There is never a good time to discuss a divorce with your spouse or an attorney. Your life is constantly changing and evolving, and you will never have all the time, energy, and resources that you may want 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 anticipating something terrible will happen to you and your spouse.
Commingling separate 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 your marriage. A postmarital agreement may be just what you need in that case. You can put your property into various sorts of trusts to continue to have them qualify as separate rather than community property.
How enforceable are postmarital agreements?
So long as a judge finds that you and your spouse gave up something to gain something, your postmarital agreements should be held up as enforceable. Once you have married your spouse, there are likely issues that need to be negotiated upon. You can draw from your experience of being married to present the issues that need to be settled. Also- in many premarital agreements, contingency plans need to be put into place regarding children's birth or the purchase of a marital home. The odds are better than 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 a divorce
If you are pondering whether to file for divorce from your spouse, you should contact a family law attorney immediately. It would help if you did not attempt to move money or other assets around 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 look at it to ensure that it does not need to be changed. If you pass away before your divorce and have a will 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 on attorney's fees.
How to characterize property?
The key to understanding how to characterize property properly is to ensure that you collect documents, receipts, or bills of sale that evidence the date, location, and circumstances of purchasing that property. Suppose you need to show that the downpayment on a home or business asset was made from an account that is rightfully your separate property. In that case, you should go back into your documents, contact lenders and do whatever sort of research you need to collect evidence to show a judge that the property is your separate property.
Problems with leaving property outright to children
A major problem 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 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 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 an account bearing both your child and their spouse's name, or as we just discussed, blended with the 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 not to 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 claim that the property could be subject to division upon divorce.
If 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 challenging 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 is on this loan.
If you and your spouse have a home equity line of credit (HELOC) on your home, then it is possible that they 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 regarding property issues
Once your divorce is final, and all parties have signed the divorce decree and the judge, you will need to review your estate plan carefully/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 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. Suppose you do not take steps to protect yourself and your spouse before or during your marriage. In that case, 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 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 are 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 six days a week at our office. 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.