No cookie cutter: Stage of life and the marriage or cohabitation agreement

Not all marriage and cohabitation agreements are the same. The agreement that makes sense for a couple late in life who both have children from previous relationships will be different from the agreement that makes sense for a couple in their thirties who are just about to have their first child together.

The legal landscape that can be covered by a marriage or cohabitation agreement includes:
• Property ownership (homes, investments, businesses, inheritances for example)
• Responsibility for debts
• Estate planning and wills
• Financial arrangements (bank accounts, household expenses, income sharing)
• Spousal support
• Financial responsibility for children

People often think of cohabitation and marriage agreements dealing with separation, but for many couples, especially those with blended families, the primary motivation of the agreement is to deal with how their estates and property are to be dealt with if one of them dies or becomes incapable of managing their financial affairs.

A “what’s mine is mine, and what’s yours is yours” type of agreement – where each person’s property remains their own and can be given as each wants on their death, and no spousal support would be paid if they separate – can make sense for a blended family couple where each person comes into the relationship later in life with enough assets and income from their working life or previous family to provide for themselves for their lifetime. For this couple, the desire of each person to have certainty about their separate property and to maintain a separate inheritance for their own children might be the most important factor.

This same agreement in many cases would not work as well for the young couple who are just about to have their first child together. A truly separate property agreement would be only really be fair if each person in the future went along merrily increasing their own income earning capacity and building their own wealth so they could each fully provide for themselves and the children if they separated or if one of them died. The reality more often, even in modern marriages, is that at various points in the relationship one person may be working outside the home more while the other puts in more work on the home front, or perhaps even works in or contributes directly to the business or career of the other. It is difficult to predict in advance what will happen. For this young couple, it may make more sense to do a “carve out” type of agreement to create certainty about particular issues such as inheritances, the property each brought into the relationship, and debt without giving up all rights on other issues.

These are in some ways two ends of a spectrum, and of course there is a huge amount of variation in the situations of different couples and families and the agreements they will come up with. Each couple needs to think through where they are coming from, where they plan to go together, and what unexpected detours they want to plan for. Then the couple can make an agreement that makes sense for them and will stand the test of time.