Many Florida couples choose to live together as they decide whether their relationship is worthy of marriage. For many of these couples, cohabitation turns into a long-term prospect, either by design or by circumstance. As they accumulate more and more assets together, many are unaware that they may be placing their financial stability at risk. While prenuptial agreements may not be of assistance to unmarried couples, it is still possible to secure a measure of financial protection.
Couples who choose to cohabitate can choose to draft a cohabitation agreement. Akin to a prenup, a cohabitation agreement outlines the terms by which assets would be divided in the event that the relationship ends. This protects both parties from losses and also helps ensure that everyone is on the same page as the couple moves forward.
Just like a prenuptial agreement, a cohabitation agreement begins by a full and open disclosure of the scope of assets. Both parties should fully disclose all income, assets and debt. Next, couples can agree to virtually any terms they desire in regard to the division of those assets in the event that the relationship comes to an end. The result is a binding legal contract that can help dictate the terms of a breakup.
In the event that a cohabitating couple eventually decides to marry, their cohabitation agreement can serve as an outline of how to draft a prenup. Prenuptial agreements are an excellent financial planning tool, and an option that many young couples consider as they weigh their plans for the future. Florida residents should consider both when entering into any form of committed relationship.
Source: theblaze.com, "Cohabiting Couples Might Want to Think Twice About Buying a House Together, Experts Warn", Lois M. Collins, Sept. 19, 2016