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Las Vegas, NV Estate Planning & Probate Blog

Monday, May 7, 2018

I Do…But First Sign Here: Prenuptial Agreements, Postnuptial Agreements, Cohabitation agreements

Deciding whether to sign an agreement as it pertains to your relationship can be difficult.  Generally, this is not a one-size fits all type of decision, and the necessity is different for every couple.  Pre, Post and Cohabitation agreements are very useful for business owners, blended families, individuals with complex financial arrangements, etc.  Regardless of the underlying reasoning, it is important to understand the complexities involved in pre and postnuptial agreements.  Read more on the rights of husband and wife under Nevada law here.

Prenuptial Agreements.

Timing is the main difference between a pre and postnuptial agreement.  Prenuptial Agreements (also known as “Premarital Agreements”) occur before the marriage ceremony takes place.  Each person is represented individually by their own attorneys, and like any other type of contract, the terms will be negotiated between the attorneys until both parties agree.  Once an agreement is reached, the couple will sign the prenuptial agreement with their attorney’s present, making the agreement valid and binding from the date of the marriage.

So, what is the purpose of a prenuptial agreement and what does it entail?  The contents of a prenuptial agreement may vary depending on the party’s wishes.    The date of the marriage along with each party’s information is included in every prenuptial agreement.  Additionally, financial disclosures, detailing each party’s individually owned assets, is provided in a schedule within the document.  A prenuptial agreement will also incorporate a “what-if” scenario detailing the arrangement if the couple divorces.  These provisions address living arrangements, property ownership and accessibility, alimony and child support, custody, etc.  Each prenuptial agreement will be different depending on the couple and their goals/priorities for their relationship.

Depending on the state in which the couple resides, community property can be a major issue.  In a community property state, any property acquired during the marriage will be viewed as the couple’s property, therefore a 50/50 split.  Many couple’s address this issue explicitly in their prenuptial agreement to keep their property separate. Nevada is a community property state and therefore, an agreement addressing separate property is ideal to avoid the presumption of community property.  Addressing separate property in the agreement may mitigate ugly litigation in the event of a divorce.

Postnuptial Agreements.

If a couple is already married, a postnuptial agreement (entered into after the date of marriage) can provide the same protection as a prenuptial agreement.  Couples who enter into postnuptial agreements may do so for the same reasons as those who enter into prenuptial agreements.   Similarly, each party is represented by their own counsel. A postnuptial agreement is much like a prenuptial agreement substantively.  Infidelity clauses are popular provisions in postnuptial agreements and address the financial arrangement in the event that one spouse is unfaithful.  Asset protection is also a popular topic amongst postnuptial agreements.  If one spouse incurs financial debt, the assets may be protected from creditors by separating the assets. 

Cohabitation Agreements.

Do you have protection if you aren’t married and don’t have plans to marry?  If marriage isn’t on the table, but you want to enjoy all of the things that a marriage comes with, a cohabitation agreement may be a good alternative.  Like pre- and postnuptial agreements, cohabitation agreements address issues pertaining to financial responsibilities, property ownership, etc. Although, community property law cannot be enforced without a legal marriage, a cohabitation agreement sets out the terms agreed upon between the parties without the legal marriage.   Nevada attorney Tiffany Ballenger Floyd, Esq. states, “A co-habitation agreement can be a great tool to get everyone on the same page prior to living together.  During the process of drafting the agreement, finances & expectations are discussed, which can lead to valuable conversations and understandings that may cause future friction in the relationship.”

 

Entering into a prenuptial, postnuptial or cohabitation agreement can be a great decision for many couples.  Communicate with your partner about your wish to have an agreement and be open to their opinions about it.  These agreements clarify the things that are somewhat uncomfortable to discuss in an unemotional way, allowing for couples to focus on the exciting aspects of sharing a life. Remember, that when it comes to prenuptial, postnuptial or cohabitation agreements, parties must sign (with witnesses) and notarize for the agreement to be legally binding!

 

 

-by Laura Bown (Law Clerk/J.D. Candidate, 2018, Boyd School of Law, UNLV) with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), © 2018, Phillips Ballenger, PLLC


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