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Protecting spouses from premarital debt

On behalf of The Walters Law Group, Ltd. posted in Divorce on Thursday, April 11, 2013.

Some Chicago residents may wonder whether a prenuptial agreement can help protect a future spouse from debts acquired prior to the marriage. The issue often arises when a person with substantial assets enters into a relationship with a person who has accumulated several debts.

Property acquired after spouses enter a marriage is divided equitably during a divorce in Illinois. However, property acquired prior to the marriage remains the sole and separate property of the spouse that acquired it. A home that is owned by a person does not automatically become the property of a spouse upon marriage. The asset would only become the property of both spouses if the title or the mortgage were changed to reflect joint ownership. Paying taxes, the mortgage or insurance on separate property from joint accounts will not change the nature of the property or give the other spouse a claim to the property.

Similarly, debts acquired prior to the marriage remain the debts only of the spouse that incurred them, even if paid from a joint bank account after the partners marry. Marriage does not convert sole debts to joint debts.

Prior to entering a marriage, signing a prenuptial agreement can help clearly outline each spouse’s claim to property held prior to the marriage. A family law attorney may be able to negotiate and draft an agreement that will protect a person’s best interests in the event that the marriage should fail. A well-drafted prenuptial agreement may protect against claims that a spouse converted separate property to marital property or that a spouse promised to pay premarital debts acquired by the other spouse.

Source: Fox Business, “Will Prenup Protect My Fiancee From My Debt?,” Steve Bucci, March 28, 2013

Source: About.com, “Illinois Divorce Laws,” Cathy Meyer