“I’m still not excited about the idea of writing a prenup. Is there anything else I should know about our merging of assets, or worse, merging of debt?”
In case you’re worried, you don’t inherit your spouse’s pre-existing debt when you get married. Phew. However, your responsibility to your spouse’s debt varies by your state’s approach to community property rules or common law rules.
Let’s say your spouse buys a car after you’re married, and is the primary person driving that vehicle and paying the bills. If something happens to your spouse, you’re on the hook for paying back that car loan even if the car isn’t in your name. In nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.; Alaska has an opt-in), these community property laws state you’re jointly responsible for debts incurred after you’re wed.
If your high-rolling spouse declares bankruptcy, creditors can still knock on your door to claim past debts from you, even if you didn’t co-sign on any of those debts.
Most states abide by this system, where if a deed or loan is in your spouse’s name, the debt or property stays in their name. As long as your name is not on the loan, you aren’t responsible for your spouse’s debt, even if that loan was signed after you wed. So if you and your spouse lived and bought that car in a common law state, the loan company can’t force you to pay up for the remainder of your spouse’s loan.
If you’re still not hollering for a prenup, that’s cool- but look up your state’s status when you draft your will. Community property and common law play a part in estate planning too, though in most states, ownership of a deceased spouse’s assets are automatically transferred to you.