By Goodman H.B. No. 734
76R3098 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the conversion of separate property to community
1-3 property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 4, Family Code, is amended by adding
1-6 Subchapter C to read as follows:
1-7 SUBCHAPTER C. AGREEMENT TO CONVERT SEPARATE PROPERTY TO
1-8 COMMUNITY PROPERTY
1-9 Sec. 4.201. DEFINITION. In this subchapter, "property" has
1-10 the meaning assigned by Section 4.001.
1-11 Sec. 4.202. AGREEMENT TO CONVERT TO COMMUNITY PROPERTY. At
1-12 any time, spouses may agree that all or part of the separate
1-13 property owned by either or both spouses is converted to community
1-14 property.
1-15 Sec. 4.203. FORMALITIES OF AGREEMENT. (a) An agreement to
1-16 convert separate property to community property:
1-17 (1) must be in writing and:
1-18 (A) be signed by the spouses;
1-19 (B) identify the property being converted; and
1-20 (C) specify that the property is being converted
1-21 to the spouses' community property; and
1-22 (2) is enforceable without consideration.
1-23 (b) The mere transfer of a spouse's separate property to the
1-24 name of the other spouse or to the name of both spouses is not
2-1 sufficient to convert the property to community property under this
2-2 subchapter.
2-3 Sec. 4.204. MANAGEMENT OF CONVERTED PROPERTY. Except as
2-4 specified in the agreement to convert the property and as provided
2-5 by Subchapter B, Chapter 3, and other law, property converted to
2-6 community property under this subchapter is subject to:
2-7 (1) the sole management, control, and disposition of
2-8 the spouse in whose name the property is held;
2-9 (2) the sole management, control, and disposition of
2-10 the spouse who transferred the property if the property is not
2-11 subject to evidence of ownership;
2-12 (3) the joint management, control, and disposition of
2-13 the spouses if the property is held in the name of both spouses; or
2-14 (4) the joint management, control, and disposition of
2-15 the spouses if the property is not subject to evidence of ownership
2-16 and was owned by both spouses before the property was converted to
2-17 community property.
2-18 Sec. 4.205. ENFORCEMENT. (a) An agreement to convert
2-19 property to community property under this subchapter is not
2-20 enforceable if the spouse against whom enforcement is sought proves
2-21 that the spouse did not:
2-22 (1) execute the agreement voluntarily; or
2-23 (2) receive a fair and reasonable disclosure of the
2-24 legal effect of converting the property to community property.
2-25 (b) An agreement that contains the following statement, or
2-26 substantially similar words, in conspicuous print on the same page
2-27 as the signature of the spouses, is rebuttably presumed to provide
3-1 a fair and reasonable disclosure of the legal effect of converting
3-2 property to community property:
3-3 "This instrument changes separate property to community
3-4 property. This may have adverse consequences during marriage and
3-5 on termination of the marriage by death or divorce. For example:
3-6 "Exposure to creditors. If you sign this agreement,
3-7 all or part of the separate property being converted to community
3-8 property may become subject to the liabilities of your spouse. If
3-9 you do not sign this agreement, your separate property is generally
3-10 not subject to the liabilities of your spouse unless you are
3-11 personally liable under another rule of law.
3-12 "Loss of management rights. If you sign this
3-13 agreement, all or part of the separate property being converted to
3-14 community property may become subject to either the joint
3-15 management, control, and disposition of you and your spouse or the
3-16 sole management, control, and disposition of your spouse alone. In
3-17 that event, you will lose your management rights over the property.
3-18 If you do not sign this agreement, you will generally retain those
3-19 rights.
3-20 "Loss of property ownership. If you sign this
3-21 agreement and your marriage is subsequently terminated by the death
3-22 of either spouse or by divorce, all or part of the separate
3-23 property being converted to community property may become the sole
3-24 property of your spouse or your spouse's heirs. If you do not sign
3-25 this agreement, you generally cannot be deprived of ownership of
3-26 your separate property on termination of your marriage, whether by
3-27 death or divorce."
4-1 Sec. 4.206. RIGHTS OF CREDITORS; RECORDING. (a) A
4-2 conversion of separate property to community property does not
4-3 affect the rights of a preexisting creditor of the spouse whose
4-4 separate property is being converted.
4-5 (b) A conversion of separate property to community property
4-6 may be recorded in the deed records of the county in which a spouse
4-7 resides and of the county in which any real property is located.
4-8 (c) A conversion of real property from separate property to
4-9 community property is constructive notice to a good faith purchaser
4-10 for value or a creditor without actual notice only if the agreement
4-11 to convert the property is acknowledged and recorded in the deed
4-12 records of the county in which the real property is located.
4-13 SECTION 2. This Act takes effect January 1, 1999, but only
4-14 if the constitutional amendment proposed by the 76th Legislature,
4-15 Regular Session, 1999, relating to the conversion of separate
4-16 property to community property, is approved by the voters. If the
4-17 proposed constitutional amendment is not approved by the voters,
4-18 this Act has no effect.
4-19 SECTION 3. The importance of this legislation and the
4-20 crowded condition of the calendars in both houses create an
4-21 emergency and an imperative public necessity that the
4-22 constitutional rule requiring bills to be read on three several
4-23 days in each house be suspended, and this rule is hereby suspended.