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Prenuptial Agreements for Cohabitants

This article was written by in Family and Life. 12 comments.


I’ve discussed whether couples should sign a prenuptial agreement before marraige recently. A good prenup can protect both individuals in the couple if a marriage were to result in irreconcilable differences.

Signing a legal document of this type could be helpful if the couple owns substantial assets or if there is a wide disparity in income or wealth between the two members of the couple. If either or both of the individuals own businesses, a prenup could protect those businesses, not to mention the lives of any employees relying on those businesses.

Relationships coupleMore people are looking for the protections of a prenuptial agreement without the benefits of getting married. Marriage is becoming a less popular option for couples today, with only 51 percent of adults taking the plunge according to CNN. Couples are increasingly choosing to live together and share their lives without tying the knot.

Cohabitation can cause legal problems the same way marriage can, particularly if the relationship ends.

A growing number of unmarried couples are seeking similar legal protections through cohabitation agreements. These legally-binding contracts, which are drawn up by an attorney, protect each person’s assets, address child custody issues and determine support obligations, much like prenuptial agreements do.

Cohabitation, in the cases where assets need to be protected, is more than just having a roommate. Often, a couple may decide to have children despite not being married, and this leads to questions about caring for children if the relationship were to dissolve. While one might assume that cohabitation is an option only for couples that cannot legally marry in their state, but 70 percent of the divorce attorneys surveyed by the American Academy of Matrimonial Lawyers say most of the new cohabitation agreements they’ve seen are signed by heterosexual couples who could be married if they choose to be.

Buying a house together can be dangerous for an unmarried couple. Most states don’t have laws covering this situation, like they do for married couples. A cohabitation agreement can define how the house and its mortgage are treated in the event of a termination of the relationship.

I might say that a cohabitation agreement for a couple not intending to get married is even more important than a prenuptial agreement for a married couple. In some cases, but not all, the risk of the relationship ending is higher without the bond of matrimony.

Do you believe these cohabitation agreements are necessary? Would you sign one?

Photo: Dragunsk
CNN

Published or updated March 22, 2012. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 12 comments… read them below or add one }

avatar Cherleen @ My Personal Finance Journey

For my own protection and my family’s, I will agree with cohabitation agreement. If one can go for a prenuptial agreement, why not a cohabitation agreement then? I do not see anything wrong with it, especially if you have children or future children to protect and consider.

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avatar Ceecee ♦53 (Newbie)

I’d sign one. I’ve seen a lot of problems arise when these homes are broken up. A lot of these relationships last longer than marriages, and things are purchased jointly. Not a bad idea.

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avatar Modest Money

It’s not surprising that more couples are going this route. These days common law couples who live together are treated as if they are married in many regards. So it would make sense that in many of those cases, couples would want to protect their assets and figure out what they want to do with things like kids, pets, jointly held assets, etc.

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avatar DonnaFreedman ♦80 (Newbie)

I’d insist on one. It isn’t just that the relationship might end — if you or your partner dies, the legal hassles could be considerable.
If/when I decide to live with someone again, it will be with the understanding that my belongings, cash and life insurance go to my daughter. What he has goes to his kids, if he has any, or to the heirs of his choosing.
I’m no lawyer so I’d definitely consult one to iron out the finer points.

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avatar Luke Landes ♦127,485 (Platinum)

And if the opposite situation were warranted, where the surviving member of the unmarried couple is to inherit the belongings but there’s no will, he or she wouldn’t be able to avoid probate like a widow(er) would, at least in some states. From what I understand, dealing with probate is one of the most difficult legal hurdles to get through.

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avatar Jenna, Adaptu Community Manager

Personally, if I’m going to live with someone, have children with them and want to protect my assets and health I’ll just go ahead and marry the person.

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avatar Yana

I tend to agree with Jenna. If I didn’t want a legal contract, I’d just live with the person casually – and I did just that for 5+ years before getting married. Marriage was getting legal.

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avatar qixx ♦1,890 (Half-Dollar)

I would not support a cohabitation agreement. Like with a prenup i feel this type of arrangement is just planning for failure. The standard claim is that 50% of marriages end in divorce and divorce rates are higher in couples that sign prenups (85% within 15 years according to a Fred Cuellar study). While i did not find similar data on cohabitation i’d expect the results are similar.

Plan for failure and it is likely to happen. That said i have seen some prenups that limit the terms of divorce to things such as abuse, adultery, etc. These types of prenups seem like they should decrease divorce rates.

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avatar OuterSpaceGuy

I live in a community property state, so…. Remind me not to date you.

Wow.

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avatar csdx

The thing is though if in just about any other field if you didn’t plan for failure, you’d be called crazy. Would you prefer if an engineer didn’t plan for failures in your airplane, or would you prefer to have no emergency fund for any unexpected ‘failures’, maybe the president shouldn’t plan on diplomatic talks failing with Iran? Planning for failure is good because it can mitigate the harm if an event were to occur, and often in many marriages the fallout affects their children much more than the couple.

I think though you’re right if there is an easier ‘out’ then people are likely to take it. So I’d not deny that having prenups may make people to exit a relationship they otherwise might not have, or might not have been able to. But that’s not necessarily bad. Divorce used to be illegal, even in cases when there was abuse or adulty, so while legalizing it did allow couples to seperate easier, I don’t think you can state that as a categorical negative. Someone staying in an abusive relationship, while a point for the ‘lower divorce rate’ side, isn’t something I think of as a good thing. Also even in other situations, the analogy is either building up pressure in a pot until it explodes, or having a release valve to dissipate the issue before it blows. It’s much better to have a clean and easy seperation than picking up the pieces of something you left stewing for too long.

The idea of ‘marriage is forever’ is part of our culture, but that doesn’t mean that it is the best way of doing things. Even recently the one job/employer for life idea was part of our narrative. Yet we’ve changed such that people hold several jobs now, and usually in different fields. Was that union/pension system of old categorically the best way of working, or are the benefits to this new way of working as well? Things change, and different doesn’t mean worse.

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avatar shellye ♦107 (Cent)

I would insist on a prenup for living together, as I would for marriage. I see a prenup as a kind of insurance; buying health insurance doesn’t mean you plan to fail your body and get sick or hurt, and an agreement stating who gets what when the relationship goes south is another type of insurance to protect yourself when your thoughts and judgment may be clouded by a broken heart, or an ex’s scorched earth policy.

Not sure if I agree that having a prenup increases a couple’s likelihood of breaking up or divorcing if they’re married. I think our society’s lack of committment to the ideals of marriage as a whole.

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avatar Carrie Smith

As someone who has got married at 24 and divorced 3 years later, I would definitely sign a cohabitation prenup. I don’t think it’s “planning for failure” at all. I planned for my marriage to succeed and it still didn’t work out. And I got burned in the process. To avoid that happening again, I will be more cautious and thoughtful in the future. I do however, agree with Jenna, if the relationship is that serious and I’m planning to have kids with this person, I’d go ahead and marry them. It provides a little more security.

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