Couples can make a lot of assumptions, as we all do. We may believe something we have on “good authority.” For example, couples may have an idea about how Texas deals with community property and the right of survivorship. However, that understanding may not be correct. Read on.
Community property is defined in Texas as “the property, other than separate property, acquired by either spouse during marriage.” The Right of Survivorship, or more specifically Joint Tenancy with the Right of Survivorship allows all of the couple’s interest in their community property to go automatically to the surviving spouse. When a couple creates a joint tenancy with right of survivorship, there is no probate, and the community property is not part of the estate. The surviving spouse doesn’t have to worry about court proceedings.
However, a survivorship agreement may not be the right answer for every Texas couple, especially when combining the spouses’ two estates put the worth of the property over the threshold for federal gift and estate taxes. Your attorney will know how to deal with this situation.
Spouses may have somewhat differing interests, based on the kids who are “yours, mine, and ours.” There can be divergent financial needs and other issues that may make discussing such matters uncomfortable. Also, a former spouse may be the beneficiary of a 401K as part of the divorce settlement. Keeping track of these matters can get complicated, that’s why it’s important to sit down with an attorney who is knowledgeable in the issues of family law here in Texas, where we have community property.
Another wrinkle to this subject is the premarital agreement. A Premarital Agreement is an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage. A premarital agreement must be in writing and signed by both parties and may contain any legal terms that the couple wants. This includes:
- Each spouse’s rights and obligations on any of their property, whenever and wherever it’s acquired or located, including whether the surviving spouse will have a right to live in the house for the rest of their life;
- The right to buy, sell, use, transfer, and control property;
- How the property is to be divided upon separation, marital dissolution, death, or other events;
- Modification or elimination of spousal support (but not child support);
- Making a will, trust, or other arrangement to carry out the agreement.
A premarital agreement becomes effective on marriage and may only be amended or revoked by a written agreement signed by both spouses.
Community property and premarital agreements can get very complicated quickly, especially with second and third marriages. Work with an attorney to make sure that you and your spouse have everything set up the way you both want it—and that it’s drafted legally and professionally.
If you have questions about community property, its effect on blended families, or premarital agreements, contact the Hailey-Petty Law Firm in Austin at (512) 655-2186 or contact us via email.
Your future is our business.