Considerations Before Popping the Question: What the Law Has to Say and What You Should Know

Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives.

The state where you reside shapes and defines what marriage is and what it means for you and your fiancée through its laws and licensing requirements. Because these laws and requirements govern very intimate aspects of our lives, they can be emotionally and financially significant. This discussion sets forth several legal considerations to keep in mind as you travel towards the big day.

Living Together Before Marriage

On December 14, 2011, the Pew Research Center released a report concluding that the number of young adults waiting to get married is on the rise. The study also concluded that cohabitation has risen to its highest level in decades. Cohabitation has its benefits; however, it can also have drawbacks.

In the state of Missouri, simply living together does not affect any property either of you own. Upon break up, you are each entitled to your own property. The situation becomes more complicated when you begin purchasing real estate or personal property together or if you pay off each other’s financial obligations. Depending upon the circumstances, a court may require one party to compensate the other. Paying for your share of the fifty dollar rug you purchased together is one thing, but what about your share of that car? Or the house?

Plan on moving to another state? In some states, merely living together can have great implications. Depending on where you live, who you live with, and how you present yourself, you might find it interesting that in the eyes of the state, you might already be characterized as married. Known as a “common-law marriage” and contracted in a handful of states, this type of marriage carries with it the same rights, responsibilities and obligations of a traditional marriage, including those in divorce.

Who Gets the Ring?

You’re a huge Cardinals fan. You find out she has been hiding from you that she is a dyed-in-the-wool Cubs fan and don’t think you can ever forgive her. The engagement is off. Now what? What about that ring you saved for months to buy her?

The answer will vary depending on the circumstances and where you live, but most courts agree the ring is a conditional gift. It is conditioned upon marriage. That is, when you finally get married, the gift is completed. If the engagement fails before the marriage, the gift fails and the ring should be returned.

What about the necklace, the earrings, that country mix-tape, and other things you gave him/her? Those are gifts, just gifts. They are not conditional upon marriage. Unless you got down on one knee and offered these things when you proposed, you are probably going to lose this argument.

For Richer or Poorer, For Better or Worse…

Whether you owe thousands in student loan debt, came into an inheritance, or are a millionaire, marriage may have significant implications for your wallet. Although this discussion is focused mainly upon considerations before marriage and not those during and thereafter, a little forethought here can go a long way in the event your marriage later goes south.

Debt. Whether you will be responsible for your spouse’s debt varies depending upon the type of debt, when it was incurred, where you live, and several other factors. In some states you will be liable for all debts incurred by your spouse during marriage, even if you did not agree with the purchase/spending. In other states, you will not. Accordingly, it may be advisable to have a conversation with your fiancée as to his/her current and desired spending habits. What about student loans? In most cases, debt incurred before marriage without your spouse’s signature will not become his/her obligation.

Prenuptial Agreement. What’s mine is yours becomes a reality after marriage. If you have built or are building a business and would like to keep that separate in the event you later divorce, consider a prenuptial agreement. A prenuptial agreement between you and your fiancée can help alleviate some of the contentious battling after marriage by providing for clear and concise contingencies with regard to each party’s property/assets. It may also be helpful for those with children from a prior marriage or those simply wanting to protect their wealth. From a practical standpoint, this may not be the easiest conversation to have with your fiancée, but remember that the alternative may be far more unsettling.

Same-Sex Relationships

Some states have legalized same-sex marriages so that same-sex marriages carry with them the same obligations and ramifications as opposite-sex marriages. Other states do not recognize same-sex marriages, but do recognize civil unions or some other equivalent. It is important to remember that these may not be equal. While civil unions may provide same-sex couples with many of the same benefits as marriage, restrictions still may exist depending on the actual language of the statute and policy of the state. Accordingly, and because this is a fluid issue, it is especially important for same-sex couples to learn exactly what the state’s position is and how this will affect other issues, such as estate planning and child custody.

One Last Thought

As a throwback to my first post on why you need estate planning even at your young age, note that marriage will have a substantial impact on any of your existing estate documents. After marriage, your spouse may have certain and specific rights over you and your possessions even if your documents had previously said otherwise. Consequently, it is important to revisit these documents and plan for changes.

Next Month’s Topic: So You Want to Buy a House?