February 2016

February 2016
THE VALLEY BUSINESS JOURNAL
www.TheValleyBusinessJournal.com
21
Don’t Be a Stupid Cupid!
Why You Need a Prenup or Cohabitation Agreement
LEGAL
Presented by
Kelly Bennett, Esq.
Senior Partner at
by
Bennett & Bennett, APC
Steve Fillingim
It’s February – Valentine’s season.
Love is in the air. You might be saying
“ain’t love grand?” It can be, but love
gone wrong can also cost a few grand…
or more.
You’ve made it through the divorce
process, and for the first time in a while,
things are looking up. Maybe you’ve
started a new business, or made significant
career advances. Perhaps you’ve
finally finished paying off your last child
or spousal support
obligation – financial
recovery is on
the horizon.
Along with
new beginnings
come new relationships.
These
can be exciting,
but when they turn
from casual fun to
serious commitment,
you may
find anxiety riding
on the coattails of
your happiness.
The downside to post-divorce
relationships is that they have a higher
failure rate than first marriages…and
the odds are against you for second,
third and fourth endeavors. Pre-nuptial
agreements (“pre-nups”) are contracts
made before marriage. A solid pre-nup
outlines how a couple’s financial affairs
will be handled during the marriage, and
how assets will be divided in the event
of a divorce.
Pre-nups are no longer just for
billionaires and celebrities. A pre-up is
something to seriously consider, especially
when:
• You or your partner earns significantly
more than the other;
• You own your own business;
• You have significant pre-marital
assets (real estate, pensions, investments,
etc.);
• You have children from prior relationships;
• You expect to receive a large inheritance;
• Your fiancé has had multiple former
marriages;
• You have a brand name in your industry;
• You have a high likelihood of future
success.
The Romance of a Pre-Nup. Some
people think pre-nups are “unromantic”
and indicate a lack of trust. To
the contrary, talking about a pre-nup
before or at the time of engagement
(O.K.….maybe not when you present
the engagement ring…) actually opens
up candid dialogue about each other’s
expectations and critical views on
money management. Where one spouse
intends to be a “work-at-home” spouse,
a pre-nup can actually define the value
of the stay-home spouse’s work, and
provide for compensation to that spouse
should the marriage terminate. Pre-nups
also require full financial transparency
by disclosure of all assets and debts
between the parties. That takes a lot
of trust – particularly if you’re a very
private individual!
Many people are afraid to bring up
the issue with their significant other.
Here, timing is everything. Try not to
wait a week before the wedding to bring
it up! In fact, if your relationship is moving
into the serious zone, before anyone
starts talking about
fantasy weddings and
dreamy honeymoons
make your monetary
expectations clear, early
on.
Cohabitation
Planning. In our practice,
we often see older
people after divorce
decide to live together
instead of embarking
on a second or third
marriage. Regardless
of the reasons you may
decide to cohabitate, like a pre-nup, a
written cohabitation agreement is the
smart way to go. Treat it like a business
transaction, because when love “ain’t so
grand” things can get really ugly (and
expensive). California does not recognize
“common law marriage” (the old
concept that if you live together long
enough, eventually you’ll be considered
married in the eyes of the law). Cohabitation
agreements in California are governed
by contract law and may give rise
to other rights in the civil courts. If drafted
properly, cohabitation agreements
are enforceable like any other written
contract. Many people will live together,
split, and allege oral contracts regarding
property and entitlement to support.
Oral contracts are tough to prove. The
better tool is a written agreement where
all expectations are spelled out in black
and white, and where it is clearly stated
that there shall be no other agreements
or changes to the agreement, unless put
in writing and signed by both parties.
Kelly A. Bennett is a seasoned family
law attorney, mediator and private
judge in Temecula, California.
She can be reached at 951-719-
3456, or you can learn more at
bennettandbennettlaw.com.
Disclaimer: This article is offered only for
general informational and educational purposes,
and does not constitute legal advice or legal
opinions. You should not act or rely on any information
contained in this article without first
seeking the advice of an attorney.
connect: bennettandbennettlaw.com