10 Reasons Why It is Important to Have a Prenuptial or Cohabitation Agreement

While not the most romantic of topics, prenuptial and cohabitation agreements have become increasingly important for couples planning to marry or live together. No longer only for the rich and famous, prenuptial agreements provide significant benefits for any couple--both for the financial well-being of the individuals and overall well-being of the relationship.

And with the current trend toward cohabitation and away from marriage, cohabitation agreements have become even more important. The common thinking is that cohabitation, rather than marriage, keeps things more simple--especially in the event of a divorce. But the truth is that these types of arrangements still bring about serious legal consequences: property issues, the risk of palimony lawsuits, or custody and child support issues. It is important to consider all of these consequences, and do what planning you can to avoid complications in advance of living together, whether the relationship turns into a marriage or not.

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Writing A Prenup Will Help You Learn About Each Other

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The discussion of such an agreement often enables both parties to learn key things about the other: Each other's view of money, knowledge about each other's assets and debts, and money management skills. So often therapists and family law attorneys encounter people who are in a bad situation because they didn't know what they needed to know about the other person. People caught up in the romance aspects of the relationship, or who get busy with daily life, often fail to have discussions about money. Disputes over money are one of the most frequent causes of break-ups. Putting the information on the table before making a long-term commitment helps people become educated about their future partners, how they handle financial issues, and can lead to an open discussion about how to address these issues before the relationship progresses and one person realizes that they cannot handle how the other person deals with money.

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The discussion of such an agreement often enables both parties to learn key things about the other: Each other's view of money, knowledge about each other's assets and debts, and money management skills. So often therapists and family law attorneys encounter people who are in a bad situation because they didn't know what they needed to know about the other person. People caught up in the romance aspects of the relationship, or who get busy with daily life, often fail to have discussions about money. Disputes over money are one of the most frequent causes of break-ups. Putting the information on the table before making a long-term commitment helps people become educated about their future partners, how they handle financial issues, and can lead to an open discussion about how to address these issues before the relationship progresses and one person realizes that they cannot handle how the other person deals with money.

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Comments

[King Cashaw]

03:57 PM on 04/26/2011

When my parents divorced, my father took his stereo, sweet little set up with a reel to reel, and records. He paid all the debts. Minus the stereo, my mother got everything. Not sure dad even cared, but no worries, he has done quite well. If my wife and I split, I get my cameras, stereo,and computer. The rest is hers.

[DOLTexas]

04:00 PM on 04/14/2011

Cohabitees have a choice. if they want the rights afforded to married couples if the marriage breaks down then there is a remedy it's called getting married. If they then want to protect their assets in the future by all means get a pre nup.

[Robert Pope]

08:46 PM on 04/11/2011

Nobody marries someone who they think will screw them over and leave them, Bad behaviors are overlooked during the honeymoon period of the relationship. It would be refreshing if prenups were the norm and rolled into some sort of course needed to obtain your marriage license! That way no one would be offended that they were asked to sign one, and everyone's eyes would be open to all the pros and cons of marriage.

[GTWiecz]

05:12 PM on 04/01/2011

Probably written by lawyers. Prenups should be used in a small number of cases, when one person has a lot more assets prior to the marriage. I've noticed that those who have prenups and have separate finances fight a lot more about money (who paid for what, who is saving more, who can afford this or that) than couples that mingle assets, income and save together, building for the future. Notwithstanding that they feel less married, less bonded and there is less a sense of teamwork. If you don't like to share, just don't get married. Don't trust the other person? Don't get married. Think they are going to rack up credit card debt? Don't get married. Just don't marry anyone who is not responsible, and that you can see by how they conduct their lives.

Futhermore, courts these days are very fair. Short marriages without prenups usually end up with each person leaving with what they brought to the marriage. Marriage is a partnership. If you don't want to grow together and build together, and all you think of is preserving what's yours, just date.

