USA – TEXAS Law and Practice Contributed by: Perrin Clark and Meredith McIver, Ytterberg Deery Knull LLP
trust; so, the testator or grantor should carefully con - sider whether or not to deliberately include posthu - mously conceived children, with the understanding that this could create various practical and theoreti - cal problems unless thoughtfully and carefully done. Assisted Reproduction: Donor Gametes and Surrogacy In Texas assisted reproduction is legal and a well- established service. This includes the use of donor gametes (eggs and sperm). It also includes traditional surrogacy in which the gestational mother utilises her own egg. And it includes gestational surrogacy in which a woman agrees to carry to gestation a child to whom she is not genetically related. Gamete donation can be coupled with both traditional and gestational surrogacy in appropriate circumstances. The donation of gametes should be done pursuant to egg dona - tion agreements and sperm donation agreements that address the parties’ legal rights. Traditional surrogacy is not specifically provided for under Texas law and, though it should be done pursuant to a surrogacy agreement, the rights of the gestational mother can - not be severed in advance of the birth. The rights of the gestational mother can only be severed after birth and this is done in a proceeding similar to an adoption proceeding. This creates significant uncertainty and makes traditional surrogacy a less attractive method. Contrastingly, the Texas Family Code specifically pro - vides for gestational surrogacy and gestational sur - rogacy agreements, which are subject to review and validation by the court, which then may issue an order determining the parental rights of the parties, either in advance of or after the birth. If done in advance of the birth, this is known as a pre-birth order. 9.2 Same-Sex Marriage Same-sex marriages are recognised by both Texas laws and the US federal government. 9.3 Cohabitation and Unmarried Couples Unmarried couples generally do not receive the same tax and succession benefits as married couples, either under federal or Texas law. However, common law (“informal”) marriage does exist in Texas and, for an otherwise unmarried couple, can give rise to legal rights similar to those of a formally married couple. Under Section 2.401 of the Texas Family Code, “the
marriage of a man and woman may be proved by evi - dence that... the man and woman agreed to be mar - ried and after the agreement they lived together in this state as husband and wife and there represented to others that they were married”. So, the couple must have: (i) agreed to be married; (ii) cohabitated; and (iii) represented to others that they were married. Though claims of informal marriage may be brought while both parties are living, claims of informal marriage more often are brought by a surviving party against the estate of the deceased party. After the death of one of the parties, the deceased party is no longer present to testify; so, testimony comes from the surviving party and other persons who were witness to the relation - ship. Whether each of these prongs is proven and whether the couple was married will be a question of fact for the trier of the fact (judge or jury) to decide when weighing the evidence presented. Disputes over informal marriages often come down to the third prong – whether the couple represented to others that they were married. Of course, an announced engagement, ongoing negotiation of a premarital agreement, and a planned formal wedding are helpful facts if arguing that an informal marriage did not occur. But, despite helpful facts and a case that is winnable on the mer - its, one does not want a claim brought as a nuisance which still must be resolved. To help mitigate such risks, we routinely recommend cohabitation agree - ments to clients when cohabitating in advance of or without intending a formal marriage. A key provision in a cohabitation agreement is recognition by the par - ties that (i) they are not married and (ii) they will be married only following a formal ceremony. In order to help ensure that it is enforceable, each party should be represented by counsel with respect to the review and signature of the cohabitation agreement.
10. Charitable Planning 10.1 Charitable Giving
Charitable giving is highly incentivised under the US tax code. Charitable gifts during life and at death are not subject to US transfer tax. Further, lifetime charitable gifts can qualify the donor for substantial tax deductions equivalent to the value of the prop - erty given, subject to certain limitations. The value of cash gifts to public charities is deductible up to 60%
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