A prenuptial agreement (or a “prenup”) is a contract between two individuals who intend to marry. The purpose of the prenuptial agreement is to disclose all assets of both parties at the beginning of the marriage and define how the assets will be divided and characterized if the parties decide to terminate their marriage. Additionally, prenuptial agreements can also define what happens to the assets of a spouse should that spouse die prior to the other spouse. It is advised that one or both parties to a marriage use an Ohio prenuptial agreement attorney to assist with drafting.
What a Prenuptial Agreement Includes
A prenuptial agreement contains a list of all assets and liabilities of each party. The prenuptial agreement defines what property is to be considered separate property and what property is to be considered marital property. It can also provide terms regarding whether spousal support will be paid and under what circumstances. It is important that the prenuptial agreement be signed well in advance of the wedding and with full disclosure of the assets and liabilities of each party. Finally, the prenuptial agreement determines what property and assets will be subject to division should the parties terminate their marriage. Prenuptial agreements can be simple or complex which is why it’s important to use an expert to draft the agreement and ensure that all legal formalities are followed and can be enforced in court.
Why a Prenuptial Agreement is a good idea
A prenuptial agreement may not seem romantic but actually allows parties to have difficult and intimate conversations regarding finances, the future, and expectations should the marriage not work out. These conversations can lead the parties to better understand the financial and life goals of their partner. The leading causes of divorce is related to the finances of the marriage. A prenuptial agreement spells out how the relationship will end financially and eliminates dishonesty in the relationship.
A cohabitation agreement is a contract between two people who choose to live in the same house and have joint property. The most common joint property is the house. A cohabitation agreement determines the procedure for refinancing, selling, and transferring interest in the real estate. This allows the parties to have an understanding as to how the house will be treated in the event the relationship ends. If parties do not have a cohabitation agreement and cannot determine what to do with the joint real estate after the relationship ends, then one is forced to either litigate the issue in a partition action, remain obligated on the mortgage loan, or keep their name on the real estate for an indefinite amount of time. A cohabitation agreement provides clarity to the financial relationship while allowing the parties to invest in real estate for mutual gain.
What Happens to the Cohabitation Agreement if You Get Married?
A cohabitation agreement will typically contain a provision that states that the agreement terminates upon marriage. A cohabitation agreement can be replaced by a prenuptial agreement in the event the parties intend to marry.
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