Why you need a prenup if you plan to go to school during marriage

Many people think of a prenuptial agreement as a tool to clearly lay out how a couple will divide their assets in the event of a divorce. While this is true, a prenuptial agreement can also address debt.

Like assets, a couple will also have to determine how to divide debts if they choose to get divorced, and today, one of the most common types of debt is student loan debt.

The rules about dividing educational debt in divorce depend on when the debt was incurred. If you have completed your degree and enter into marriage with debt, you should expect that debt to stay with you forever. Even if you and your spouse lived together before getting married, during which time you took out student loans, you will still likely be responsible for them after divorce. Although you may have been planning for marriage, the courts treat cohabitating but unmarried couples like roommates.

If you take on student debt while you are married, however, things change. Often, courts will consider how one spouse’s degree benefited both the student and the other spouse. A court may also take a look at the earning power of each spouse. If one spouse will clearly struggle to pay off student loans while the other will have no problem, a judge may be more likely to place at least some of the debt with the higher-earning spouse.

Although you can fairly safely assume that student debt you bring to a marriage will always be yours, if you think you might go to school while married, a good way to prepare is with a prenuptial agreement. When drafting a prenuptial agreement, it is very important to work with an attorney to not only ensure that your plans make sense, but also to ensure that the agreement will hold up in court should you ever need to use it.

Source: The Wall Street Journal, “Who Is Responsible for the Student Loans After Divorce?” Charlie Wells, April 13, 2014