The Difference Between Cohabitation and Prenuptial Agreements

In an effort to work closely with clients, it is important to understand not only what problems may be going on at present, but it is also essential for your attorney to look forward and anticipate future problems. This is precisely why more and more parties seem to be entering into prenuptial agreements.

What is a Prenuptial Agreement?

What a prenuptial agreement does, if drafted effectively, is project into the future, identifying the issues that may arise in the event that newlyweds do not live happily ever after. These types of agreements also help parties live together happily, ameliorating some of the stresses that married life brings up. Prenuptial agreements set financial limits, which are mutually agreed upon by the parties, and give the parties guidance on financial issues, which is incidentally one of the more stressful factors, especially for newlyweds.

How The Cohabitation Agreement Differs

Similar to prenuptial agreements are cohabitation agreements. This type of agreement applies to parties that live together but are not married. Occasionally, these agreements are written to state that it is the parties’ intent to NEVER get married, but that they will reside together and share expenses in this way or that way. Other times, cohabitation agreements will be drafted with the parties’ intent to not co-mingle financial affairs, but again, with the intent that the parties reduce the stress related to financial issues, and therefore, increasing the probability of a successful relationship. Either way, the parties are entering into a contract that helps show the parties’ intent, in regards to their relationship, and either way, the agreement is enforceable.

It is interesting that we have two types of contractual agreements, prenuptial agreements and cohabitation agreements, which appear to be so similar, yet the purposes of the documents are so different. A prenuptial agreement is an agreement to enter into a marriage, and a cohabitation agreement is an agreement to not enter into a marriage.

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