what bills, household chores and responsibilities towards any children.

Prenuptial or Premarital Agreement

A Prenuptial Agreement, frequently called a “prenup” is an agreement between people planning to be married to each other but who want to make clear how any property they have before or during the marriage will be before treated—before any Community Property presumption has been created.

These agreements frequently address other issues including who owns what, who is responsible for what bills, ongoing financial payments to each spouse, punishment clauses for infidelity, or the division of property upon death or divorce. They can also add non-financial issues like children from prior relationships or medical-decision-making powers.

Postnuptial or Postmarital Agreement

A Postnuptial Agreement, usually called a “postnup,” is an agreement made after marriage by the spouses. These agreements can change prenuptial agreements, divide Community Property, turn Separate Property into Community Property, and tackle many other concerns.

Each of these agreements require full disclosure to each of other of all income and property. Each of the parties should have separate legal representation to protect their interests and ensure the agreement is fair to both.

If you are interested in further information about these or other property agreement, please call Calli Baldwin at (832) 449-6474.