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.
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.
You can protect and/or the divide the following assets within a legal prenup/cohab agreement:
Also, any separate and joint liabilities can be covered within the agreement.
* The only thing that cannot be included in a prenuptial agreement is child custody and child support.
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 occured 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.
We at DivorceEZ prepare legal prenuptial agreements and legal cohabitation agreements in Alberta, and we strongly recommend couples to complete a prenup/cohab agreement in order to protect their wealth.
Also, they should be aware of protecting themselves against each others liabilities as it is very common for Canadian’s to carry a high level of debt.