By now, most people understand that a prenuptial agreement, or prenup, is not something that applies only to the rich and famous. In fact, a prenup can save a lot of time, pain and emotional turmoil for any married couple should their marriage end in divorce. But what is a cohabitation agreement and are the two interchangeable?
Cohabitation agreements are contracts between two individuals who are in a romantic relationship and share the same household. These agreements address a variety of financial, personal and family issues and how they should be dealt with in the event the relationship ends. Although they sound very much like a prenup, there are some basic differences between the two. For one thing, a majority of states have laws that pertain specifically to prenuptial agreements; cohabitation agreements, on the other hand, are governed by general contract law.
To learn more about cohabitation agreements and whether you should consider one, read Money Crashers’ “What Is a Cohabitation Agreement – Why You Need One Before Living Together.”