Cohabitation & Domestic Partnership Agreements in Texas for Boomer & Senior Couples
Premarital and post-marital agreements in Texas have a complex history immersed in the community property presumption, the state constitution, statutes and case law. Originally, such agreements were found to be unenforceable. But with amendments to the Texas Constitution, evolving statutes, recent case law, and improved draftsmanship, such agreements are now enforceable under contract law.
For many Boomer and Senior couples, living together is a precursor to marriage; for others because of family issues or commitments, there is no intent to ever marry. The simple fact is, domestic partnership agreements address a wide variety of circumstances, many involving established adults who want to be together but because of prior financial and family commitments prefer to have an applicable contractual agreement for their legal needs.
Many couples choose to live together so they do not lose certain benefits under current rules of social security, military and insurance disability programs, or to stop those benefits from being taken away from their children. In other cases, couples who are divorced, and who may have children, may want to protect certain assets. In situations such as trust funds or inherited funds, beneficiaries simply do not want to place family money at risk. Other couples choose to shelter their own resources from the real or perceived obligations of their partner.
The marital agreement is considered to be a contract under Texas law. The premarital agreement must be in writing and signed by both parties. No actual consideration is required; however, to conform to contractual law, it may be wise to provide benefits for the non-monied party to avoid a later finding of unconscionably, particularly if the financial or physical condition of the non-monied party under the agreement is poor.
Matters that may be dealt with in a premarital agreement include, but are not limited to, the following:
- the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- The rights and obligations of each of the parties in any of the property of either or both of them whenever or wherever acquired or located;
- The disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- The modification or elimination of spousal support;
- The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The choice of law governing the construction of the agreement; and
- any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
In post-marital agreements, it has been noted that a fiduciary duty exists that is not present in pre-marital agreements between spouses or prospective spouses. Case law states that a confidential relationship between husband and wife imposes the same duties of good faith and fair dealing on spouses as required of partners and other fiduciaries. However, adverse parties who have retained independent counsel may not owe fiduciary duties to one another. Texas Legislature enacted Section 4.105 with the understanding that married spouses owing fiduciary duties to one another would negotiate and execute post-marital agreements. Notwithstanding these duties, the legislature manifested the strong policy preference that voluntarily made post-marital agreements are enforceable.
Beside a Cohabitation and Domestic Partnership Agreement, what other documents should you supplement for a more complete legal coverage?
- A will with a designated executor to handle execution and distribution of all assets
- A durable financial power of attorney
- A durable medical power of attorney, directive to physicians, and a HIPPAA release form
- Partnership agreement to set out and clarify property rights, define ownership and related issues upon dissolution
Cohabitation, domestic partnership, premarital and post-marital agreements may be as creative as a party determines necessary. However, care must be given to see that such agreements protect the party, keep with public policy, and adhere to current Texas family law and applicable contractual law.
Alimony Expands in Texas
Spousal support law continues to evolve in Texas; but like the hot, dry summer days which seem to creep along, the process moves slowly.
Governor Rick Perry signed HB 901 on June 17, 2011. The law is effective for Texas divorce cases filed on or after September 1, 2011. In 1995, Texas was the 50th state to pass a law providing for spousal support and has been one of the most restrictive in the nation.
The new law provides potentially increased relief to spouses who have been out of the work force, are disabled, are victims of family violence or are the primary custodians of a disabled child.
Major changes to the spousal support law are:
1. The maximum amount of spousal support that courts may award increases from $2,500 to $5,000.00 per month, although still limited to 20 percent of the payer’s average gross monthly income.
2. The duration of spousal support is extended from a maximum of 3 years to a maximum of 5, 7 or 10 years, generally depending on the length of the marriage.
3. The law clarifies that if a person has primary care for a disabled child, the custodial parent may be prevented because of the child’s disability from earning sufficient income to meet the custodial parent’s minimum reasonable needs.
4. The law also clarifies that a person may not be held in contempt for failing to pay spousal support which is in an agreed order and extends beyond the period of time provided under the law.
