Couple living together
The Importance of Cohabitation Agreements

Living with someone special? Not ready to take wedding vows?

You need a cohabitation agreement between you and your significant other.  A cohabitation agreement is a contract between people living together in the same household who are in a romantic relationship but not married.  Details such as property rights, financial support, dealing with debt, healthcare, caring for children, pets, and more can all be included.

The agreement permits the individuals concerned to determine in advance who will keep specific assets and what will happen to assets that have been purchased together should the relationship end.  This agreement is intended to bind both parties.

A cohabitation agreement can give each party an idea of the expectations of the relationship with the legal enforceability to protect against financial ruin or the loss of support that was promised.  No one likes to think of a relationship as ending sometime in the future, but if it does the cohabitation agreement can prevent an ugly battle as everything was written down in advance.

Like all contracts, a cohabitation agreement has to meet some basic legal requirements in order for a court to enforce its terms.  You should talk to an attorney in your area if you’re considering making an agreement.

Legal requirements for cohabitation agreements can vary depending on where you live and what your circumstances are.  Some of the basic requirements are:

  1. Consideration – The actual act of moving in with someone (or continuing to live with someone) is the consideration for entering into the agreement.

  2. Fair & Freely Entered – No one can legally force you to enter into a contract.

  3. Knowing – For a court to find your cohabitation agreement fair and enforceable, it must be certain that both you and your partner entered into it with full knowledge of what you were agreeing to. That means, for example, that you have to be upfront about all aspects of your finances.  You will usually have to create and include detailed financial disclosures as a part of the agreement, or at least disclose to each other the full details of your financial situations before entering into the agreement. Revealing your debts, assets, obligations, incomes, credit scores, and other key pieces of your financial and personal lives is part of this process and is best done in writing.

  4. In Writing and Signed – Verbal agreements and agreements with broad or poorly stated provisions are often difficult to enforce.  Once the agreement is written, each partner needs to sign it and keep a signed copy for themselves.

Some details a couple might include in their cohabitation agreement are:

1)  Property – Whether it’s a house, a dog, or bills, you and your partner have shared interests in at least some of the things you own.  If you break up, deciding how to divide that property without a cohabitation agreement can be a nightmare.

2)  Cars –  After a home, the most expensive piece of property most couples own is a personal vehicle.  Like real estate, vehicles must be titled in the owner’s name, and transferring ownership requires the legal transfer of title.  If you and your partner have one or more vehicles, your cohabitation agreement should address if, and how, ownership of those vehicles will change in the event of death or the end of the relationship.

3)  Personal Property –  Both of you will acquire personal property, such as household goods or clothing, while in your relationship.  Much of this type of property won’t need to be covered in detail.  However more important possessions, such as family heirlooms, furniture, electronics, or valuable collectibles, should be.

4)  Debts – If you or your partner have debts, or either of you acquires debts during the relationship, dividing responsibility for those debts through your agreement is essential.  It’s common, for example, for both partners to have their own debts prior to entering the relationship, such as student loans. Acquiring joint debts in the course of the relationship, such as taking out a joint credit card, is also common.  Your cohabitation agreement should address how different types of debt get divided after a breakup, as well as who’s responsible for making payments while you’re still together.

5)  Support –  Spousal support, also known as marital support or alimony, is a big part of most divorces, and every state has laws that allow either spouse to pay or receive support once the marriage ends.  Non-married couples don’t have that right automatically.  Your cohabitation agreement should address support payments directly, either by stating that both of you agree there will be no such payments in the event of a breakup or by providing the details of any payments that will be made.

6)  Inheritances – You don’t have a right to an automatic inheritance from your partner if you’re not married, regardless of how long you’ve been together. If you want to provide an inheritance for your partner upon your death, your cohabitation agreement needs to state this, as well as address how the inheritance will be passed along.  You can’t use a cohabitation agreement as a substitute for a Last Will and Testament, but you can use it to state how much you’ll leave your partner through your will.

7)  Pets –  While you may consider your pets part of your family, the law considers them property.  As a result, your agreement should state who is responsible for caring for your pets, paying pet expenses, and who gets to keep the pets if and when the relationship comes to an end.  You should include a pet clause if either of you brings pets into the relationship, as well as if you plan on acquiring them later.

8)  Income, Savings, & Expenses – Apart from assets and debts, living with a partner often involves co-mingling income, sharing expenses, and some level of joint financial interests and responsibilities. While some couples have no intention of sharing money, others freely give and take funds from one another without any accounting.  Whichever camp you fall into, you need to discuss your preferences with your partner and include them in your cohabitation agreement.

9)  Income and Banking – If both partners earn an income, your agreement should state how that income will be distributed or managed.  For example, you might choose to divide your income by automatically transferring some funds to a joint checking account to pay for joint expenses and the rest to individual accounts for each of you.  If only one of you has an income, you’ll have to decide how you want the non-earning partner to access these funds, especially if that partner is responsible for paying any joint expenses or providing for savings.

10)  Retirement and Savings – If you plan on staying together indefinitely, or if either of you plans on retiring in the coming years, it’s essential to discuss who will be responsible for saving for retirement and paying expenses after one or both of you stop working.  It’s also important to agree on how to divide your retirement savings if you break up.

Both partners should have some idea of when they want to retire and how much they’ll need when they do.  If you plan on sharing your retirement funds or using them to pay for joint expenses, your cohabitation agreement should reflect that.  Talking to a financial planning professional about your individual and shared goals is always a good idea here.

