As fall creeps in and Halloween grows nearer, we’ll write about something scary in the spirit of the season: What happens if you get divorced without having entered into a prenuptial agreement before getting married? The thought of a marriage without a prenup is scarier than a haunted house, a haunted hayride, a ghoulish costume, or any of the season’s other spooky elements. Be warned: The surprise of someone in a monster costume jumping out at you unexpectedly is pretty tame compared to the shock of finding out how your assets would be divided by a court if you ever get divorced without a prenup.
Getting married without a prenup is akin to asking “trick or treat?” except, in this case, you’re not guaranteed to receive a treat–you might just get tricked…into putting yourself in a position in which you feel short-changed by your state’s default divorce laws. Below I’ll explain the alarming details of what can happen if you make this mistake.
Divorce proceedings can turn really ugly when there’s no prenup in place to guide who gets what. A prenup helps you iron all that out in advance when you still like each other and are emotionally able and willing to come up with a contingency plan that meets both of your needs and is fair and balanced. Without a prenup, getting divorced could mean more fighting, mismatched expectations about what ‘fair’ means, and feeling emotionally flooded and unable to be reasonable. All of that dispute usually translates to the lawyers getting much richer and you getting much poorer (in addition to potentially losing some assets to your ex, as well).
Don’t do this to your future self. I hope you’ll never get divorced, but the fact of the matter is that almost 50% of couples do. Seeing what you may become when faced with a relationship breakdown without a contingency plan might be pretty horrifying.
Everyone wants to believe that when they get married, they won’t ever worry about the prospect of divorcing because it simply won’t be a possibility for them. However, we’ve all seen the divorce rates, and we know that divorce does indeed become a reality for a large percentage of couples. This is simply the world that we live in. With divorce all around us, it’s normal to occasionally have a little nagging voice in the back of your head asking, “but…what if it doesn’t work out?”
Here’s the thing about those nagging little voices: They love to ask annoying questions, and they get a lot louder when we don’t provide them with an answer. They don’t do very well with uncertainty. A prenup does just that: in addition to outlining financial roles and expectations during the marriage, it also acts as a contingency plan that outlines what will happen and how assets will be allocated in case of divorce. Getting all that down in writing and made official can go a long way toward calming that nagging voice because it eliminates a good chunk of uncertainty around what would happen if things went south.
A prenup also eliminates some of the uncertainty that comes up during divorce proceedings. Couples who marry without a prenup and later divorce have little idea what the judge is going to decide, and divorce can take a long time. That means a long period of uncertainty about what the heck is going to happen. Experiencing that kind of prolonged uncertainty about your financial future is a great way to raise your blood pressure and lose sleep. If that sounds like fun to you, definitely don’t get a prenup.
We want to pause here to point out that getting a prenup does not mean you’re planning for divorce. That’s a common misunderstanding. You know how when you stay in a hotel room, there’s always a map taped to the door showing where the emergency exits are and the evacuation plan in case of fire? When you see that map, do you think, “well shoot, I guess that means there’s going to be a fire”? No? It’s the same with a prenup. Just like that map, it’s a good thing to have–just in case. However, it doesn’t mean you’re expecting a divorce any more than you’re expecting a fire. It just means you’re preparing yourselves for all possible outcomes because you’re rational, intelligent people who recognize the importance of contingency planning.
You might find yourself responsible for your ex-partner’s debt
Yep, that’s right. Depending on your state’s divorce laws, debt you don’t consider yours might not be viewed the same way under state law. The commingling of your various assets and the financial decisions you make as you build your lives together can make things pretty complicated to untangle in the event of divorce without a prenup, and some people actually do end up paying some debt incurred by an ex as a result of a decision handed down by the court. How exactly this can happen is a big topic for another article, but for now, the important thing to know is that it can happen. A well-thought-out prenup that addresses debt can eliminate some or all of that risk, though.
You could lose your house
Maybe you bought the house together, and the court decides it’s fairer if it goes to your partner. Maybe your partner technically bought the house, but you’ve lived in it for a long time and have contributed untold hours and an abundance of care to making it a home. Whatever the case, the judge will decide what happens to the house.
“But what if we buy a house after we’ve already signed a prenup?” you may be asking. Well, one important thing to note here is that it is possible to add stipulations for a new property to an existing prenup. Many people think that a prenup is something that you sign once and then never look at again–and sometimes it is. However, the beauty of a prenup is that it’s there to serve you and exists in a form that is customized based on what is best for your particular relationship and your needs as a couple.
If you buy a home together during your marriage, how is it owned? Well, think of it this way. The money that is being used to buy the home comes from somewhere. Is it coming from your separate property, in which case you have a right to reimbursement? Is it coming from your Daddy Warbucks, in which case it is a gift and subject to the gift provisions of your prenup? Is it coming from a joint bank account with your honey, in which case it is already marital or community money?
However, if you get divorced one day, and you don’t have a prenup, the court is going to decide who gets the house. And it might not be you. And it might have to be sold. And that might be a rather unwelcome surprise.
You might be left with insufficient financial support
Maybe at some point, you’re going to step back from your career in order to take care of kids. Maybe you’ve already done that. Or maybe when you got married, you had an agreement in which you worked less, cooked, cared for the house, and contributed to the marriage in other ways instead of bringing in a salary. And maybe either of those decisions above could mean that if you ever divorce, you wouldn’t be able to afford a fancy-schmancy expensive lawyer. And maybe your spouse would be able to afford such a lawyer. Maybe their lawyer would be skilled enough to build a case that would result in you not receiving as much alimony as you think is fair. Maybe, even if the judge orders full child support and alimony to the greatest extent under the law, it still means a dramatic shift in your lifestyle. There are a lot of ‘maybes’ here, and that’s the whole point–if you get a prenup, you can include stipulations for how much assets, money, etc., is to be paid to whom in the event of divorce and on what schedule. That eliminates most of these ‘maybes.’
Your partner could receive some of your inheritance
Let’s say that you inherit a house from your great-aunt Marge. But then a few years later…you get divorced. You tell the judge that it’s your house; you inherited it, for goodness’ sake! The judge is like, “nah bro, you inherited it during the marriage, so this here house is marital property!” If you had a prenup, we would not be having this conversation because your inheritance would be listed as Separate Property.
Or, perhaps rather than a house, Marge gifts you $100,000. You put it into your personal checking account because why not. But a few years later, you decide to get divorced. The judge may view that $100,000, too, as marital or community property since it was received during your marriage. Oops.
There are also a few other ways your inheritance can end up in an ex-spouse’s pocket, but we’ll spare you the details for now and leave you with this word of warning: Get a prenup!
If nothing I’ve shared above seems like your cup of tea, I hope you’ll consider opting for a prenup. Doing so helps you cover all your bases so that you can rest easy knowing that you have a solid contingency plan in place. The process of drafting a prenup also helps couples learn to negotiate with one another, set boundaries, and clarify expectations around finances. Convinced but scared to have ‘the prenup talk’? Here’s how to bring up a prenup without upsetting your partner. HelloPrenup can help you with a prenup. Find out how it works today!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: [email protected]