Why Unmarried Couples Need a Cohabitation Agreement

It’s very common now for unmarried couples to live together, and there are numerous reasons why a couple might opt out of tying the knot officially. Nevertheless, marriage offers certain legal rights and protections both during marriage and in the event of a divorce to which cohabitating couples are not entitled. It is therefore all the more important that cohabitating couples consider the legal and financial implications of their living arrangements and what will happen if their relationship ends.

Whereas marriage is, by default, a legal arrangement regulated by the state and can be modified by a prenuptial or postnuptial agreement, cohabitating couples do not have commensurate legal protections to married couples. When a married couple ends their relationship, there are laws to regulate how they divide their property, how their debt will be divided, and if either person will be provided with spousal support.

Cohabitating couples are not given the same protections under California law. California also does not recognize common law marriages, so cohabitating couples cannot claim a common law marriage in California. The only legal protection that they share with married couples is in regards to any children that you and your cohabitating partner may have. In that case, the courts will determine child custody and child support in the event that a cohabitating couple splits up, but property issues will still be left to the couple to resolve.

What Is a Cohabitation Agreement?

A cohabitation agreement is a written contract between you and your cohabitating partner that is designed to protect the financial interests of each partner both during and/or if and when a relationship ends or one partner passes away.

What Goes into a Cohabitation Agreement?

Any cohabitation agreement can define the financial responsibilities of each partner during the time they cohabitate and should detail how any existing and future property will be divided if you split up or one of you dies. The following are examples of provisions that can be included in a cohabitation agreement:

• How income and expenses will be divided during the relationship
• Whether any property acquired during cohabitation will be owned jointly or separately
• What will happen if one partner becomes disabled or is otherwise unable to earn an income
• How retirement funds will be shared during the relationship
• Who will have the right to live in any shared residence if the relationship ends
• Who will be responsible for paying any mortgage payments, property taxes, rent, utilities, insurance, and other expenses if the relationship ends
• If one partner has to move out of a shared residence, how much time they will be given to do so
• What will happen to any property you owned prior and acquired since cohabitating, including pets
• Who will be responsible for debts incurred during and prior to cohabitation
• Whether one partner will be responsible for providing any financial support to the other partner, how much support will be provided, and for how long

A cohabitation agreement can also include directives regarding child custody, visitation, and child support. It can even include a provision about what will happen if the couple decides to get married, including whether the couple will then craft and sign a prenuptial agreement.

What Are the Benefits of a Cohabitation Agreement?

You might feel awkward or uncomfortable broaching the idea of a cohabitation agreement with your partner, but it is important to keep in mind that there are many benefits to a cohabitation agreement, including:

• Clear communication
• Better long-term financial decisions
• More security

In deciding to cohabitate with your partner, you are also agreeing to share certain financial responsibilities – rent or a mortgage payment, utilities, and household expenses. If there is a significant income disparity between you and your partner, one of you might be financially dependent on the other. As your lives increasingly comingle over the years that you live together, you will likely make more and more of your financial decisions together.

The reality is that finances can be a pressure point for all couples – married or not – and discussing these issues ahead of time in an open and honest way can build trust between you. As part of the process of creating a legally valid cohabitation agreement, a reputable attorney will likely recommend that you provide each other with a full disclosure of your assets and debts. Ultimately, the conversations you have as you draft your cohabitation agreement can help sustain the health and longevity of your relationship.

Furthermore, creating a cohabitation agreement helps many couples begin to map out their financial futures. The process of creating a cohabitation agreement allows you to articulate to each other how each of you envision your partnership, including your financial goals. Ultimately, by sharing openly and honestly about the state of your finances, your future goals, and what you’d like to happen if your relationship ends, you will be better able to make financial decisions that reflect your shared needs and desires.

Finally, in the event that your relationship ends, a cohabitation agreement gives you both a set of clear expectations for how you will disentangle your lives from one another and ultimately move forward. This clarity can ease anxiety that one or both partners may have about taking this important step in your relationship and help you to both feel more secure in the life you are building together.

If you are considering cohabitating with your partner, a cohabitation agreement can help you establish a solid base for your future both during and, if necessary, after your relationship. Hiring an experienced and knowledgeable family law attorney to draft your cohabitation agreement will help to ensure that the document is legally valid and will be held up in court if the need should arise. If your partner has suggested a cohabitation agreement and retained an attorney to help draft it, it is important that you have your own lawyer review the agreement before you sign it. At Cutter & Lax Attorneys at Law, we can help you craft or review a cohabitation agreement to protect your financial security.