Although the Texas Family Code provides great detail as to how property is to be handled during marriage and divorce, not everyone likes the way Texas handles marital property. Sometimes couples get married and settle down in Texas simply because they like the weather, but they may not like the idea of “community property” or some other standard aspect of Texas family law. Thus, in the same way that people may make end-of-life plans with a will rather than leaving the distribution up to the default intestacy scheme of the Estates Code, married people or soon-to-be married people may sign premarital, partition-and-exchange, or conversion agreements to preplan for a property division (or other issues that could arise) in the event of a divorce. Whether its simply proactive life-planning or an agreement in the wake of a marital dispute and reconciliation, the enforceability of these agreements, when one exists, is a preliminary issue that should be addressed before focusing on any other issues of a divorce and property division.
Parties can agree to almost anything within reason, but whether the parties’ agreement controls should be addressed first to limit the scope of mediation or the final trial in a divorce proceeding. If the parties disagree about the agreement’s enforceability, a summary judgment proceeding or preliminary evidentiary hearing, depending on the specific facts of the case, can help clarify the situation and potentially save both money, time, and stress.
Premarital, partition-and-exchange, and conversion agreements (collectively, “marital agreements”) can generally cover any matter, so long as they do not (1) violate public policy or a statute imposing criminal penalties; (2) adversely affect a child’s right to support; or (3) defraud a creditor. See Tex. Fam. Code §§ 4.003(a)(8), (b), 4.106, 4.206. The agreements can include provisions for child support, but if the agreement is not in the best interest of the child, the provision can be disregarded. See Radtke v. Radtke, 521 S.W.2d 749, 751 (Tex. App.—Houston [14th Dist.] 1975, no writ).
A premarital agreement must be signed before marriage. See Tex. Fam. Code § 4.002; Ahmed v. Ahmed, 261 S.W.3d 190, 194 (Tex. App.—Houston [14th Dist.] 1994, no writ). The agreement can be revoked during marriage by a written agreement signed by both parties. Tex. Fam. Code § 4.005. Partition-and-exchange and conversion agreements can be signed at any time during marriage to change the character of marital property. Tex. Const. art 16 § 15; Tex. Fam. Code §§ 4.102, 4.203.
Marital agreements must be in writing, be signed by the parties, and are enforceable without consideration. Tex. Fam. Code §§ 4.002, 4.104, 4.203. The parties must be afforded a full financial disclosure before signing. Tex. Fam. Code §§ 4.006(a)(2), 4.105(a)(2)(A), 4.205(a)(2). If the agreement affects the ownership of real property, it should be sworn or acknowledged, so it can be filed in the county records where the property is located. See Tex. Prop. Code §§ 11.001, 12.001(b).
A partition-and-exchange agreement (changing community property to separate) should clearly specify the parties’ intent, preferably using the words “partition” or “exchange.” Byrnes v. Byrnes, 19 S.W.3d 556, 559 (Tex. App.—Fort Worth 2000, no pet.). The agreement must have a present effect and not require future action. LaPree v. LaPree, No. 03-20-00465-CV, 2022 WL 548285, at *3 (Tex. App.—Austin 2022, no pet.) (mem. op.); see also Dokmanovic v. Schwarz, 880 S.W.2d 272, 275–76 (Tex. App.—Houston [14th Dist.] 1994, no writ). A partition and exchange agreement does not require court approval. Diggs v. Diggs, No. 14-11-00854-CV, 2013 WL 3580424 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (mem. op.). Likewise, a conversion agreement (changing separate property to community) should clearly state the intent of the agreement, preferably—but not necessarily—using the term “conversion.” See e.g., Alonso v. Alvarez, 409 S.W.3d 754, 758 (Tex. App.—San Antonio 2013, pet. denied).
