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Prenuptials and Cohabitation Agreements

Washington is a community property state. That means that whatever is earned, while married and while living in Washington, is treated as though each of them earned it, regardless of who actually went to work. Property which is earned while not married can, in many cases, be treated as though it were community property. Today, it is very common for couples to enter into agreements about their financial lives before they marry or begin living together. They can discard the traditional community property rules for marriage, and they can be clear about ownership if they do not marry. In most states, the courts accept the written agreements. The couples just have to follow some basic rules. Each partner fully discloses what he or she owns and its value. The agreement is in writing. Both have a full and fair opportunity to review the agreement and to negotiate its terms. That means that they have enough time to think about it and have their own attorney review it.

The agreement is one of the ways you can clarify what you really intend to have happen to your property when you are gone as well as during your life. The parties understand in advance what each one owns, and what happens to the property if they part or if one dies. A Prenuptial Agreement or a Living Together Agreement defines ownership rights between the two of them, and also to outsiders, including the IRS. They decide how each one's earnings will be treated. Who pays for the new car? What if one charges something and they both use it? Who gets the retirement package? Are they responsible for each other's health care costs (this is a big ticket item for seniors who chose to live together). If he pays for the mortgage and she keeps up the yard, then does she get an ownership interest in the home's appreciation? These are all legitimate questions.

I hope you will not leave this to chance. If there are significant assets, inherited assets, second marriages, and anybody who is living together without marriage, then you should have an agreement. Sometimes people avoid this discussion, because they think it implies that they may part. Consider that writing an agreement may also mean that you desperately want the person you love to have your assets, but others challenge him or her. It's best to tackle this topic openly and frankly, and make sure both you and your love are clear about what's what and it's also clear to the rest of the world.