Marital Law Defined
Martial law is defined as all conditions present between two persons legally married concerning property. Be aware that certain states include what is called common-law marriage. In this situation, determined by the state of residence, two adults cohabitating together for a said amount of years can be legally bonded under marital law, without ever making it official. Marital law will affect your personal assets, income, and also debt accumulated during the marriage period. Your previous assets are not included.
Danger of Marital Debt
When entering into a marriage, you are entering into a legally binding contract. Within this contract you are taking on the liability of your spouse’s future debt, contracts, and legal ramifications. There are dangers in this as essentially in the eyes of the law, what your spouse does, you too are personally liable.
Video: What Happens to Debt When You Divorce?
While you are not responsible for your spouse’s old debt, incurred prior to marriage, be aware it may still affect you. You may not be sued for any of this money of course, but a poor credit rating for your spouse will mean poor joint credit for you both. This leads to poor loan options and the possibility of being turned down for car loans, credit, and even mortgage and home rental applications.
While there is not much you can do if the person you wish to marry has had or currently has serious debt obligations, there are some things you should know prior to marriage.
- Your future debt, regardless of whose name is on the account, will be joint debt. Meaning, you are liable for any debt your spouse accumulates.
- If your spouse has civil judgments against them, these judgments could affect your joint property.
- Should your spouse commit a crime during your marriage that leads to a new civil judgment, your property is at risk for seizure and you personally can be sued.
- Debt incurred during a marriage is not dissolved as easily as the marriage itself.
Prenuptial Agreements and Marital Debt
There are many benefits to a prenuptial agreement. A prenuptial agreement can take many forms but is simply defined as a contract between two people prior to marriage or civil union. The contract typically covers such provisions as how property will be divided and spousal support arrangements, if any, in the event of divorce. Prenuptial agreements offer a significant degree of protection for your assets such as:
Protect the rights of your children and grandchildren from a previous marriage concerning inheritance. - Protect your business from being divided up in your assets upon divorce and ensure your spouse has no control over your business’ operations.
- Make each party non-liable for previous debt.
- Limit the amount of spousal support or child support that will have to be paid upon divorce.
- Protect the financial interests of older persons, persons who are on their second (plus) marriage, and persons with large amounts of money and/or property.
As you can see, the benefits to a prenuptial agreement are many. Many people however falsely believe that prenups are a full-proof insurance policy against your spouse having rights to your assets or damaging your credit.
Video: Understanding Pre-Nuptial Agreements
A prenuptial agreement will not:
- Affect anything which takes place during the marriage related to debt.
- Protect your personal credit history.
- Eliminate your responsibility for civil judgments against your spouse made during your marriage.
State Law Governs Marital Debt
Aside from your taxpayer status as a married person, the federal government does not govern marriage law. States are left to determine who is liable for what and many other factors concerning your marriage and debt. These state laws vary greatly from one to the other. For instance in California you will be more financially liable to pay your spouse than in Montana. Check your state laws to determine the differences affecting your marriage.
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