Prenuptial and Cohabitation Agreements
Why a Prenuptial Agreement is a good thing
When you plan to marry, consider a prenuptial agreement. Marriage is one of the biggest contracts of our lives. Yet most people spend less time thinking about the contractual obligations of marriage than they do about studying for a driving test.
A prenuptial agreement, or prenup as it’s commonly called, defines the financial parameters of your relationship with your partner. Look at all of the benefits:
- It can protect any premarital property from any community claims, even if the growth or proceeds come from post-marital efforts. If you own a business, this can be particularly important.
- You can preserve future earnings as separate property.
- Define how (and whether) you’ll acquire and dispose of common property.
- It determines whether each of you will be obligated for the post-marital debts of the other.
- It could also be used to define or waive any spousal maintenance obligation.
- If one of you has creditors, it can protect the spouse’s assets from those creditors.
- It can provide for a fair division of joint living expenses.
- When one spouse dies, the survivor can be spared painful litigation with heirs.
- If you divorce, it can eliminate costly, emotionally draining litigation.
Cohabitation in Arizona
Did you know that in Arizona, just living together doesn’t mean you have a claim for spousal support (aka spousal maintenance)? Arizona does not recognize such claims. However, when you pool your resources and income you may have a claim or interest in the pooled assets. That’s where having a Cohabitation Agreement comes in handy. It spells out whether or not you will share in each other’s assets and liabilities.
Prenuptial Agreements and Cohabitation Agreements aren’t meant to be confrontational or negative. They’re the opportunity to look at your impending life together practically, to make plans and to simplify how you approach assets, earnings and property. Consider it from this perspective, if you were about to go into business with someone, you’d dot the i’s, cross the t’s, and map out a plan. Does your love partnership deserve less than a business one?