Why Prenups Have Clear Rules About Debt and Separate Property in Marriage

Under default California law, anything earned during marriage is presumed to be community property. Debts incurred during marriage are also presumed to be shared. It’s easy to assume that if something is in your name, it stays yours. But once loans, shared income, or separate property come into play, things get complicated quickly.

In prenups and postnups, lawyers who specialize in this area include specific language about the use of credit, collateral, and separate property. Without that clarity, we find that couples can be confused about the rules and sometimes in court.

Here’s what that looks like in real life:

Using a loan to improve your own separate property doesn’t mean your spouse now owns part of it.

If someone takes out a loan during marriage in their own name to renovate a home they owed before marriage and uses earnings from work to pay it off, that doesn’t automatically make all of the home community property. Judges often look at what the lender expected when issuing the loan and what income stream was intended to pay it back. If community earnings were used, the loan may not be treated as separate.

Paying for repairs or taxes with joint money doesn’t make the property joint.

Community funds sometimes cover property taxes or maintenance on a separately owned home. That doesn’t turn the home into community property. But if things fall apart, people often feel entitled to equity based on how money was used. A prenup can clarify. 

Being an authorized user on a spouse’s credit card can create confusion about debt.

If one spouse opens a credit card in their name and adds the other as an authorized user, they may assume they are the only one responsible. But if the card is used for joint expenses, California law might treat the debt as community. A prenup can clarify that the cardholder takes responsibility or, alternatively, that the debt is shared. Either way, it’s better to be explicit.

These examples reflect real choices people make in marriage. Helping each other, blending finances, making things easier. But without clear agreements in place, those decisions can lead to misunderstandings and resentment.

These clauses do more than protect people legally. They reduce conflict. They make it easier to trust that decisions made in good faith won’t be misunderstood later. A good prenup just puts into writing what people already believe to be fair.