Prenuptial Agreements & Cohabitation Agreements

Despite the divorce rate and impermanence of many relationships, I think people do want to be in long-term relationships. Family life and a happy home are wonderful things. Money is almost always a factor affecting life in a relationship on a day to day basis as well as at the time of break-up or divorce.

IMPORTANT FACT: In New Jersey, now, if parties are unmarried and they have no written agreement, there is no right to palimony for the supported individual. The options are to either draft a written agreement or expect nothing. You need to ask:

  • Is it better to have an open negotiated agreement based on discussion and understanding?
  • Or is it better to live in the dark not knowing at all what the future holds and how things will work out?

Additionally, for couples that have assets prior to marriage or have children from prior relationships, they really should enter into prenuptial agreements. This may not seem very romantic to some, but it is a real concern and frequently necessary

Actually, I think working with your loved one to create a comfortable agreement is a romantic thing. Knowing you can work tough issues out together should give a person a sense of peace and happiness. This is a strong foundation for a marriage to be built on.

The Problem: Pre-nups and cohabitation agreements must be formed properly and I believe most are not. The truth is many couples have discussions and at least an outline of an understanding before they go to the lawyer’s office. Before the marriage or cohabitation, the parties usually are in a loving state of mind and they tend to be reasonable and generous with one another. The supported spouse or partner typically is looking for reasonable support going forward. He or she is not looking to hurt the other person. The supporting spouse typically has no problem ensuring reasonable contribution to the supported party as long as he or she finds it affordable and reasonable.

Beware that one thing in this process can often be a big derailing factor: lawyers. I have found that good emotions and feelings exist before the marriage or cohabitation. However, lawyers without the right experience can get involved and cause chaos. They do this under the guise of thinking that they are doing a service to their clients. These lawyers draft the pre-nups or cohabitation agreement solely with the idea of protecting their client.

These agreements sometimes do not capture the intent of the arrangement the couple was trying to achieve. This misalignment of intentions starts when the lawyer drafts an agreement and circulates it to the “moneyed party,” as if they are drafting the document to protect “the moneyed party”. The lawyer thinks that she is helping the client by drafting to solely protect “the moneyed party”. The lawyer thinks that she is helping the client by drafting a document giving the other party much less than was understood. This “moneyed party” believes that this is the process and the lawyer is doing her job. The other party receives the agreement and is usually hurt, fearful and angry because he feels that he is not being treated fairly and with respect.

So, the fighting starts. The “moneyed party” becomes upset and uncertain also thinking that he should listen to the lawyer and not go with the original understanding. The supported party feels insecure and angry thinking he/she will be left in the cold. The agreement goes back and forth months or weeks before the date and the parties build resentment. The wedding or cohabitation is less wonderful than it could be.

In the end, the parties usually end up where they originally intended, but with a lot of bad feelings.

The Solution: I believe that in a pre-nup or cohabitation agreement situation, parties should either mediate or alternatively, if you are going to a lawyer, remember the lawyer works for you. Certainly protect yourself, but you know what feels appropriate and comfortable. Work with the other side, not against the other side. Remember, you are a couple preparing for the future. I believe the agreement before a wedding or cohabitation should be a team effort, not an adversarial proceeding. This is how we approach these agreements at Helfand & Associates.

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