Wedding season is fast approaching and some of you headed down the aisle may be wondering if you are also marrying your future spouse’s debt. The short answer is that you may be marrying it, but you aren’t legally liable for it. The longer and better answer is that it all depends on your state of residence and your financial behavior after marriage. State laws govern marital property. Generally, if you live in a ‘community property’ state the debt of each spouse is considered to be owed by both spouses if it was incurred during the marriage. Community property states are Louisiana, Wisconsin, Arizona, Idaho, Nevada, Washington, Oregon, California and New Mexico. Alaska offers couples a choice. If you live in a common law state debts incurred by each spouse are owed only by that spouse unless the debt is for a joint family purpose – housing, food, college tuition, etc. Common law states are all those not listed above. These laws also apply to domestic partnerships and civil unions in those states that offer these arrangements all the rights of marriage. In either case, if one spouse has pre-marital debt, that debt is not considered owed by both spouses regardless of the state in which you live, unless you maintain joint bank accounts or own joint property. In other words, if your spouse defaults on debt that was incurred before the marriage and the creditor decides to come after assets, they will more than likely look for anything that has your spouse’s name on it – joint bank accounts, investments or property. As always, it’s best to get a professional opinion, since most states have their own subtle interpretations of marital property laws. You may not be legally liable for pre-marital debts, but that leaves questions about moral liability, family budget and marital bliss. The time to discuss debts and budgets is before you walk down the aisle. There’s nothing worse than money coming between a couple.
Disclaimer: I am not an attorney and this is not intended as legal advice.