Protect Your Assets With Marital Agreements
At CokerLegal, we do a lot of premarital agreements, or "prenups" as they are often called, as well as the post-marriage equivalent, marital property agreements. We almost always recommend them to clients, especially clients going into a second or third marriage or getting married later in life. However, the simple fact is that the vast majority of our divorce clients do not have these types of agreements.
While Texas Law provides for how to divide the community estates of married couples when no property agreements exist, one of the most common problems we encounter is proving what the Separate Property estate of one or both parties consists of at the time of divorce.
What is Separate Property?
In Texas, any property owned at the time of marriage, or received during marriage by gift or inheritance, is considered a party's Separate Property. As Separate Property, it is not divisible at the time of divorce and is set aside for the party to whom it belongs.
How is Separate Property Identified?
It is the sole burden of the party claiming that property on hand at the time of divorce is Separate Property to prove it. This is sometimes hard, especially when couples have been married for a long time and records from around the time the parties got married are long gone. Banks and other financial institutions often dispose of records as soon as allowable under law, which is most often seven years from the date they are created. Accordingly, if a party in a divorce wants to prove how much he or she had in the bank when the parties married 15 years earlier, it can be difficult to impossible.
If the parties did a Premarital Agreement, each party's separate property is usually identified at the time of marriage. However, without such agreement, and without access to statements, parties often lose their right to have property confirmed as Separate Property. This can cost tens or hundreds of thousands of dollars and cause the property division to be very inequitable.
How Can You Protect Yourself Without a Marital Agreement?
While we encourage Premarital Agreements, if you are getting married and don't plan to enter into such an agreement, it's a good idea to print statements from all your existing accounts (i.e. bank, retirement, investment and so on) and put those statements in a safe place. Financial professionals encourage people to regularly print and save all their financial account statements as, often, statements for the entire time of marriage or necessary, or at least helpful, in determining what is separate and what is community.
Remember, if you do find yourself going through divorce, it's your burden to prove what is your separate property and, if you don't, your soon-to-be ex-spouse is likely going to get at least half of it.
Questions? CokerLegal is available to provide you with more specific guidance. To schedule an initial consultation, please contact us online or call (940) 293-2313.