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Handling real estate in a Texas divorce

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

Planning for divorce before you are even married

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

In early phases of your relationship, even prior to the marriage, you and your partner are likely more agreeable with one another on issues and 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 property prior to saying “I do”. The longer your marriage lasts the more likely you are to find yourself developing feelings about property, your spouse and marriage in general that make negotiation in this area more difficult.

The toughest part of beginning a discussion about planning for your divorce is actually 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 to have. Rather, choosing to view the agreement as a means to avoid ill-will and engender good-faith between you and your spouse is advisable.

Premarital agreements as they relate to real estate

The sort of couples that stand to benefit from the consideration of a premarital agreement are varied. Spouses will differing levels of income or ones where a spouse owns a significant amount of property prior to the divorce stand to benefit the most from my experience. Couples that negotiate and have a premarital agreement signed into being often times communicate better during marriage and fight less about money issues.

Determining how a piece of property is characterized, either 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 at the conclusion of 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 be useful to deciding with your spouse-to-be whether a particular piece of property will be considered separate property before your marriage even begins.

Separate property is normally property that you acquired prior to your marriage and property that you acquired 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 agreement was signed as a result of misrepresentation or the failure to disclose a material fact. Second, the agreement must be unconscionable at the time the agreement was 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.

If you have hired an attorney to represent you in the course of signing a premarital agreement (which we recommend) it is difficult for a court to determine that an agreement that you sign is either unconscionable or was signed under duress. In those type of situations making an argument that you did not actually 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 the perspective of an attorney. You and your potential spouse should not utilize the same attorney to have your premarital agreement drafted. You will want an attorney to be looking out for your interests at that very moment, and should not be taking into consideration your spouse-to-be and their likely future needs. Hiring the same attorney opens the door to having the enforceability of your agreement questioned down the road.

Premarital agreements are tricky because you are asking 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 are never going to have kids. People take jobs that they never thought they would take and they inherit sums of money and/or real estate completely out of the blue.

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

Drafting an enforceable premarital agreement

Rather than taking into consideration 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.

A lot of times 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 is 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 decides to marry someone who earns far less money than you do. Your spouse to be may be concerned that if he decides to quit his job to raise your children that he has given up on his career in order 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 agreement of you and your spouse at the time of divorce.

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

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

You and your spouse should consider whether to make a statement of your individual net worth’s at the time of the signing of the agreement an 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 the division of property 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 just have general questions about an area of family law, please consider contacting the Law Office of Bryan Fagan, PLLC. We can help you to 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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