Using a Prenup to Protect Against Debt


Prenups have a reputation of being exclusively for high net worth couples or wealthy people who want to control their spouses’ access to assets. More often than however, this is not the case. Not everyone makes a prenup just to hold on to “what’s theirs.” Prenups are becoming a more acceptable way for spouses-to-be to outline their financial goals and avert any potential financial problems. In some cases, people may want to make a prenup to protect the

mselves or their spouse against the claims of creditors. 

Americans in Debt

A recent New Yorker article explained how prenups have become a more common tool for ordinary people, not just the super wealthy. One of the reasons people want to get a prenup is to protect themselves (and each other) against debt. 

43.4 million borrowers have federal student loan debt in the US today. The average federal student loan debt balance is $37,014 or $40,904 when private debt is factored in. Medical debt is even more of a burden for ordinary Americans. 9 percent of American adults owe medical debt of $250 and over, while 11 million owe more than $2,000 and 3 million owe more than $10,000, according to a recent analysis. Then there is credit card debt: the average American has $5,221 in credit card debt according to recent Experian statistics. 

Debt and Death

One of the most tragic scenarios a married couple can face is when a spouse dies and leaves the other spouse with huge medical debts. This is what happened to an Arizona couple (mentioned in the New Yorker article), who got married and decided to get a prenup when they learned the husband had a terminal illness. This is the worst-case scenario, but it could be a reality for Massachusetts married couples. In Massachusetts, debts are often presumed to be the responsibility of the deceased spouse, except medical debts. Rather than leaving a grieving spouse to deal with huge medical debts, a prenup can shield one spouse from these debts.

Debt and Divorce

The more common scenario is that one spouse brings debt into the marriage, such as student loans or credit card debt. When the couple gets married, they agree that if they ever get a divorce, they will shoulder these debts individually. As you can imagine, this is a gesture that may actually be welcomed by the other spouse. It is a decision that is born out of respect and can even strengthen a marriage. It avoids the consequences of fighting over these debts if a couple gets a divorce. 

Another thing to consider is that it is not always clear who is responsible for debt in a Massachusetts divorce, particularly if the loan, such as a student loan or credit card debt, was used to pay for marital expenses. Making a prenup helps to clarify how you will both take responsibility for any debt you bring into the marriage. 

Far from being a marriage deal-breaker, a prenup can be a marriage dealmaker. Spouses-to-be who address financial issues using a prenup may find their marriages stronger for confronting tough issues like debt. If you are getting married and want to make a prenup, you should consult with an experienced Massachusetts divorce attorney who can help you draft the prenup properly, as carefully drafted prenups are more likely to be accepted by the courts in the event of a divorce.

If you are looking for assistance with a prenuptial agreement then please talk with our attorneys for an initial consultation, please call us at 617-539-1010 ext. 111 or contact us via email now.

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