One of the things that I find (incredibly) nerdily interesting about my work is the concept of the character of property. In Washington, most property is either separate property or community property. (I’ll spare you the “quasi-community” property and the legal nuances that arise when parties move to/from a community property state from another state.)
Legally, there’s a presumption that what you acquired before marriage (either as an asset or debt) is your separate property or obligation. When you marry, or in certain cohabitation circumstances, the legal presumption changes and the law begins to think of folks as a financial team. Property that’s acquired is assumed to be community property; debt that’s acquired is presumed to be community debt; and the name that something is in is not the “last word” as to the character of the property. These ideas, “Community Property 101”, if you will are key concepts for my pre-nuptial, divorce, and estate planning clients, as the character of property determines where the financial focus is in a divorce and what you have control to give away in a will.
A line I’ll often throw out is this: “What’s mine is yours” is the opposite of the concept of separate property. If it’s “mine”–my separate property–then it’s likely going to stay mine unless there’s a clear indication that I wanted to change that. While “what’s mine is yours” may be a romantic notion, it’s not how the law sees it.
To that end, I thought that this piece on CNN Money was both clear and helpful. The piece is primarily a response to the question of “if I marry my boyfriend [will] his student loan debt [become] mine too”? The short answer is “No”. Debt acquired before marriage? That’s separate debt. The longer answer is very thoughtful, though, as there will be impacts on the marital community from the existence of the debt. In other words, while the debt is a separate debt, they’ll share its impact.