There is never a good time to discuss a divorce either with your spouse or with an attorney. Your life is constantly changing and evolving and you will never have all the time, energy and resources that you may want in order to make your divorce as successful as it possibly could be. Communicating with another person about the weak points of your marriage can be painful. Whether you are comfortable making statements and assertions about your life and your marriage speaks as well to your strength of peace of mind.
If you and your spouse are not currently considering a divorce but are merely trying to plan for that life event should it happen, then a marital agreement is probably what you need to consider. There is a fine line between planning for the future and the anticipation that something bad will happen to you and your spouse.
Commingling seperate property while married
Both you and your spouse own separate property from before the time you were and during the marriage under circumstances where you came to own property during the course of your marriage. A postmarital agreement may be just what you need in that case. There are various sorts of trusts that you can put your property into in order to continue to have them qualify as separate rather than community property.
How enforceable are postmaital agreements?
So long as a judge finds that you and your spouse gave up something in order to gain something your postmarital agreements should be held up as enforceable. Once you have actually married your spouse it is likely that any issues that need to be negotiated upon. You are able to draw from your experience of being married in order to present the issues that need to be settled. Also- in many premarital agreements contingency plans need to be put into place regarding the birth of children or the purchase of a marital home. The odds are better that at the time of wanting to draft a postmarital agreement that many of these events have already come to be.
From an attorney’s perspective: Advising a client going through divorce
If you are pondering whether to file for divorce from your spouse then you should contact a family law attorney immediately. You should not attempt to move money or other assets around in order to shield them from your spouse because this could give the judge a negative first impression of you. If you have a will your attorney should ask you to take a look at it to make sure that it does not need to be changed. If you pass away before your divorce and have a will that goes against your premarital agreement you could be looking at a drawn out court case in probate court. Not only will the court case take a long time to resolve but your estate and your spouse could each need to spend a lot of money in attorney’s fees.
How to characterize property?
The key to understanding how to properly characterize property is to make sure that you collect documents, receipts or bills of sale that evidence the date, location and circumstances of the purchase of that property. If you need to show that the downpayment on a home or business asset was made from an account that is rightfully your separate property you should go back into your documents, contact lenders and do whatever sort of research that you need to in order to collect evidence to show a judge that the property is your separate property.
Problems with leaving property outright to children
A major problem involved with leaving property outright to children is that separate property is often commingled with community property. If you were to leave your child $50,000 and the money was taken and invested into a retirement account that your child earned during the course of her marriage, that account now has commingled funds and may need to be divided up upon her divorce, should that occur.
Because there is a presumption in Texas that all property acquired during the course of your marriage is in fact community property, it can get tricky (and expensive) to have to prove that the account does not need to be divided up during a divorce. Instead of doing this, you can transfer property to your child via a discretionary lifetime trust. The property would remain in the trust rather than be potentially renamed into a account bearing both your child and their spouse’s name, or as we just discussed, simply commingled with community income of your child and their spouse.
As long as your child (as the beneficiary) has no property right in the principal of the trust then it should not be considered community property. A smart move is to not give your child the ability as the beneficiary to withdraw assets from the trust. If not, your child’s spouse would not be able to make the claim that the property could be subject to division upon divorce.
In the event that you have a spouse who is seeking revenge
Divorce horror stories are full of instances where a power crazy (or just plain crazy) spouse. Your divorce attorney can guide you through this difficult process to dig down to confirm actual ownership of any property subject to division in your divorce along with any liens that are attached to that property. Your attorney should not take your spouse at their word on either of these subjects. Make sure that you and your attorney dig deep and find out what exactly on this loan.
If you and your spouse have a home equity line of credit (HELOC) on your home then it is possible that he or she could borrow money right under your nose without your knowledge or permission. If you have asked your spouse to close the line of credit you will need to verify that this has been done. Contact the creditor directly and ask for verification in writing that this has been done.
Wrapping up the issue of financial planning in regard to property issues
Once your divorce is final and the divorce decree has been signed by all parties and the judge, you will need to carefully review your estate plan/will in order to determine what needs to be changed based on your divorce. Your divorce decree may contain provisions that conflict directly with your will. A consequence of not doing so could be a court battle related to the will if this issue is not taken care of while you are alive.
A family law attorney can advise you on all of these issues that we’ve discussed today. The benefit of having an attorney on your side is that we have seen how these issues affect a wide array of people, making us well equipped to provide you with a window into the possible outcomes that could occur in your life.
Texas is a community property state which means that if you do not take steps to protect yourself and your spouse before or during your marriage it could mean that a divorce battle ensues that costs everyone involved time, money and resources that could be better allocated elsewhere. Getting yourself organized and collecting documents that are related to ownership in real property can give you a huge leg up when it comes to preparing your case.
Questions about real property, premarital agreements and postmarital agreements? Contact the Law Office of Bryan Fagan, PLLC today
If you engaged to be married or are already married and you have questions about the efficacy of a premarital or postmarital agreement please do not hesitate to contact the Law Office of Bryan Fagan, PLLC today. Our licensed family law attorneys offer free of charge consultations at our office six days a week. We will work to answer your questions in a pressure free environment. Our attorneys represent clients across southeast Texas and would be honored to do the same for you and yours.
Thank you for your time and interest in reading this blog post and please stay tuned tomorrow for more on family law in Texas.