Prenuptial & Cohabitation Agreement
What is a pre-nup/cohab agreement?
A prenup/cohab agreement is a legally binding contract that determines how assets and liabilities are divided and protected in case of a relationship breakdown.
These agreements are a form of protection made between the parties to set the terms, conditions and responsibilities of each individual at the time the relationship ceases.
The idea of obtaining a legal prenup/cohab agreement is to anticipate the financial outcomes with a clear state of mind and be fully prepared ahead of time, rather than leaving it to be dealt with at the time of separation.
What is the difference of a pre-nup & cohab agreement?
- A pre-nup is for married & plan to be married couples.
- A cohab agreement is made for common-law couples who do not plan to marry.
What can be mentioned/go in a pre-nup & cohab agreement?
You can protect and/or the divide the following assets within a legal prenup/cohab agreement:
- Separate and joint property;
- business interests;
- anticipated family inheritance;
- potential spousal support claims;
- life insurance policies;
- pensions;
- cash/savings;
- investments;
Also, any separate and joint liabilities can be covered within the agreement.
* The only thing that cannot be included in a prenuptial/cohabitation agreement is child custody, parenting arrangements and child support.
Why the need?
Adults are starting to really rise their financial achievements and the longer they wait to cohabitate, the more time they have to accumulate assets that need protection in case of a relationship collapse. While individuals are increasing their net worth, a prenup/cohab agreement becomes a security factor for couples when entering into a relationship where an individual owns a business, property, inheritance or have even incurred some debt.
When individuals have children from previous relationships, a prenup/cohab agreement also enforces the protection and inheritance of assets for the children.
While nobody plans to divorce, it has become such a common scenario now that most look at a pre-nup as a safeguard from the possible aftermath of a messy divorce, and the time and money it may cost to settle and divide the assets.