Anyone can have a Cohabitation or Prenuptial Agreement. The reality is that relationship separation can happen to any couple. One goal of an agreement is to settle, in advance, what will happen to property division if that break up does happen. It is financial planning.
It is important to know how property may be divided without an agreement; and then what an agreement can offer to you and your partner.
A common example is “exemptions” or pre-owned/inherited assets. While the default law does offer some protections, these protections can be lost or eroded. Agreements often cover this topic.
Why do people get a cohabitation or prenuptial agreement?
There are many different motivations to looking into these types of agreements. Often, we see couples who have been previously divorced and want to be very clear on the finances in their new relationship. Perhaps for a narrow issue: who will keep a particular home (and will the other be “bought out”?). Or more broadly, which assets will be shared, and which will not be; or, to protect specific assets (or protect from specific debts).
Sometimes the motivation is for estate planning (to balance assets for children of prior relationships with provisions for the current spouse).
Couples often talk about wills, estates, insurance, children’s education funds, retirement, mortgages, and debt. A cohabitation or prenuptial agreement can be part of those fulsome financial planning discussions.
When and How?
The earlier the better! The process generally involves sharing financial information (net worth, incomes, etc); learning about the law without an agreement; and then building an agreement that meets each person’s needs, interests and goals. Each person has their own lawyer. The agreement must be fair to both parties, of course.
If you want to know if a prenup or cohabitation agreement is right for you, contact us to speak with Ceri or another one of our experienced family lawyers.
– Written by Ceri Chwieros