[GTWiecz]

05:16 PM on 04/01/2011

Why do kids assume they have the right to the parents' money? Individuals should leave their money to whoever they wish, be it a charity, a spouse, their kids or a cause.

[Shrank]

04:28 AM on 04/01/2011

Reason No. 11: You are planning to marry Newt Gingrich.

[h0tr0d]

10:58 AM on 03/31/2011

If your a high earning man, a prenup should be a no brainer. Marriage is a contract enforced by the government to equally share financial assets without regard to financial contribution.

[GTWiecz]

05:28 PM on 04/01/2011

In a marriage both contribute in different ways. Most women work today, inside and outside the house. The no brainer in this case is that if a marriage did not work out, split your assets in half and go on with your life. You'd be surprised at how we can live without a lot less, and even happier. The mansion does not happiness guarantee.

Don't want to share what you make in any way with a woman? Marry an accomplished woman or just stay single. Simple.

[h0tr0d]

08:23 AM on 04/02/2011

I'd rather have a simple contractual agreement that states you get out what you put in. Not sure why anyone wouldnt agree with that. A mansion is not my lifestyle, but for someone who has one of those, it would be even more important. I have no problem sharing with my wife, the point is not having to share with a bitter ex-wife.

[Venicelady]

11:19 AM on 04/03/2011

And, if you're a high earning woman, a pre-nup is equally important.

[Laurie Israel]

06:30 AM on 03/31/2011

Prenups are not (in general) marriage protection pills. Because they are generally negotiated out of ignorance (who, getting married for the first time, knows what marriage really is?), usually unfair to one party or another (otherwise, why have one?), and give the newlyweds a lifetime of memories of what is essentially sometimes fairly nasty negotiations that settle the terms of a divorce right before their marriage (fun, right?), prenups likely cut the success rate of a longterm marriage from 50% to much less, and can hurt the quality of a marriage even for the ones that survive the prenup. Why tamper with the laws of property and divorce? They were established during the course of many centuries to provide fair results under all types of factual circumstances that may develop during the course of a marriage. Perhaps better not to have a prenup, rely on the law to provide a fair result if you divorce, and get in there and make your marriage work. After all, at the outset, you love each other, right? Build on that, not a "fail-safe" exit strategy. In marriage, as in other areas of life, the adage "no risk, no gain" might be appropriate.

[Robert Pope]

08:35 PM on 04/11/2011

can you point me to a statistic backing up your claim (that marriage's with prenups are less successful?)

Thanks

[Clarabell]

06:02 PM on 03/30/2011

The problem with marriage licenses -- is that they are a "contract" with blank pages. :-) Not many people realize the ramifications of getting married.

[bmora]

05:52 PM on 03/30/2011

Translation: Please join me in financing my Porsche payment. Thank you.

[King Cashaw]

03:59 PM on 04/26/2011

lol!

[dangar05]

05:46 PM on 03/30/2011

If the contract of marriage was upheld, this would not be as much of an issue. The problem is that "no fault" divorce doesn't hold anyone responsible. It is a contract. I have to get it "approved" by the goverment. To get out of this contract, I have to hire a lawyer. But the courts have decided to not hold anyone responsible for thier actions. If I cancel my cell phone while in contract then I have to deal with the ramifications of that, usually in the form of a cancelation fee. If a husband or wife go on a cheating spree, then just business as usual. In fact, if the wife gets pregnant by another guy, you CAN'T divorce her and you have to continue healthcare for her while she carries this other mans child and then you have to prove to the court (more money) that this child is not yours. One of these days men are going to get fed up with the sexism in family court.

[ProudNeoCon]

05:28 PM on 03/30/2011

If I can not trust my wife, why should I marry her

[h0tr0d]

10:59 AM on 03/31/2011

Because people change.

[Venicelady]

11:41 AM on 04/03/2011

Then, perhaps pre-nups, for those who decide to take the plunge, could be outlined and detailed fairly so that both parties in a prospective marriage do not lose financially in the event that they decide to split.

