When your fiancé or fiancée has student loan debt, it’s even more important to get a prenup in place before you get married. Read our blog to find out why.
A prenuptial agreement or prenup is a contract between two people who are engaged to be married. This is an important document to have in place to protect both parties. Richmond Tymchuk Family Law recommends that in all cases of couples cohabiting or planning to marry, the couple should protect themselves with either a cohabitation agreement or prenuptial agreement. In particular, where one party has a student loan debt, a prenup is even more important for the following reasons:
Avoid surprise debt
You’re engaged and making wedding plans when you learn your fiancée or fiancé has a student loan or other debt. How will this affect your financial future?
A prenup isn’t just about the assets you bring to the relationship, but also about the debt. If you get married without a prenup, this student loan debt, or any debt each of you hold, may become a joint responsibility. Should any part of your relationship not go as planned, looming financial responsibilities can bring resentment into the marriage. Outstanding debt might not be something you want to take responsibility for, so a prenuptial agreement can be an effective way of communicating who is responsible for what financial obligations in the relationship.
Laurie J. Tymchuk adds: “The court has discretion to take pre-marital debt paid off during the marriage into account in the just and equitable division of property. There is no legislated mandate though, and it is a discretionary remedy. So we would always recommend having a prenup in place to give certainty.”
Discussing all your finances before the marriage
While getting engaged is a happy and joyful time, it’s important to be pragmatic. Somewhere between 30-40% of marriages in Canada end in divorce. Rather than squabbling over assets and debts at the end of the marriage when the relationship might be strained, it’s better to have frank and open discussions about your financial obligations before you get married.
This also helps set the foundation for a strong marriage because you’ll have both laid it all out in front of each other in open communication. Discussing your assets and debts may feel uncomfortable for some couples, but you’ll be entering into a marriage with a clear plan, thus if things do turn out unexpectedly, your financial future will be better protected.
Protect your partner
If you’re the one with financial debt, you’ll probably want to avoid putting an additional financial burden on your partner (and potentially child or step-child dynamics to consider). Writing a prenup to specify that the debt is yours alone will help alleviate this.
Deciding to get a prenup can feel like a cloud over your marriage plans, however instead see it as a valuable investment in your future together. You might never even need to apply the prenup, but at least you’ve had open and honest conversations about your finances and your future. If you need more information, check out our blog post 10 Reasons You Need a Prenup.
Reach out to us today to arrange a consultation to discuss your prenup and student debt obligations. We can arrange consultations over the phone, FaceTime and Zoom, and are always happy to help with your family’s legal needs.