Summary
- A cohabitation agreement helps protect assets when living with a partner
- You can address debts, estate planning issues, and joint purchases
- Having a lawyer draft the agreement can save you time and stress
People often assume that the only options they have if they want to live with a partner and own property or other assets together is to either start a domestic partnership or get married.
If you’ve ever done a search for “What is the divorce rate in the US?” and have seen that in 2022, it was 2.4 per 1,000 people, it might have given you pause and made you reconsider whether marriage is the best option for you.
Domestic partnerships can be an alternative choice, but they’re not available in all states, and they have some downsides, too. Domestic partnership vs. marriage can be a tough decision to make, which is why it’s important to know there’s a third option: cohabitation agreements.
A cohabitation agreement for unmarried partners protects both people and ensures that everyone is aware of their financial responsibilities. Learn more about the cohabitation agreement definition and the benefits these arrangements can offer.
Cohabitation Agreement Meaning
A cohabitation agreement is a legal document between people who aren’t married but who choose to live together and share certain assets. These agreements establish the responsibilities and rights that each person in the relationship has and outline what would happen in the event of a breakup.
Cohabitation agreements typically address issues involving property. Unlike married couples, those living together don’t have automatic rights, even if they’ve shared a home for years and have children. If you choose to split up, that means you don’t have the same rights as you would during a divorce, either.
With a cohabitation agreement, you can outline contributions toward the expenses throughout the relationship, establish responsibilities when it comes to debts, address who will remain in the home if you separate, and many other similar issues.
Cohabitation agreements may be important to consider, but some circumstances make them even more important. If there are significant financial disparities, if you have previous marriages, or if you own a business or home together, these agreements can be invaluable.
Benefits of a Cohabitation Agreement
There are important reasons to consider drafting a cohabitation agreement.
Protecting Individual Assets
A property division lawyer may recommend cohabitation agreements to protect your individual assets. In this way, it functions a bit like a prenuptial agreement, ensuring that there’s a clear understanding of what is yours.
It will also outline how everything will be divided if you choose to separate, which helps when you’re thinking about purchasing a home together.
Cohabitation agreements are very helpful even for people who own a home and start living with their partner. It can clearly state whether the other person has ownership rights or not.
Manage Debts
Whether you or your partner is bringing debts into the relationship or you accrue them while you’re together, cohabitation agreements can address who is responsible for paying them. This can help ensure that one partner will not be unfairly burdened by the other’s debts.
Outline Financial Responsibilities
Cohabitation agreements can also establish who will be responsible for paying certain expenses while you live together. It can determine mortgages, household maintenance purchases, rent, utilities, and a variety of other expenses.
Protect Business Interests
If you or your partner own a business, a cohabitation agreement can protect your interests. It ensures that the other person will not take ownership of the business without your permission.
Protect Dependent Partners
When couples spend years living together, one partner may sacrifice opportunities to help the other one succeed. If they later separate, cohabitation agreements grant rights to a partner who may be dependent on the other because of these choices.
It could even outline provisions for payments similar to spousal support. An alimony lawyer can help with these arrangements.
Make Separation Easier
If you decide to separate from your partner, you can expect fewer issues and less contentiousness with these agreements. You will have a clear idea of what you can expect during the process regarding the division of assets, financial debts, and financial support. Having an agreement in place could prevent needing to go to court.
Simplify Custody Arrangements
If you have children, one of the most difficult aspects of separating from a partner can be ensuring that your custody rights are respected. This is complicated even in marriages, so it can be doubly so if there are no formal arrangements made. With a cohabitation agreement, you can create fair custody setups that benefit everyone.
Manage Estate Planning
A cohabitation agreement also makes it easier to protect your partner’s rights to your inheritance. It can be combined with other estate planning tools, such as trusts and power of attorney, to ensure that your assets and loved ones are protected.
Hiring a Lawyer for Cohabitation Agreements
As with any legal documents, it’s important to have a lawyer draft a cohabitation agreement. They can verify that there is no vague language that would open the door to litigation and that everything is above board.
At ConsumerShield, we connect people with dependable and experienced lawyers who can handle all manner of legal issues. Whether you’re looking to set up a prenup, draft a will, or plan a cohabitation agreement, family lawyers can guide you. Contact us to learn how we can help you find the right person for the job.
