## Facts

- Before marrying in 1985, Darrell Ray Thompson participated in the Texas County and District Retirement System (TCDRS), a defined contribution plan funded by employee and employer contributions.
- The parties executed a premarital agreement identifying Thompson’s existing retirement benefits as his separate property and stating they “shall remain” his separate property.
- At marriage, Thompson’s TCDRS account balance was $11,962.28 (conceded separate property).
- At divorce, the TCDRS account balance was $116,754.39; the increase represented contributions and interest accrued during the marriage.
- After a bench trial, the trial court characterized the entire TCDRS account (including amounts accrued during marriage) as Thompson’s separate property.
- The wife appealed only the characterization of the retirement account.

## Issues

1. Whether contributions to a defined contribution retirement plan and the interest earned on those contributions during marriage are community property under Texas law.
2. Whether the premarital agreement converted during-marriage contributions and earnings in the TCDRS account into Thompson’s separate property.
3. Whether the premarital agreement was void or unenforceable.
4. Whether parol evidence was admissible to show the parties intended the premarital agreement to cover future retirement contributions.

## Decision

- The court held that contributions and interest earned in the TCDRS account during the marriage were community property.
- The court held the premarital agreement preserved only the premarital TCDRS balance as separate property and did not reach future contributions or earnings.
- The court affirmed the divorce decree and other property division.
- The court reversed the portion of the judgment characterizing the entire TCDRS account as separate property and remanded for re-division of the retirement plan consistent with the opinion.

## Legal Principles

- Property acquired during marriage is presumed to be community property unless shown to be separate.
- Retirement benefits in a defined contribution plan are accrued over time; their character depends on when contributions and earnings are acquired, permitting apportionment between separate and community interests.
- The inception-of-title doctrine does not justify treating all retirement plan accumulations as separate merely because the plan existed before marriage when additional accruals occur during marriage.
- A premarital agreement is construed by its text; language addressing existing retirement benefits does not, without clear and express terms, convert future contributions and earnings (otherwise community) into separate property.
- When a premarital agreement is unambiguous, extrinsic (parol) evidence cannot be used to expand its scope beyond its plain meaning.

## Conclusion

The appellate court required apportionment of the TCDRS account: the premarital balance remained the husband’s separate property, while contributions and investment growth accrued during the marriage were community property to be divided on remand.


McClary v. Thompson, 65 S.W.3d 829 (Tex. App.—Fort Worth 2002)