In order to receive “maintenance,” (which is the statutory term for spousal support), the spouse seeking support must lack sufficient property to provide for the spouse’s “minimum reasonable needs”, AND one of the following:
(1) The recipient must be unable to earn sufficient income to provide for his or her minimum reasonable needs because of an incapacitating mental or physical disability;
(2) The marriage lasted for 10 years or longer and the recipient lacks the ability to earn sufficient income to provide for his or her minimum reasonable needs;
(3) The recipient is the custodian of a child of the marriage of any age who required substantial care and personal supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for the spouse’s minimum reasonable needs; OR
(4) The person ordered to pay support must have been convicted of or received deferred jurisdiction for an act of family violence during the pendency of the suit or within two years of the date the suit is filed.
Under the previous law, under most circumstances, the court could only order maintenance for a maximum of three years, regardless of the length of the marriage. Under the new law, the court can order maintenance to continue for:
(1) 5 years if the parties were married less than 10 years and the maintenance is awarded due to family violence;
(2) 5 years if the parties were married more than 10 years, but less than 20 years.
(3) 7 years if the parties were married more than 20 years, but less than 30 years;
(4) 10 years if the parties were married for more than 30 years.
In cases where the maintenance is awarded due to the mental or physical disability of the spouse or a child of the marriage, the court may order that the maintenance continue as long as the disability continues.
However, in all circumstances, the law provides that the Court shall order maintenance for the shortest reasonable period that allows the recipient to earn sufficient income to meet his or her reasonable needs.
If you are contemplating dissolving your marriage and have questions concerning your financial future, seek competent legal counsel to help you determine whether you could be eligible for spousal support under the expanded provisions of the new law.
Cohabitation and Domestic Partnership Agreements
Premarital and post-marital agreements in Texas have a complex history immersed in the community property presumption, the sate constitution, statutes and case law. Originally, such agreements were found to be unenforceable. But with amendments to the Texas Constitution, evolving statutes, recent case law, and improved draftsmanship, such agreements are now enforceable under contract law.
For some couples living together is a precursor to marriage; for others, there is no intent to ever marry, or the law prohibits the marriage, as in Texas with same sex marriages. The simple fact is, domestic partnership agreements involve a wide variety of circumstances, which may or may not involve the gay or lesbian couple.
Many couples choose to live together so they do not lose certain benefits under current rules of social security, military and insurance disability programs, or to stop those benefits from being taken away from their children. In other cases, couples who are divorced, and who may have children, may want to protect certain assets. In situations such as trust funds or inherited funds, beneficiaries simply do not want to place family money at risk. Other couples choose to shelter their own resources from the real or perceived obligations of their partner.
The marital agreement is considered to be a contract under Texas law. The premarital agreement must be in writing and signed by both parties. No actual consideration is required; however, to conform with contractual law, it may be wise to provide benefits for the non-monied party to avoid a later finding of unconscionability, particularly if the financial condition of the non-monied party under the agreement will be poor.
Matters that may be dealt with in a premarital agreement include, but are not limited to, the following:
- the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- the rights and obligations of each of the parties in any of the property of either or both of them whenever or wherever acquired or located;
- the disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- the modification or elimination of spousal support;
- the making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- the ownership rights in and disposition of the death benefit from a life insurance policy;
- the choice of law governing the construction of the agreement; and
- any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
Child support may not be adversely affected by a premarital agreement. Therefore, provisions providing for the elimination of child support upon separation or divorce are unenforceable. However, provisions for private education, college expenses, and choice of residence may be included, but may still be reviewed by a court to determine if they are in keeping with public policy.
In post-marital agreements, it has been noted that a fiduciary duty exists that is not present in pre-marital agreements between spouses or prospective spouses. Case law states that a confidential relationship between husband and wife imposes the same duties of good faith and fair dealing on spouses as required of partners and other fiduciaries. However, adverse parties who have retained independent counsel may not owe fiduciary duties to one another. Texas Legislature enacted Section 4.105 with the understanding that married spouses owing fiduciary duties to one another would negotiate and execute post-marital agreements. Not withstanding these duties, the legislature manifested the strong policy preference that voluntarily made post-marital agreements are enforceable.
Cohabitation, domestic partnership, premarital and post-marital agreements may be as creative as a party determines necessary. However, care must be given to see that such agreements protect the party, keep with public policy, and adhere to current Texas family law and applicable contractual law.