Each pre-nup crafted according to the circumstances of both parties, possible outcomes regarding children, assets, responsibilities, etc. As it is, these days, it would seem to appear that the person that wants the pre-nup is the person that feels they have the most to lose, when the person that he/she married "changes" somehow.

I would have to assume that most people getting married for the first time each DON'T want pre-nups. They want to build a future together. Seems most pre-nups would occur when a person is considering taking the plunge for the second or third time. "Once burned, twice shy"?

[SteveDenver]

05:25 PM on 03/30/2011

Reason #1: Because marriage is a contract and NOT "sanctified."

[HerzogD]

05:21 PM on 03/30/2011

I am an attorney and have drafted prenuptual agreements and I could not disagree with this article more. Prenups make sense in a very small number of new marriages. You cannot say with such a sweeping statement that they are good for most people. The reasons here are laughable. For example, you can talk about finances and learn about each other w/o shelling out thousands for a prenup. I also don't think financial isolation from your spouse breeds happiness. My wife and I have very different philosophies about money, but we commingle our money. I consider that part of being married and it makes us closer. I think prenups plant seeds of doubt that increases some people's already high chances of getting a divorce. If you have a huge sum of money to protect, maybe. Otherwise, I say forget about it.

[dangar05]

05:38 PM on 03/30/2011

I am glad you are not my lawyer. Only in large amounts of money to protect? If I was making 250K and she get's half then I still have 125k. If I make $60k and she gets half then I am in deep crap. I didn't work this hard in life to give it away to someone so they DON'T have to work and if I don't work I go to jail.

[GTWiecz]

05:31 PM on 04/01/2011

It doesn't work that way darling. The courts are not going to award half of your income to your wife. If a woman is capable of working, she will have to get a job. What you do share in a split is money saved in assets, stock and bank accounts as a married couple. Half half and there you go.

[HerzogD]

12:21 PM on 04/04/2011

I of course recognize the value of a prenup in any marriage (although courts in my state can, if they so choose, still require you provide spousal support even though the prenup supposedly contracted your way out of it). You are coming at this from the perspective, however, that there is no downside to getting a prenup. There are many (cost, plants seeds of doubt that may never be overcome, good chance it will be unnecessary).

Reasonable minds can disagree on the frequency that prenups should be utilized. I don't think it makes me a bad attorney to recommend that most couples not use them. The largest reason for my opinion is that most Americans marry with roughly equal assets or with nothing to protect at the time of their marriage (I fell into the latter category). For these people, prenups don't make a lot of sense (unless one of you possibly expects a big inheritance. I, along with most people, don't expect that.

I have a personal philosophy that prenups are generally a bad idea unless the difference in worth of the spouses-to-be is particularly stark or the prospects of divorce are particularly high. With that said, I would never try to talk any of my clients out of a prenup, and if someone came to me requesting that I draft one, I would happily do it. Good luck finding an attorney who agrees with you on everything.

[Clarabell]

06:06 PM on 03/30/2011

As someone who has worked for attorneys and has seen how the "retainer fee" is nibbled at, I agree with the article. As an attorney it's in your best interest to have couples who are at odds and have complicated divorces that take years and many billable hours to resolve.

[Theemystro]

05:20 PM on 03/30/2011

I skimmed through these things and in the back of my mind I couldn't help but feel: what's the point.
A couple should be open and honest with other and well I don't even need too go on.
Pre-nups undermine the whole point surely?
No one enters a marriage anticipating what too do when divorce kicks in: if they do what's the point in getting married.

[Bushido08]

05:11 PM on 03/30/2011

This article must have been written by an out of work lawyer...trying to get your money going into marriage and then later on with the divorce...coming and going as they used to say. Best time to get a divorce is when you are both dead broke...otherwise the lawyers will drag your case out until you are broke and they have all your money.