Articles Posted in Marital Property Agreement

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houseIn Araujo v. Araujo, an ex-wife appealed from an order denying her motion to revoke and set aside a mediated settlement agreement for her divorce. The ex-wife argued on appeal that the agreement lacked consideration and therefore wasn’t enforceable, her own attorney coerced her to sign it, and there was an invalid provision that made it unenforceable.

The case arose when a husband and wife entered into a mediated settlement agreement in August 2014. It awarded the wife certain property in two Texas cities and required her to pay $27,000 to the husband by a certain date. The agreement stated that each party had made a fair, reasonable disclosure of finances and property to the other. The wife was represented by an attorney, who withdrew from representation in October 2014.

Her second attorney filed a motion to revoke and set aside the agreement. She argued that the agreement resulted in an unjust estate division, due to the husband’s fraud. She claimed that the only property she got under the agreement was separate property, that she was entitled to half of the community property awarded to her ex-husband, that the agreement didn’t address the retirement in the amount of about $22,000, and that it didn’t address or divide the couple’s two vehicles. A trial court denied her motion.

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ringsFamily law judges encourage those getting a divorce to enter into settlement negotiations rather than proceed to trial. Under rule 11 of the Texas Rules of Civil Procedure, agreements reached during these negotiations are not enforceable unless they are written, signed, and filed with the divorce papers as part of the record, or the agreement is made in open court and entered as part of the record. In order to have the agreement be enforced, all material terms are supposed to be included, and they should be clear and unambiguous.

In Bush v. Bush, a Texas Court of Appeals considered the enforceability of a rule 11 agreement. The case was an appeal from a divorce decree in which the husband challenged the trial court’s award of two parcels of real property to his former wife. The wife sued for divorce in March 2013, and in response the husband filed a counter petition for divorce and moved to enforce a rule 11 agreement regarding the division of property, which his ex-wife and he had filed in a prior divorce case that was dismissed in 2006.

He subsequently moved to transfer and consolidate the current divorce proceeding with the previously dismissed case. The trial court came to the decision that the prior divorce had been dismissed by agreement of the parties and that since the parties agreed to the dismissal and signed the order, everything in the prior proceeding had been dismissed, and the prior case did not need to be reinstated into the current case. It also found that rule 11 agreements may be revoked until they are accepted by the court and incorporated in a final order, and this wasn’t done in the prior proceeding. The court also held that even if the agreement had survived, it didn’t have the specificity necessary to be enforced, although with respect to the sale of a particular piece of real property, the agreement might be enforceable through the application of contract law.

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I know what you’re thinking…. “I’m already married; how is it not too late?” Don’t worry; the solution is a postnup! The Texas Family Code allows for couples to enter into a postnuptial agreement (or marital property agreement), which will offer many of the same protections and advantages that a prenuptial agreement offers.

Current Property. At the time of marriage, both spouses often have separate property interests and liabilities that were acquired prior to marriage. Without a prenup, the spouses’ separate property estates often become commingled and indistinguishable from the community estate of the spouses that begins upon marriage, especially if the spouses have been married for a substantial period of time. For example, during marriage, a spouse may inherit a large estate from a relative, gifts, buy a house, sell or trade property, or put separate property money in the same bank account. Although you and your spouse did not execute a premarital agreement, it is not too late to distinguish your separate property in a marital property agreement.

Chapter 4 of the Texas Family Code, Subchapter B, outlines the statutory requirements and guidelines for a marital agreement. Section 4.102 states: