A Cohabitation Agreement – It Just Makes Sense

cohabitation couple

More and more couples are choosing to live together, but are choosing not to get married. Whether they do so for religious, ethical, moral or legal reasons, their rights can be affected by their decision not to marry.

The Marriage Contract

Marriage is, essentially, a legal contract. The contract includes the obligations that the husband and wife owe to each other during the marriage. The “terms” of the marriage agreement are the established the state laws and rules governing marriage. If a couple decides that they no longer wish to be married, a divorce proceeding can terminate the marriage contract. During traditional divorce proceedings, a judge will assist the couple in dividing up property, establishing alimony and child support and settling any other issues that arise. In some cases, divorcing spouses are able to come to an agreement by themselves or with the help of a mediator.

Unfortunately, unless a cohabitating couple takes proactive steps, they will not receive the same benefits afforded to married couples by law. If an unmarried couple’s relationship ends, there is nothing governing the split of property. In addition, neither party is required to pay the other party alimony. Thankfully, the law provides an option for unmarried couples to capture many of the benefits of the marriage contract: the cohabitation agreement.

The Cohabitation Agreement

A cohabitation agreement is a contract that spells out the legal relationship between an unmarried cohabitating couple. The agreement establishes a contractual basis for the couple’s rights and obligations, many of which are provided to married couples by law. Fortunately, a cohabitation agreement can provide for more specific rights or obligations than the law provides, allowing a cohabitating couple to tailor the cohabitation agreement to their relationship.

What Can You Put in a Cohabitation Agreement?

A cohabitation agreement, unlike the laws of marriage, can be flexible and specifically tailored to your situation.  it can cover only one transaction (like purchasing a house); or it can be somewhere in between.

Cohabitation agreements typically cover:

  • Property distribution when the relationship ends or one party dies
  • Financial support during the relationship or when it ends
  • How the debts of each party will be paid
  • Division of the couple’s home when the relationship ends or one party dies
  • The right to act as a guardian or conservator if one partner is incapacitated
  • The right to make emergency, or even routine, medical decisions for the other party

An experienced attorney can work with you and your partner to determine what your cohabitation agreement should cover. Each couple’s circumstances, including age, employment, income and lifestyle, will impact the cohabitation agreement and, unlike the traditional marriage where a couples’ rights and obligations are clearly defined, each cohabitation agreement is different.

Who Can Use a Cohabitation Agreement?

A cohabitation agreement is available and appropriate for any couple who intends to cohabitate for long time and will either co-mingle assets or make large purchases (like a house). Couples may choose not to marry because they are already married (and do not want to divorce); they are politically opposed to marriage; they are morally opposed to marriage; or for many other reasons. Additionally, in many states the law prohibits gay marriage and those in a homosexual relationship do not even have an opportunity to marry. As a result, for those who do not want to marry or are legally unable to marry, a cohabitation agreement provides a method to attain many of the same legal rights as married couples.

Is a Cohabitation Agreement Right for You?

Any unmarried cohabitating couple can use a cohabitation agreement, but they are not right for everyone. Cohabitation agreements are particularly applicable where the couple intends to stay together for a long period of time, and large amounts of money, property and debt will be accumulated.

Cohabitation agreements are also recommended if one partner:
Has significant assets or a large inheritance

  • Owns a business or property
  • Has children from a previous relationship
  • Makes significantly more money than the other
  • Has significant debts
  • Gave up a career to raise children
  • Wants to properly compensate a partner who acts as a caregiver
  • Wants to specify health insurance coverage for the other partner

For example, if a woman supports her boyfriend while he attends medical school. They cohabitate during and after medical school. Unfortunately, after ten years, they decide to end their relationship. Over the course of his career, the boyfriend earns a very large salary. In many states, if the couple had been married, equitable distribution laws would ensure that the supporting partner receives compensation for her support during medical school. Without a cohabitation agreement, the unmarried woman has no recourse. A cohabitation agreement, however, can be used to spell out exactly what the boyfriend would owe to the supporting girlfriend, in the event they break-up.

