Negotiating prenups and cohabitation agreements

Some couples in California may want to sign a prenuptial agreement or even a cohabitation agreement before moving in together. This can be a good idea, but it can also make for a difficult conversation. This was the case for one woman whose boyfriend asked her to sign an agreement before she moved into the home that his mother helped him buy.

The woman had already agreed to pay a reduced rent and half of the utilities, but she refused to sign thecohabitation agreement. Specifically, she objected to the part that said that if they married, she would not get any spousal support or other financial compensation regardless of her contributions to the house. In fact, it is not unusual for the first draft of a prenup to be a kind of boilerplate if the couple have not discussed these issues first. An attorney might draw up a document like this with the aim of protecting the client. This can be a starting point for discussion.

Each person needs an attorney. They also need to talk about how they can structure the agreement for their individual situations. For example, in this case, the woman might gain a certain percentage of equity in the home each year. Prenups can also contain provisions that allow them to change in the years ahead.

It is important that people understand the prenups they are signing and are not pressured into signing it. A prenup can still be challenged in court if the person did not get adequate legal counsel or the agreement seems particularly one-sided. Since California is a community property state, spouses without a prenup are supposed to divide allpropertyequally. If one person has a home, this could be half of the value of the home’s appreciation since the marriage.