Let’s dive into an interesting topic we often get questions about– the differences between cohabitation agreements and prenups. These are both different contracts you can get with your boo, but there’s one major difference: a cohabitation agreement doesn’t involve marriage, and a prenup does involve marriage. Keep reading to learn about the nitty-gritty of cohabitation agreements and prenups, and get the lowdown on everything you might want to know before entering one of these contracts.
What is a cohabitation agreement?
A cohabitation agreement is a formal contract between two individuals who are currently living together or planning to do so in the near future and want to sort out certain financial and non-financial matters. Cohabitation agreements are for unmarried couples. Many states acknowledge and uphold this type of agreement.
So, what can you put in one of these agreements? The contents may vary based on state laws. Still, they generally may include clauses regarding property ownership, financial responsibilities, potential use of a joint bank account, “palimony” (financial support post-breakup), division of household chores, pet obligations, inheritance considerations in case of a partner’s death, and other relevant topics.
What is a prenup?
A prenup is also a contract between a couple, but the couple must eventually get married to be considered valid. A prenup also covers topics such as financial obligations, property ownership, use of a joint bank account, alimony (financial support during and/or post-divorce), etc. All U.S. states recognize and uphold prenups. The common clauses that are put into a prenup include: Property division, debt allocation, alimony, potential inheritances, gifts, taxes, joint bank accounts, and more. While the breadth of content for a prenup is fairly wide, virtually all states agree that child matters, such as child support and custody, cannot be included in prenups.
What are the differences?
So, what’s the difference between a cohabitation agreement and a prenup? The main difference is that a prenup is between two people who plan to get married soon. Marriage is required for a prenup to be considered valid. A cohabitation agreement doesn’t require marriage for it to be considered valid.
Another difference is in the formalities required to make each contract valid. For example, many states will recognize an oral cohabitation agreement and enforce it. (This means that the contract was verbally expressed and not put into writing). On the other hand, virtually no states recognize an oral prenup. Prenups must be in writing.
Who should get a cohabitation agreement?
Cohabitation agreements are for couples who plan to or are already living together but plan to remain unmarried (at least for now). Cohabitation agreements may be a good idea for couples who:
- Don’t plan on ever getting married, but want to make sure their assets are sorted out
- Don’t live in a state that recognizes common-law marriage, meaning they don’t have any protection under marital and divorce laws
- Are unsure of whether or not they want to get married in the future, and want to ensure their assets are protected
The bottom line is that any couple living together and unmarried may get a cohabitation agreement.
Who should get a prenup?
A prenup is for couples who are planning to get married soon. Prenups are only effective once the marriage takes place. Prenups are not valid if the marriage never happens. Prenups may include topics such as property division, debt allocation, inheritances, gifts, and more. Prenups may be beneficial for couples who:
- Want to protect assets
- Want to protect themselves against debt
- Have children from a previous relationship
- Want to clarify other matters with their partner in a written agreement
Frequently Asked Questions (FAQs) about cohabitation agreements and prenups
Let’s dive into some of your burning questions about all things prenups and cohabitation agreements.
Q: Can I get a prenup if we don’t plan to marry?
A: No. If you never plan on getting married, you cannot get a prenup. Prenups are only valid upon the marriage actually happening. If you are in a relationship and don’t plan on getting married, a cohabitation agreement may be a better route for you, but make sure to check with an attorney in your state.
Q: What happens to my cohabitation agreement if we decide to get married?
A: You may ask a lawyer in your state to revoke the cohabitation agreement on your behalf and create a valid and enforceable prenup in its place in accordance with your state laws.
Q: Can I get a cohabitation agreement if we plan on getting married?
A: Yes, you can get a cohabitation agreement if you plan on getting married one day down the road, but not anytime soon. For example, if you are fresh out of a divorce and don’t plan on getting married again in the near future, but marriage is still on the table, a cohabitation agreement may be a good option. This doesn’t prohibit you from getting married in the future, of course. However, you should consider speaking with an attorney when and if you decide to get married to see what your options are, such as revoking the agreement and entering into an enforceable prenup before actually tying the knot.
Q: Can I get a cohabitation agreement if we’re already married?
A: No, since you’ve already crossed over into marital territory, any contract you create with one another will be some type of “marital contract.” In this case, if you are already married, you would want to look into getting a postnuptial agreement.
Q: How do I ask my partner for a cohabitation agreement?
A: The best way to bring up the cohabitation agreement to your boyfriend or girlfriend is to approach the conversation with care, focusing on the mutual benefits, and framing it as a tool for clarity and fairness (not distrust).
The bottom line on the differences between a cohabitation agreement and a prenup
To wrap it up, the main difference between a cohabitation agreement and a prenup is that one is signed between a couple who is not yet married and not planning to get married anytime soon, and one is signed between a couple planning to get married soon. The contents of a cohabitation agreement and prenup are extremely similar, as they both lay out certain financial obligations, responsibilities, and rights. Keep in mind that each state law varies on the enforceability of cohabitation agreements, so it’s always best to speak with a lawyer to understand what options you have. Happy planning!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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