Premarital Agreements

34 Chapter 2
HOW IS A PREMARITAL AGREEMENT DIFFERENT
FROM OTHER KINDS OF AGREEMENTS MADE
BY MARRIED AND UNMARRIED PARTNERS?
A premarital agreement is one of several kinds of agreements made by adults
entering into, presently in, or exiting from a relationship with another adult.
Others include, for example, cohabitation agreements, postmarital agreements,
and separation agreements.
•A cohabitation agreement is an agreement between two unmarried indi-
viduals who live or intend to live together, defining their intentions, rights,
and obligations with respect to one another while living together and
upon termination of their relationship.
•A postmarital or postnuptial agreement
2
is an agreement made by two
people already married to each other who want both to continue their
marriage and also to define their respective rights upon separation,
divorce, or death of one of the spouses. Some states, such as Ohio, prohibit
postmarital agreements by statute.
•A separation agreement is an agreement made between spouses in antic-
ipation of divorce or a legal separation concerning the terms of the
divorce or separation and any continuing obligations of the parties to
one another. Customarily the parties ask that the court approve the
agreement and make it part of the court’s judgment.
WHAT KINDS OF INDIVIDUALS AND COUPLES
MIGHT WANT TO EXECUTE A PREMARITAL
AGREEMENT?
Once thought of as appropriate only for the rich and famous, premarital agreements
are becoming increasingly more common. This is not all that surprising when one
considers that about half of first marriages end in divorce. Although premarital agree-
ment statistics are scarce, according to one source, some twenty percent of remarried
couples use premarital agreements, and they have quintupled in overall frequency
over the past twenty years.
3
The New York-based nonprofit organization the Equality
in Marriage Institute reported that over the two-year period between 2003 and 2005,
calls about premarital agreements tripled in number.
4
With shifts in demographics and expanding life spans, the growing senior
population has become an audience for whom premarital agreements provide an
especially useful vehicle for addressing the challenges and fears this segment of the
population faces with respect to marriage and remarriage late in life. “Various
deterrents to marriage are of particular concern to seniors, including problems of
wealth preservation from the significant other, avoidance of the other’s financial
obligations related to health care and other debts, protection of pension benefits
from previous marriages, protection against intestate succession, and interactions
with adult children,
5
who may not be as enthusiastic about the impending
marriage as are the parties! To protect the childrens interests, a premarital agree-
ment can work in tandem with a will to achieve desired ends.
Premarital agreements are also particularly appropriate for parties in circum-
stances such as the following:
There is a significant age difference between the parties.
One or both of the parties have substantial property of their own including
real estate, investments, businesses, and retirement accounts.
Cohabitation agreement
an agreement between two unmar-
ried individuals who live or intend
to live together, defining their
intentions, rights, and obligations
with respect to one another while
living together and upon termina-
tion of their relationship
Postmarital agreement
an agreement made by two people
already married to each other
who want both to continue their
marriage and also to define their
respective rights upon separation,
divorce, or death of one of the
spouses
Separation agreement
an agreement made between
spouses in anticipation of divorce
or a legal separation concerning the
terms of the divorce or separation
and any continuing obligations
of the parties to each another
M02_WILS3688_01_SE_C02.QXD 8/7/08 4:18 PM Page 34
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