Marital agreements are presumptively enforceable, and the contestant to the agreement bears the burden to prove the agreement is not enforceable. In re Eaton, No. 02-14-00239-CV, 2014 WL 47716008 (Tex. App.—Fort Worth 2024, orig. proceeding) (mem. op.); Osorno v. Osorno, 76 S.W.3d 509, 510 (Tex. App.—Houston [14th Dist.] 2002, no pet.); Marsh v. March, 949 S.W.2d 734, 739 (Tex. App.—Houston [14th Dist.] 1997, no writ); see Tex. Fam. Code §§ 4.006(a), 4.105(a), 4.205(b). To establish a premarital or partition-and-exchange agreement is unenforceable, the contestant must show that the agreement was (1) not signed voluntarily or (2) unconscionable when signed and the contestant (a) did not receive a full disclosure, (b) did not voluntarily waive disclosure, or (c) did not have or could not have acquired knowledge of the other party’s financial obligations and property. Tex. Fam. Code §§ 4.006, 4.105. To establish a conversion agreement is unenforceable, the contestant must show that the agreement was not signed voluntarily or that the contestant did not receive a full and fair disclosure of the legal effect of the agreement. Tex. Fam. Code § 4.205.
Voluntariness is not defined by the Family Code, and the issue of voluntariness is addressed through a case-by-case factual determination. See Moore v. Moore, 383 S.W.3d 190, 195 (Tex. App.—Dallas 2012, pet. denied). Thus, if voluntariness is at issue, the question of enforceability is likely not best addressed through summary judgment because there would necessarily be a genuine issue of material fact. However, a preliminary evidentiary hearing to address this question would help limit the scope of issues at mediation or final trial.
A party challenging a conversion agreement, unlike the other two types of marital agreements, is not limited to the statutory grounds and can rely on other common-law defenses to enforceability. Compare Tex. Fam. Code §§ 4.006, 40105 with § 4.205. However, notwithstanding the Family Code’s limitation on defenses for premarital and partition-and-exchange agreements, common-law precepts, including duress, lack of capacity, fraud, and undue influence could bear upon the ultimate determination of voluntariness. Sheshunoff v. Sheshunoff, 172 S.W.3d 686, 689 (Tex. App.—Austin 2005, pet. denied).
Further, although the premarital and partition-and-exchange statutes state that the question of unconscionability shall be determined as a matter of law, courts are also instructed to consider a number of factors about which there may be a factual dispute, such as the parties’ general backgrounds and particular needs; presence of deception, overreaching, and sharp business practices; economic circumstances of the parties; and the relative acumen, knowledge, education, and financial abilities of the parties. See Tex. Fam. Code § 4.006(b); Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 136 (Tex. App.—Waco 2005, pet. denied); In re Rangel, 45 S.W.3d 783, 786 (Tex. App.—Waco 2001, orig. proceeding); El Paso Nat. Gas Co. v. Minco Oil & Gas Co., 964 S.W.2d 54, 61 (Tex. App.—Amarillo 1997); Fanning v. Fanning, 828 S.W.2d 135, 146 (Tex. App.—Waco 1992, writ denied) When assessing the enforceability of a premarital agreement, the courts will look at the “entire atmosphere” surrounding the execution of the agreement. McDonald v. McDonald, No. 02-22-00446-CV, 2023 WL 3878990, at 3 (Tex. App.—Fort Worth 2023, no pet.) (mem. op.). If the parties have relatively equal backgrounds and bargaining power, even a quick handwritten agreement without attorney oversight can be found enforceable, even if the result might be considered “unfair” by one of the parties. See McDonald, 2023 WL 3878990, at 4 (awarding husband 100% of marital residence pursuant to premarital agreement drafted by him).
While Texas courts are particularly hesitant to find premarital agreements unenforceable, they have closely scrutinized property agreements made by spouses during marriage because of the fiduciary duty that exists between spouses (unlike soon-to-be spouses). See Johnson v. Peckham, 120 S.W.2d 786, 787–88 (1938); Miller v. Miller, 700 S.W.2d 941, 945–47 (Tex. App.—Dallas 1985, writ ref’d n.r.e.); Bohn v. Bohn, 455 S.W.2d 401, 405 (Tex. App.—Houston [1st Dist.] 1970, writ dism’d w.o.j.).
