No-nups are useful in outlining up front who will keep certain assets and what will happen to assets that were purchased during the relationship, should they choose to end it. The agreement binds both parties.
By John Griffith, Family Lawyer
Perhaps it can be chalked up to the differences in goals and desires between the millennials and older generations, but the bottom line is that marriage rates are falling and cohabitation is on the rise.
Living together may make it easier to part ways when the relationship ends, but couples who go this route still acquire property and possessions. For that reason, it’s time those couples considered cohabitation agreements.
No-Nups
Most Americans are familiar with pre-nuptial and post-nuptial agreements. Pop culture is calling this new iteration the “no-nup.”
A cohabitation agreement is between two people who live together, and it provides protection from unnecessary costs and time spent in a courtroom should the relationship end. No-nups are helpful in identifying property rights, mutual financial support during the relationship or after a breakup, and childcare. They also can assign responsibility regarding debt following a breakup, as well as establish guardianship and the authority to make emergency medical decisions if one partner is incapacitated.
No-nups are useful in outlining up front who will keep certain assets and what will happen to assets that were purchased during the relationship, should they choose to end it. The agreement binds both parties.
What’s Different?
From a legal perspective, the difference between a cohabitation agreement and a prenuptial agreement, aside from being non-marital vs. marital agreements, is that a cohabitation agreement is a contract that effectively alters the respective rights of each party under civil law, while a prenuptial agreement alters the respective rights of each party under the family code. This distinction has ramifications concerning both the validity and enforceability of the respective agreements.
The validity of a pre-nuptial agreement can be attacked on many more grounds than that of a cohabitation agreement, as there are many perquisites required of a valid prenuptial agreement. For example, if a prenuptial agreement is not presented to the other party at least seven days before it is signed, then it is legally invalid for all purposes—bottom line. Also, if both parties are not represented by attorneys, then in a prenuptial agreement any agreement regarding financial support is invalid. A party seeking a valid cohabitation agreement need not be concerned with the stringent requirements of a valid prenuptial agreement. There is no seven-day period before signing and there are no requirements that both parties be represented by attorneys.
Defining how to handle property and financial issues when the relationship is stable helps your clients reach decisions and agreements in a logical, rather than emotional, manner.
A no-nup is recommended if one person in the relationship:
- Owns a great deal of assets or has a sizeable inheritance;
- Has accumulated a significant amount of debt;
- Left the workforce to raise children;
- Wishes to compensate their partner, who acts as a caregiver.
John Griffith is a partner at Griffith, Young & Lass Family Law, offering assistance and representation that guides their clients through the legal process and helps protect them and their families. www.www.gylfamilylawfirm.com
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