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What is a partition and exchange agreement?

Seeing as Texas does not recognize legal separations, you and your spouse may wonder how you can legally divide property without going through the more complex, and permanent, divorce process. Texas law provides for two documents you may use to effectively do this: A premarital property agreement and a partition and exchange agreement.

A premarital agreement, or prenuptial agreement, is an agreement you must enter prior to tying the knot, and before you decide to separate. According to the Texas Family Code, though, you can create a partition or exchange of community property at any time.

What can a partition and exchange agreement do?

A partition and exchange agreement allows you and your spouse to separate or exchange between yourselves any property you acquired or comingled during your union or, in other words, any community property. Once you transfer property or interest in property to the other spouse via this type of agreement — or vice versa — it becomes the separate property of the recipient spouse. You may also use this type of agreement to exchange or partition the future income and earnings that arise from the property transferred.

When does a partition and exchange agreement become enforceable?

A judge does not need to review a partition and exchange agreement for it to become enforceable. Rather, you must ensure your agreement is in writing and that it contains both parties’ signatures for the law to consider it legally binding.

There are a few instances in which a judge may not enforce a partition and exchange agreement. Those include if either party did not enter the agreement voluntarily or if the agreement is “unconscionable.” An unconscionable agreement is one that is unfair or one that parties entered without one party fully understanding what property and finances were at stake. A court must decide on an issue of unconscionability if one should arise.

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