For many couples, engagement is an exciting time. You are planning a wedding, planning for your future, and planning how you will live together as a household. However, if you are getting married and you or your spouse still has student loan debt, it is important to consider how you will handle that debt moving forward.
If you pay for your spouse’s loans, you could also share responsibility for the debt.
It is also natural to go into a marriage with the intent to share everything and to help each other with the challenges we face, which can mean joining your finances. However, helping your spouse with their debt could result in commingling. Commingling occurs when marital funds are used to contribute to their separate property, including paying for their individual debts.
As a community property state, Texas law considers most of the assets gained during the course of your marriage to belong to both you and your spouse. Your debts and your money fall under that distinction unless you can prove that they are yours alone. Commingling makes it difficult or impossible to determine which of your assets is separate.
Creating a prenuptial agreement could be key.
A prenuptial agreement is an important option for couples entering marriage with debts to be payed, and you would not be alone in choosing this path. Recent surveys have indicated that more couples are building a prenuptial agreement as part of their wedding plans.
Creating this agreement allows you to discuss how you will handle your debt during your marriage and, if your marriage should end, how you will handle it during your divorce. This can include agreeing that your spouse’s debt will be paid off only from their paycheck and agreeing that the debt is to be considered separate property.
Your engagement is a time for making plans about your future together, and your prenuptial agreement could be an essential part of that planning. This agreement could be an important way to explore your priorities now and to protect yourselves for the future.