Partition or Exchange Agreements

Entering into Partition or Exchange Agreements

Parties may opt for partition or exchange agreements for various reasons, such as in cases where they choose to separate instead of filing for divorce, or when they gain significant assets during their marriage and one party wants to safeguard them in case of a future split.

In Texas, married couples have the option to enter into partition or exchange agreements. These agreements enable one spouse to transfer some or all of their existing or future community property to the other spouse, making it the separate property of the recipient. Such agreements can also specify that any income or earnings derived from the transferred property belong solely to the receiving spouse. However, these agreements cannot be used to transfer community property to third parties. It is mandatory for these agreements to be in writing and signed by both parties to be legally binding. They do not require court approval or consideration.

Enforcing Partition or Exchange Agreements

In general, courts will uphold petition or exchange agreements unless they are found to be invalid or unfair and lack of disclosure occurred prior to signing. The courts decide whether an agreement is unconscionable as a matter of law, and may declare an agreement invalid if it was not signed or written down properly or includes terms that violate Texas law.

A partition or exchange agreement can be invalidated if it is deemed unfair and one party did not receive disclosure about the property or financial obligations of the other party, unless they waived that right or had adequate knowledge. Additionally, if one party was coerced or deceived into signing the agreement, it may be unenforceable.

In cases where the enforceability of a partition or exchange agreement is disputed, the burden of proof depends on when the agreement was created. For agreements made before 1987, the party trying to enforce the agreement must provide clear and convincing evidence that it was entered into willingly and without coercion, fraud, or overreaching. For agreements made in 1987 or later, the burden of proof is on the party seeking to avoid enforcement of the agreement.

Speak with an Experienced Divorce Attorney

Texas couples who accumulate substantial assets during their marriage may find it beneficial to create partition or exchange agreements to protect their interests in the event of a separation or divorce. The attorneys at Wilson Whitaker Rynell can assist you with family law matters and guide you through the process with their expertise and experience. Our firm represents clients in divorce cases in various Texas cities, including Dallas, Austin, Houston, Fort Worth, and all cities within Dallas County, Tarrant County, Collin County, and Denton County.