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Handling real estate in a Texas divorce

With divorce rates increasing over the past generation, marital property issues are becoming more and more relevant. Real estate holdings are central to any planning associated with divorce, whether it means drafting premarital agreements or dividing property in a divorce.

Planning for divorce before you are even married

It may seem counterintuitive to plan for a divorce before you even get married. Still, I would venture to tell you that based on my years of experience in representing clients in family law cases, it may be advisable to do so in some instances. Planning for an event like a divorce can relieve stress and provide peace of mind for folks who own real estate.

In the early phases of your relationship, you and your partner are likely more agreeable with one another on issues even before the marriage. You are willing to reach a compromise on them as a result. With that said, if you and your partner are reasonable negotiating partners, then you can avoid strife in your marriage by dividing up the property before saying "I do." The longer your marriage lasts, the more likely you are to find yourself developing feelings about the property, your spouse, and marriage in general that make negotiation in this area more difficult.

The most challenging part of beginning a discussion about planning for your divorce is allowing the subject of premarital agreements to be brought up in the first palace. Looking at it as an assumption that a divorce will occur is not the most productive mindset. Instead, choose to view the agreement as a means to avoid ill-will and engender good faith between you and your spouse.

Premarital agreements as they relate to real estate

The sort of couples that stand to benefit from considering a premarital agreement is varied. Spouses will have differing levels of income, or ones where a spouse owns a significant amount of property before the divorce stand to benefit the most from my experience. Couples who negotiate and have a premarital agreement often communicate better during marriage and fight less about money issues.

Determining how a piece of property is characterized as community or separate property is the main benefit of having a premarital agreement. The state of Texas is a community property state, which means that all property owned after your marriage (by death or divorce) is considered to be community property and thus subject to being divided between you and your spouse. As such, it can help decide with your spouse-to-be whether a particular piece of property will be considered separate property before your marriage even begins.

Separate property is usually property you acquired before your marriage and property you received during your marriage by gift or as part of an inheritance.

How a premarital agreement is deemed to be enforceable

First and foremost, a spouse who attempts to void the signing of a premarital agreement must prove that the contract was signed due to misrepresentation or the failure to disclose a material fact. Second, the agreement must be unconscionable when the agreement is signed. Third, if you or your spouse have seen changes in your life that render the agreement unconscionable, then it will not be held to be enforceable.

Suppose you have hired an attorney to represent you while signing a premarital agreement (which we recommend). In that case, it is difficult for a court to determine that a contract that you sign is either unconscionable or was signed under duress, in those types of situations, making an argument that you did not read the agreement or that you misunderstood a portion of it are not defenses against the enforceability of a premarital agreement.

Premarital agreements from the perspective of an attorney

Allow me to shift gears and approach premarital agreements from an attorney's perspective. You and your potential spouse should not utilize the exact attorney to draft your premarital agreement. You will want an attorney to be looking out for your interests at that very moment and should not consider your spouse-to-be and their likely future needs. Hiring the exact attorney opens the door to having the enforceability of your agreement questioned down the road.

Premarital agreements are tricky because you ask attorneys and their clients to envision the possible path for a marital relationship. Anyone who has been married can tell you that this is not always possible. People have kids after years of telling one another that they will never have kids. People take jobs they never thought they would take and inherit sums of money and real estate entirely out of the blue.

As a result, because of the change in circumstances, it is relatively easy to make at least an argument that a premarital agreement is not enforceable because your circumstances have changed dramatically during a marriage. While you nor your attorney can anticipate every single possible outcome and the future event in your wedding, there are ways to protect your premarital agreement from being attacked based on its validity.

Drafting an enforceable premarital agreement

Rather than considering an endless supply of possible future events, you and your spouse should have an agreement drafted that is modified based on the occurrence of future events. This allows your document to be enforceable yet flexible at the same time.

Often, one spouse-to-be may be concerned that their entering into a premarital agreement may not be a smart move because their spouse has a job whose income and advancement potential are significant. That potential may not be realized at the time of the signing of the agreement, but it looks to be on the horizon.

Let's consider a hypothetical example. Suppose that you, a doctor with a child from a prior marriage, decide to marry someone who earns far less money than you do. Your spouse may be concerned that if he decides to quit his job to raise your children, he has given up on his career to help maintain your home and children. As a result, it may make sense to declare that the division of property in the premarital agreement is no longer in place and that a decision in the future should be left to a judge or the mutual understanding of you and your spouse at the time of divorce.

The key to a premarital agreement is to understand the premarital agreement.

As I noted early, your understanding of the issues contained in the premarital agreement is essential to its being declared enforceable. Part of this is making sure that you disclose the total amount of information regarding your and your fiancé's financial picture. The more information you make available and the more detailed your agreement is, the less likely it can be overturned by a judge in the future.

You and your spouse should consider whether to make a statement of your net worths at the time of the signing of the agreement and attachment to the premarital agreement as more information is made available to each of you, the more likely that it will require further negotiation and changes to the premarital agreement. As a result, you and your fiancé will feel better about what you are signing and even better about the decision to negotiate in the first place.

More on premarital agreements, real property, and divorce in tomorrow's blog post

We will continue to discuss property division in premarital agreements in tomorrow's blog post from the attorneys with the Law Office of Bryan Fagan, PLLC.

If you are considering divorce, need an attorney to help you negotiate a fair premarital agreement, or have general questions about an area of family law, please consider contacting the Law Office of Bryan Fagan, PLLC. We can help you address those questions head-on and help you to map out a plan to achieve whatever goals you have for yourself and your family. A free-of-charge consultation with one of our licensed family law attorneys is only a phone call away.

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