I have a weird/dumb question about annulment.
Nothing weird or dumb about it; lots of people misunderstand.
If you get an annulment, how does it define your former marriage?
It doesn’t. It defines the (putative) Sacrament itself. But the two of you were still living together.
If two people were married in the church, and then because of adultery or abuse or something they seek an annulment
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They’d lose. The decree of nullity is an official finding by the Church that the Sacrament of Matrimony was invalidly performed (or not performed at all). For example, the Church might find that one of the spouses was not free to marry (already married, under religious vows, too young to marry, under duress, etc.) and therefore did not validly perform the Sacrament. But the focus is on whether the Sacrament was validly performed at the time; adultery, etc. are basically irrelevant, because annulments are
not divorces. If you were validly married, then even the worst abuse afterward won’t undo that.
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and it’s granted, then does the declaration of annulment mean that they were living in sin?
Probably not. Sin requires intent. If you
thought you were validly married, then you weren’t sinning when you engaged in the marital act with the person you thought was your spouse. If you later find out that s/he was so insane at the time of the wedding that s/he couldn’t validly marry under canon law, then either of you can seek a decree of nullity; but neither of you sinned.
On the other hand, if you go through the Sacrament of Matrimony concealing the fact that you’ve already validly married someone else in the Church, then your second (putative) marriage is invalid; and either of you can seek a decree of nullity; and you sinned but your putative spouse did not.
Does annulment mean that you were never married?
That’s exactly what it means: the Sacrament of Matrimony, for whatever reason, did not validly take place.