The terms “prenuptial agreement,” “cohabitation agreement,” and “marriage agreement” all refer to a similar type of agreement, an agreement that sets out the rights and responsibilities of spouses if they separate at some point in the future. There are many reasons that people enter into these types of agreement. While it is often the case that one person has significantly higher assets that they want to protect, it is also frequently the case that these agreements are for other reasons such as protecting an asset that is owned jointly by multiple members of a family, or parties have similar assets and they just want to preserve their separate ownership of specific assets. There are many reasons to want an agreement that sets out what will happen in the event you and your spouse should separate, and there are a wide variety of potential agreements that can be tailored to your circumstances.
The most important thing to keep in mind when contemplating these agreements is that you are better off addressing the issue early and openly. The idea of a marriage agreement often strikes a negative chord, which causes individuals who want these agreements to be slow to bring the matter up with their significant other. These agreement can be reviewed and set aside by the courts, and in particular the courts can set them aside for any of the following reasons:
(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
(b) a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
(c) a spouse did not understand the nature or consequences of the agreement;
(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.
When you do not address the marriage agreement early, it can cause a whole host of problems with enforceability. A rushed agreement might lead to one of the parties forgetting to disclose all of the property. A spouse who is asked to sign an agreement on the verge of the wedding date may be vulnerable and distressed. If there is no time a spouse may not be able to get good legal advice about the implications of agreement. Leaving this type of matter to the last minute can create all sorts of problems that are avoidable if the issue is addressed earlier. So if you are considering a marriage agreement, speak to a lawyer as soon as possible to make sure that your eventual agreement is as solid as it can be.