Common Law Marriage

Additionally, in some states, where common law marriage statutes are on the books, a couple may become married without intending to. Cohabitation is typically a requirement in a common law marriage, as well as some show of intent to marry. Simply adding your girlfriend or boyfriend to your health insurance policy could be enough to create a common law marriage. In these common law marriage states, a cohabitation agreement can simply state that the couple is not married and does not wish to get married, which avoids the possibility of an inadvertent common law marriage.

An experienced family law attorney can help you decide whether a cohabitation agreement is right for you and your partner. An attorney can also help to ensure that your agreement provides all of the protection that you need, and help facilitate discussions with your partner.

Important Issues to Address in Your Cohabitation Agreement

Real Estate

If you and your partner could potentially acquire a house, apartment or condominium in the future, you need to think about how you plan to deal with that circumstance. First, the cohabitation agreement should discuss how the property will be purchased. For example, will both parties contribute fifty percent, or some other percentage? Then, the couple must determine how to divide the property ownership. Again, will each party own half of the property, or will they split the property in some other manner? Finally, the agreement should determine how the property will be disposed of if the relationship ends or one party dies. For example, will the couple sell the property and split the profit or will one party buy-out the other party’s interest? Division of real estate is generally one of the most significant things that a cohabitating couple can address in the cohabitation agreement.

Personal Property

In a similar vein, you and your partner most likely will own some personal property when you begin your relationship. Your cohabitation agreement may wish to memorialize your desire to keep all previously owned property solely owned. This desire is particularly relevant with high value items, like cars, antiques and rare art.

Joint Expenses

As any cohabitating couple knows, living together can result in a significant savings as opposed to living separately. However, expenses still exist and your cohabitation agreement can address how the expenses are shared. In some relationships, particularly where both parties work, you may wish to equally split all of the expenses. However, where one party works and the other party stays home, possibly to take care of children, the cohabitation agreement can include provisions requiring the working spouse to cover all of the expenses. In fact, the cohabitation agreement can specifically address each expense a cohabitating couple has and denote who is responsible for paying for it. And if new or unexpected expenses come up in the future, couples can always re-write the cohabitation agreement to include them.

Financial Assistance for Ex-partner

No couple wants to discuss the possibility that their relationship will end. Unfortunately, relationships do not always go the distance and without a cohabitation agreement, it can become even more difficult than it needs to be. In most cases, a cohabitation agreement will only need to address how the property is split if the relationship ends. However, particularly where one partner earns a significant amount of money more than the other, the cohabitation agreement may contain a form of financial assistance for the lesser earning spouse. Conversely, in some states an implied “palimony” may be created, and one spouse can be required to provide financial assistance. In those states, a cohabitation agreement can prevent the award of palimony.

Death of One Partner

Finally, cohabitation agreements should contain provisions addressing the death of one party. While death is certainly a concern for older cohabitating couples, every couple, regardless of age, should consider how to handle it. If a cohabitating couple do not have any children, then they may wish to simply wish to give all of their property to their partner. While a will can designate the way that your property is divided at death, a cohabitation agreement can ensure that your partner will receive what you intend.

The Legality of Cohabitation

Cohabitation agreements have not always been legal, but most states have accepted them over the years. While it is highly recommended that unmarried couples enter into a written cohabitation agreement, an oral contract is sufficient. Unfortunately, while an oral contract will be enforceable, it is often difficult to prove the terms of an oral agreement. In some cases, an “implied” cohabitation agreement is created where a cohabitating couple’s actions indicate some agreement.

 Difference between a Cohabitation Agreement and a Prenuptial Agreement

Prenuptial agreements and cohabitation agreements are very different and should not be confused. While they both intend to define the rights and responsibilities of a couple, they differ in key ways. A prenuptial agreement is an agreement between a couple that intends to marry. And the prenuptial agreement will govern the marriage and its possible dissolution. A cohabitation agreement, on the other hand, is intended for couples who do not wish to marry. Like the prenuptial agreement, a cohabitation agreement will likely cover certain issues during the relationship and how the couple will handle the relationship’s termination.