Premarital and Postmarital Agreements can be very useful tools for planning out how a couple will deal with finances. There are many laws and rules that apply to marital property which can be complex and can produce unwanted or unexpected results. The primary rule of marital property, stated very simplistically, is the definition of marital property. Texas is a community property state, therefore all marital property is jointly owned by the couple. Marital property must be divided in the event of a divorce or death. Texas law also uses a community property presumption, which declares that any property owned by a married person is presumed to be community property and therefore jointly owned. Community property is any property which is not clearly proven to be separate property (property owned by only one member of the couple). Separate property is any property that was acquired by gift or inheritance, or owned by a party prior to the marriage.
Because of the presumption in favor of community property, a party has to clearly prove an item is their separate property in order for it to not be divided in the event of divorce. To further complicate things, Texas employs the concept of comingling, which holds that if a person mixes separate property with community property to the extent that it can no longer be clearly identified and separated, it all becomes community property. This problem arises most frequently in the context of cash and investment accounts.
Premarital and postmarital agreements can help avoid many of the undesirable pitfalls that can result without a clear understanding of the rules and an agreement on the management and handling of the parties' property.