Dissolving the Community Estate During Marriage: Creating Only Separate Property

The Texas Constitution and the Texas Family Code both provide that spouses may, at any time, agree to dissolve the community/marital estate so that each spouse possesses only his or her separate property.  This is done through a Partition and Exchange Agreement.

The Partition and Exchange Agreement can, among other things, accomplish the following:

  • Identify now existing or after-acquired property as a spouse’s separate property;
  • Transfer the separate property of one spouse to become the separate property of the other spouse; and,
  • Provide that each spouse’s future income from his or her separate property remains that spouse’s separate property (i.e. the normal rule is that income from separate property is community property; this provision alters that rule).

A Partition and Exchange Agreement contains requirements and features as follows:

  • It must be in writing;
  • It must be signed by the parties voluntarily after fair and reasonable disclosure of each spouse’s assets and debts (or waiver of any such disclosure);
  • It is enforceable without “consideration” (i.e. consideration is a term from contract law that means a party to a contract must give something of value to the other party that induces that party to enter into the contract; the consideration given may be money, property, or a promise of performance, for example);
  • It cannot be used as a vehicle to defraud creditors; any such provision in a Partition and Exchange Agreement that attempts to defraud a creditor is void;
  • It does not require the Court’s approval to be valid and enforceable.

The reasons why spouses might consider entering into a Partition and Exchange Agreement are many and varied.  In my next blog, we’ll look at one particular scenario that applies to a military family thinking about divorce

Speak with a qualified family law attorney to learn more about your unique circumstances may or may not benefit from a Partition and Exchange Agreement.

Author Jim Cramp is a retired active duty colonel and founder and principal attorney at the Cramp Law Firm, PLLC, serving clients in throughout the greater San Antonio region, across the United States, and globally.  The firm’s main areas of practice include Family Law, Military Divorce, Federal Civil Service Divorce, Wills and Estates, and Probate.