Debate about the meaning of marriage has been pretty common recently. Regardless of what you think marriage should or should not be, you need to be aware the law views it as an economic partnership. As with a business partnership, spouses have certain rights with respect to each other’s property. Marriage does not necessarily mean spouses own each other’s property.

While we all hope our marriage will be different and last a lifetime, statistics show differently. Nationally, about 50 percent of marriages result in divorce. Those planning marriage should consider what rights their future spouses may have if they divorce.

Upon divorce, a court may award a spouse alimony, child support and assets owned by either spouse during the marriage. Gifts and inheritances generally are excluded from the calculation, but a spouse must be careful not to mix inherited assets with marital assets or risk losing them in divorce.

Surviving spouses 

Marriages that don’t end in divorce are over when a spouse dies. When someone dies without a will, his or her spouse is entitled to half the resulting estate. If the deceased spouse leaves a will that the surviving spouse doesn’t like, the survivor can set it aside and take half the estate.

Furthermore, if the dead spouse gave assets away during a lifetime, the surviving spouse may be able to set the gifts aside and force the beneficiaries to return half the value. The survivor is also entitled to the first $15,000 of value of a dead spouse’s personal estate and gets to decide which items to include in the $15,000.

Spousal obligations, rights

A person usually is not liable for spousal debts unless he or she signs a promissory note or is jointly listed on a credit card. Also, an antiquated Kentucky law says a husband may be responsible for paying necessary costs of his wife’s clothing, food and shelter. The law does not address a wife’s responsibility for those same costs.

Although a person has various rights regarding spousal property upon divorce, death and for necessary expenses, he or she generally doesn’t own that property. For example, a husband has no right to access money in his wife’s account unless he is a joint account holder or has authority to use the account. A wife’s insurance company won’t provide any of her policy information to her husband, and he doesn’t co-own the policies. However, if a husband names his wife as his attorney-in-fact under a durable power of attorney, she can access all his bank accounts and other assets.

Get it in writing

If you are concerned about your future spouse’s rights to your property, or are considering a second marriage, you should think about a prenuptial agreement. It is a joint agreement prior to marriage that should at least address property rights in the event of death or divorce. The document can also address debt allocation between spouses as well as their rights in each other’s property during marriage. Before signing, they should obtain separate lawyers to review the prenuptial agreement and advise them regarding its effect.

If it’s too late for a prenuptial but you and your spouse want to change or clarify your rights in each other’s property, you can enter a postnuptial agreement, which is generally the same as a prenuptial.

If you have a prenuptial, it is a good idea to review it periodically to determine if it addresses your specific concerns. If not, you should consider having it amended or entering into a postnuptial agreement. Even if the prenuptial addresses all your concerns and contains all the relevant language, it will be of little or no value if you and your spouse mix assets by sharing bank accounts or paying each other’s bills.

Bottom line

Remember that in the eyes of the law, marriage is an economic partnership, so spouses have certain rights in each other’s property. If you don’t view marriage as the law does or are uncomfortable with the rights given to a spouse, consider changing the rules with a prenuptial or postnuptial agreement.

As a courtesy to your future spouse, please don’t wait until the night before your wedding to bring up the idea.

 

Printed in Four Rivers Business Journal (Paducah Sun), May 2010.