TEXAS PREMARITAL AGREEMENTS: STARTING WITH THE BASICS
Texas law strongly supports the enforceability of marital property agreements, including premarital agreements. Under Texas Family Code Section 4.003, parties may contract with respect to:
- Rights and obligations in the property of either or both parties
- The right to buy, sell, use, transfer, manage, and control property
- Disposition of property upon separation, divorce, death, or another event
- Modification or elimination of spousal support
- Making a will, trust, or other arrangement to carry out the agreement
- Ownership and disposition of life insurance death benefits
- Choice of law governing construction of the agreement
- Any other matter, including personal rights and obligations, so long as it does not violate public policy or a criminal statute
There are, however, important limits. A premarital agreement cannot adversely affect a child’s right to support, nor can it predetermine conservatorship (custody), possession and access (visitation), or parental rights and duties. Those issues are always decided by the court based on the child’s best interest at the time of the proceeding.
Property Matters: How Do We Want to Treat the Couple’s Property?
Absent a marital property agreement, Texas law presumes that all property possessed by either spouse—or property to which either spouse has a claim—is community property. This presumption generally applies regardless of whose name is on title, who purchased the asset, or who paid for it.
If the parties divorce, the court must divide the community estate in a “just and right” manner, which does not necessarily mean equal.
While this flexibility can be helpful, it also creates uncertainty. Many couples choose to reduce that uncertainty through a premarital agreement by modifying or eliminating the community property system altogether.
Some couples designate certain assets as one spouse’s separate property (for example, that spouse’s income, retirement accounts, or vehicles). Others explore shared ownership structures such as:
- Tenancy in common
- Joint tenancy with right of survivorship
Both approaches allow for shared ownership while limiting judicial discretion in a divorce. Each, however, carries very different legal and practical consequences.
Big Picture: What Are We Actually Choosing?
When we choose between “tenants in common” and “joint tenants,” we are answering practical questions:
- What happens to each spouse’s share at death?
- Can that share be left to someone else?
- Can ownership percentages differ?
A premarital agreement overlays these choices onto Texas community property law and contractually overrides default rules. In other words, the form of title is not just a label—it directly affects estate planning, control, and financial outcomes.
Tenants in Common: Separate Slices of the Same Pie
When spouses hold property as tenants in common, each owns a distinct share of the property. That share can be equal, but it does not have to be—common splits include 60/40 or 75/25, often reflecting contributions.
Key features include:
- Each spouse owns a separate share that can be transferred or devised by will without the other spouse’s consent
- No automatic right of survivorship; a deceased spouse’s share passes through their estate
- Flexibility in ownership percentages
From a premarital agreement standpoint, this structure allows for precise control. For example, the agreement can state that a home will always be 70 percent one spouse’s separate property and 30 percent the other’s, regardless of future events. It can also define responsibility for mortgage payments, taxes, insurance, and improvements—and whether those payments affect ownership percentages.
The tradeoff is that, upon death, the surviving spouse may end up co-owning the property with the deceased spouse’s heirs. That outcome is manageable but requires planning.
Joint Tenancy: Survivorship and Simplicity
Joint tenancy with right of survivorship emphasizes equality and automatic transfer at death.
Under this structure:
- Each spouse owns an equal, undivided 50 percent interest, regardless of contribution
- Upon death, the deceased spouse’s interest automatically passes to the surviving spouse, outside of probate
This approach is often attractive for couples who prioritize simplicity and intend to leave everything to each other.
From a drafting perspective, joint tenancy prioritizes administrative ease over precise economic allocation. A premarital agreement can still address unequal contributions through reimbursement provisions, but legal title remains equal.
The primary risk is that this structure can unintentionally disinherit children or other intended beneficiaries. If one spouse intends for their share of an asset to pass to children, joint tenancy may defeat that objective.
Death Planning: Why This Choice Matters
The distinction between these ownership forms is especially significant in estate planning.
With tenancy in common:
- Each spouse’s share is part of their estate
- It can be transferred by will or trust
- Probate may be required
- The surviving spouse may co-own property with the deceased spouse’s heirs
With joint tenancy:
- The property passes automatically to the surviving spouse, regardless of the will
- Probate is avoided for that asset
- Children or other beneficiaries may receive nothing from that asset unless the surviving spouse later provides for them
For blended families or second marriages, this often becomes a central policy decision: prioritize the surviving spouse’s control or preserve defined shares for children.
Economics: Equal vs. Unequal Ownership
Tenancy in common is generally the better tool when ownership should reflect financial contributions:
- Ownership percentages can be fixed in the agreement and mirrored in title
- Income, proceeds, and tax attributes can be allocated proportionally
- The agreement can address whether later contributions change ownership or create reimbursement rights
Joint tenancy, by contrast, assumes equal ownership regardless of financial input. While reimbursement provisions can address fairness, they do not change the underlying 50/50 legal structure.
For couples with unequal contributions—especially where significant premarital assets are involved—tenancy in common is often the cleaner solution.
Divorce: What Happens If Things Go Sideways
Premarital agreements are frequently drafted with divorce in mind, and ownership structure plays a key role.
With tenancy in common:
- Each spouse’s ownership percentage is already defined
- The agreement can specify division, sale procedures, or buyout rights
- Certain assets can be confirmed as separate property and removed from division entirely
With joint tenancy:
- The agreement should address what happens to survivorship rights upon divorce
- Common approaches include automatic conversion to tenancy in common or mandatory sale/buyout provisions
- Economic terms—valuation, division, and reimbursement—must still be addressed
A well-drafted agreement will typically treat death and divorce as distinct scenarios. For example, spouses may choose survivorship during marriage for simplicity, but terminate that feature upon filing for divorce.
How to Think About the Choice
Ultimately, this decision is less about legal terminology and more about priorities. The key questions usually include:
- Do either of you have children from prior relationships you want to protect?
- Are contributions to specific assets unequal?
- Is minimizing probate a priority, even if it interferes with inheritances for children?
For second marriages with children and unequal contributions, tenancy in common combined with a detailed premarital agreement is often the better fit. For first marriages focused on simplicity and leaving everything to a spouse, joint tenancy may be more appropriate.
We would be happy to discuss any of these matters with you