- Estate Planning
- Elder Law
- Special Needs Trusts
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Texas is one of only nine Community Property states. Community Property is property that is owned simultaneously by both spouses in a marriage. During the marriage, each spouse doesn’t own half—together they own the whole. All property of either spouse is presumed to be Community Property, but that presumption can be overcome by showing how the property was acquired by either spouse. (Was it a gift? Inheritance? Something acquired before marriage? Was it purchased with funds earned before marriage?)
The rules of property characterization apply whether the marriage is formal or informal (common-law), and whether the spouses are opposite sex or same sex. That said, the rules are not set in stone. A person and his or her spouse can agree to divide up the world at any time, and it does not have to be an equal distribution.
There are several types of agreements that may be made by those who share a residence or who are in a relationship together. Three common types of agreements are:
A Cohabitation Agreement is an agreement made by individuals who live together, who are not married, and who want to make it clear that at this time, they do not intend to be considered married to each other. These agreements originated to avoid any common-law marriage concerns and may address issues such as the characterization of property going forward, who is responsible for paying what bills, and liabilities for the other party’s children.
A Prenuptial Agreement is an agreement made by individuals who intend to be married to each other but wish to clarify the characterization of property before any Community Property has been created. These agreements can address any number of concerns including who owns what, what are the financial responsibilities of each spouse, what circumstances would create Community Property, and the division of property upon death or divorce. They also often provide provisions about non-financial issues such as Guardianship of children from prior relationships or medical-decision-making powers.
A Postnuptial Agreement is an agreement made after marriage by the spouses. These agreements can ratify or change pre-nuptial agreements, divide Community Property, convert separate property to Community Property, allow one spouse to set up a Trust for the benefit of the other, and tackle many other concerns.
These agreements all require transparency and full disclosure by both parties. It is generally best if each of the parties have separate legal representation and counsel to adequately represent their interests. To determine which of these agreement would best suit your situation, contact us. Our Attorneys will discuss not only which agreement would be most appropriate to your relationship, but also how such an agreement can be coordinated with your overall estate plan.