There are several misconceptions about prenuptial agreements. People assume they are only for wealthy individuals who want to protect their assets in the unlikely event of divorce. Couples who are not extremely wealthy and do decide to establish a prenup often forget to include a debt clause in the agreement. Couples acquire several forms of debt prior to their marriage that they do not want to burden their new spouse with. States have laws for debts acquired before and after tying the knot. A Salt Lake City prenuptial agreements attorney can create an all encompassing arrangement for the new couple that protects both of their best interests.
Community Property
Ten states currently have community property laws for assets and debts. This means that any debt or asset gained prior to or during the marriage are the responsibility of both parties even if it was in only one spouse’s name. A well established prenuptial agreement overrides these laws and will divide debts and assets according to the couples specifications. Something to keep in mind is that a prenuptial or postnuptial agreements is only between the couple and no one else. So creditors will not be informed and will still try to come after both spouses during collection attempts. Accounts that have both individuals names on it are, of course the responsibility of the couple.
Student Debt
Without a prenup or postnup, if your spouse goes back to school and acquires debt while doing so even, if they are the sole name on the account, you can be liable. The reasoning is that by your spouse furthering their skills and bringing in a higher income for the household you also benefited. Since you both benefit from the education, you are both liable for the debt. If your spouse is thinking of going back to school prior to getting married, have an honest discussion and outline the repayment and liability in the prenup. When a couple has been married for some time and one spouse wishes to go back to school a postnuptial agreement can come into play. If a prenuptial agreement has already been established you can meet with a Salt Lake City prenuptial agreement attorney to modify your prenup or start a postnup.
Premarital vs. Post Marital Debts
As unromantic as this contract may sound it is the smart thing to do. The idea of what’s yours is mine is great in theory but many couples handle finances differently and that can lead to arguments and divorce. These forms of contracts can actually strengthen a relationship because they clearly define who is responsible for what and set realistic limits. The couple has to sit down and discuss what they want in the agreement and their future financial goals. You will need to decide what to do with your current debts like credit cards and car loans. Will you be both be sharing the burden or will you keep it separate? Postnuptial debt is acquired after you get married and you need to consider how that will be handled. If one of you takes out a new credit card and is the only person using it, will you both be paying for it? These are some things that need to be discussed when meeting with a Salt Lake City prenuptial agreement attorney.
