If you are getting married, already married, or just living with your significant other, you might consider making an agreement with your partner to clearly define your rights with respect to your separate and jointly-held property. Each of these personal relationship contracts can be briefly explained as follows:
The Prenup. A prenuptial agreement, or premarital agreement as it is sometimes called, is a contract entered into prior to marriage by those people intending to marry each other. The provisions of this contract may vary widely, but commonly include terms for how property will be divided and how spousal support will be handled in the event of divorce or separation. Prenups should be completed and signed by both parties with ample time before the wedding. If signed at the last minute, one party could later make the argument that they entered into the agreement because of undue influence or in a state of duress. Moreover, each party should be represented by his or her own separate attorney to avoid the later argument that unbalanced or unfair bargaining took place. In every case, a prenup must fully disclose the assets, liabilities, and incomes of each party. Leaving such financial information out could potentially invalidate the entire agreement. Full disclosure is the best policy.
The Postnup. Postnuptial agreements, or separate property agreements, are written contracts entered into by and between husband and wife after they are married. Like a prenup, a postnup establishes how a married couple’s assets and affairs will be settled in the event of a separation or divorce. Without a prenup or a postnup, state statues will determine the nature of a couple’s property: whether it is community property, jointly-owned, or separate property. As with a prenup, both spouses should be represented by their own attorney when entering into a postnup.
The Cohab. A cohabitation agreement is a legal agreement between partners who are unmarried and have chosen to live together and desire to protect themselves from the needless cost of litigation should their relationship break down. Although such parties do not develop community or marital property rights as a married couple would, a cohab can assist in sorting out complex contractual rights which may develop as related to jointly purchased property, debts, etc. Such an agreement is intended to bind both parties such that when the relationship ends, the procedure for splitting-up is understood. Again, it is highly recommended that each party have their own separate legal counsel.