11)  Bills – Will you and your partner share a cell phone plan?  Internet service?  Cable TV fees?  Discuss how you want to divide these types of living expenses and include them in your agreement.

12)  Household and Living Expenses -. Your agreement can include any expenses and costs you feel are appropriate, such as babysitting fees, charitable donations, and clothing expenses.

13)  Healthcare – Marriage grants automatic rights to spouses as each other’s next of kin, but non-married couples don’t have these rights.  As a result, a cohabitation agreement should address any key healthcare issues you share.

14)  Health Insurance –  Health insurance is an important concern for many couples. While both of you are free to find your own health insurance, employer-provided insurance usually doesn’t extend to a non-married partner. (This isn’t always the case; some employers do offer this option, and some states and cities have domestic partner coverage requirements.) Your cohabitation agreement should address who is responsible for obtaining health insurance coverage and how much each partner must contribute toward it. This is especially important if one partner intends to stay home and not work or otherwise doesn’t have access to employer-provided coverage.

15)  Healthcare Directives – If you’re married and your spouse becomes incapacitated, you typically have the right to make healthcare decisions for them. But if you’re not married, you have no automatic right to make such decisions. That’s where healthcare directives come in.  A healthcare directive (also known as an advance directive, healthcare proxy, or by similar terms), is a legal document you prepare in anticipation of losing your ability to either make or express your healthcare wishes.  This is a separate document from the cohabitation agreement.

16)  Children & Family – If you and your partner plan on having or adopting children together, or if either of you has children from a prior relationship, there are several issues your agreement must address.

17)  Child Custody –  Child custody is the legal right to live with a child (physical custody), make child-rearing decisions (legal custody), and generally be involved in the child’s life.  Your agreement should include terms about who the children will live with, who they’ll spend holidays with, and how you and your partner will determine child-rearing questions in the event of a breakup.

18)  Child Support – Child support is money paid from one parent to the other to cover the costs of raising a child.  In general, the custodial parent (the parent who has the child most of the time) receives child support from the non-custodial parent.

19)  Expenses and Care Decisions – Your agreement should also include terms about who will be responsible for child-related expenses or care decisions, both while you’re together and if the relationship ends.  For example, if you want to create a college savings account for your child’s anticipated college expenses, you’ll want to include terms about how you intend to fund it.

20)  Children From Other Relationships – One of the more challenging issues you can face in a cohabitating situation is the care and support of children who are not yours.  If, for example, your partner has a child from a previous relationship for whom you care and provide, a court won’t typically recognize your right to custody visitation even if you include a section for it in your cohabitation agreement.  Courts are obligated by statute to protect the child’s best interests, and those statutes do not recognize custody or visitation rights for non-biological parents.

21)  Sex & Lifestyle Clauses – While it’s generally assumed that cohabitating couples engage in sexual relations, you can’t use your agreement as a contract specifically for sexual relations. For example, if you create a cohabitation agreement that says you agree to live with your partner in exchange for regularly having sex with her, a court will refuse to enforce that agreement.  Courts view these kinds of agreements, known as “meretricious,” as similar to prostitution, and as such refuse to enforce them.

Lifestyle clauses, on the other hand, can include sexual conduct.  While courts are reluctant to enforce meretricious agreements, agreements with lifestyle clauses in them are often accepted. These clauses typically address infidelity and tend to include provisions that require the philandering partner to pay a financial penalty.

However, the enforceability of these types of clauses is not always easy to gauge, so talking to a family law attorney about infidelity or similar lifestyle clauses is necessary if you want to ensure your agreement is enforceable.

Beyond infidelity, lifestyle clauses can also be used for issues not addressed in other parts of your agreement.  For example, some people include lifestyle clauses that state where the couple will spend Christmas, when in-laws or relatives can visit, and even what happens if one partner gains too much weight.

21)  Ending the Relationship – There are some specific issues couples routinely face when their relationship ends that should be addressed in your agreement. These include which partner is responsible for moving out, what kind of notice you must provide to each other, and how long you have to find a new place to live.  Other issues, such as whether you’ll liquidate jointly owned property and whether one partner will buy out the other’s interest, should also be addressed.

22)  Making Changes – No one can predict the future, and a key part of any good cohabitation agreement is allowing for change.  Your agreement should state in clear language what you must do if either you or your spouse wants to make changes to the agreement terms.

Creating a cohabitation agreement doesn’t typically require a lot of time, effort, or money.  If you and your partner hire attorneys to negotiate and draft the agreement for you, you can usually get this done in a few weeks.

When considering whether or not a cohabitation agreement is worth it to you, consider what might happen if you don’t have one, or if you have one that isn’t well-written.  The potential financial costs and mental anguish can be significant.

Anticipating a breakdown of the relationship is not the only reason for a cohabitation agreement.  A more compelling reason to have an agreement is that you know your relationship is strong and you want to make sure that you’re both protected.

No matter how committed you and your partner are to each other, how strongly you feel about each other, and how healthy your relationship is, the law doesn’t give you the same rights as a couple who are legally married.

If you want to make sure your relationship desires are legally protected and give yourselves peace of mind, you need a Cohabitation Agreement.  In addition you should also have the  following legal documents to help cement the relationship: Power of Attorney, Living Will or Healthcare Directive, and a Last Will and Testament.

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