Cohabitation Agreement / No-nup
A no-nup (otherwise known as a cohabitation agreement) is exactly what it sounds like – a couple gets nothing in addition to what they had when they moved in together. Couples enter into no-nup agreements to outline up front who will keep certain assets and what will happen to assets that were purchased during the relationship.
A cohabitation agreement is between two people who live together. It provides protection from unnecessary costs and time spent in a courtroom should the relationship end. No-nups help to identify property rights, mutual financial support during the relationship or after a breakup, as well as childcare. Debt, guardianship and the parental authority to make emergency medical decisions can also be outlined in a no-nup.
No-nups are trending in California family law mainly due to the differences in goals and desires between millennials and older generations. Additionally, the reality is that marriage rates are falling, while cohabitation is on the rise. As a result, many couples decide to live together before getting married or as a permanent arrangement.
Difference Between a Cohabitation Agreement and a Prenuptial Agreement
From a legal perspective, the difference between a cohabitation agreement and a prenuptial agreement is that a cohabitation agreement is a contract that affects the respective rights of each party under civil law. A prenuptial agreement alters the respective rights of each party under the family code in the event of divorce. This difference is what determines the validity and enforceability of the respective agreements.
For example, if a prenuptial agreement is not presented to the other party at least seven days before it is signed, then it is legally invalid for all purposes. Likewise, if both parties are not represented by attorneys, any financial support a prenuptial agreement is invalid. A party seeking a valid cohabitation agreement is not bound to the stringent requirements of a valid prenuptial agreement. For instance, there is no seven-day period before signing and there are no requirements that both parties be represented by attorneys.
The genius of the no-nup is that it allows you to define how to handle property and financial issues when the relationship is stable and reach decisions and agreements in a rational manner.
A no-nup is typically recommended if one person in the relationship owns a great deal of assets, has a sizeable inheritance or has large outstanding debt. Other situations where no-nup are beneficial are if one party left the workforce to raise children or desires to compensate their partner, who acts as a caregiver.
If you are considering cohabitation with your partner and want a no-nup, consult with a family law attorney to ensure you enter into a fair and beneficial agreement.