A Brief Introduction About the Cohabitation Agreement
Married couples have a legal binding that financially protects both the partners after a divorce. They don’t have to necessarily sign a contract to be legally bound to the state laws. Marriage itself is a contractual relationship. However, unmarried couples who are in a romantic relationship and live together need a contract or agreement that can explicitly describe their financial obligations. Such an agreement is known as the Cohabitation Agreement. It safeguards an individual’s assets and interests in an unmarried partnership. Cohabitate means to live together. The definition of cohabitation comes from there only.
For most couples, planning for a divorce or any other financial dispute may look like an unromantic thing to do, but they must realize that the absence of such an agreement can be dangerous for both of them.
The Cohabitation Agreement must address some important and crucial questions such as how jointly owned or bought properties will be divided after the breakup, what happens to the property one partner acquired before the relationship if one of them passes away unexpectedly, how living expenses will be shared while they are living together, how day-to-day finances will be managed, etc.
Another name for the Cohabitation Agreement is Living Together Contract or Living Together Agreement.
Who Takes the Cohabitation Agreement? – People Involved
A Cohabitation Agreement or a Living Together Agreement is signed between a couple who lives together in a romantic relationship but is not married. Such a couple is not bound by marriage or divorce laws, and they don’t enjoy protections or benefits that married couples do. Hence, they get into the Cohabitation Agreement.
Purpose of the Cohabitation Agreement – Why Do You Need It?
In many states, couples and their families may get hesitant of live-in relationships thinking it’s not secured and protected by the laws. However, in recent times, couples are choosing such relationships over marriage. The cases of unmarried couples living together in a romantic relationship are only increasing. The option of getting into the Cohabitation Agreement has helped in a huge way. The agreement included all financial arrangements, obligations, and issues such as property division, acquisition, and distribution of assets.
This agreement also serves the needs of each individual party. Many states don’t address laws relating to children of unmarried couples or the distribution of property upon the death of a cohabitant. With the help of the Cohabitation Agreement, unmarried couples can address such crucial issues and make sure there is no legal dispute in the future.
In simple words, the main purpose of the agreement is to financially protect the unmarried couple or their children in the case of divorce or death of a cohabitant.
Purpose of the Cohabitation Agreement in points –
- Reduces the possibility of legal disputes between unmarried couples
- Makes both the partners legally bound to follow pre-decided provisions
- Protects couples in financial affairs and personal affairs
- Reduces the burden off in the case of breakup or demise of one cohabitant
- Creates an explicit framework on how to deal with issues in the case of a breakup or fight
- Safeguards child support and child custody issues
Contents of the Cohabitation Agreement
The best thing about the Cohabitation Agreement is that they can’t be forced upon couples. Couples can mutually decide what all issues they want to include in the agreement. Since this agreement provides such freedom, couples should take their time and enter into it fairly and freely. They should be extremely cautious and alert while deciding on the inclusions. They must always take time and mutually conclude on the terms, conditions, and provisions of the agreement.
A Cohabitation Agreement must include the names of two people living together and entering into the agreement. It must include all their basic details and address of their common house. Further, the agreement will include crucial details such as how bills and other expenses will be split, lists of joint property, their details, and how property will be divided if the relationship ends. It must also include the details of a property that is not jointly owned, but the couple has decided what portion goes to whom in the case of a breakup or demise of one partner.
As discussed above, each state may have different rules of legalizing the Cohabitation Agreement. Thus, the agreement must specify which state law applies.
Here are some more point-wise inclusions in the Agreement –
- Names and details of the parties involved
- Effective dates
- Full disclosure
- Details of separate and joint properties
- Details on how both the separate and joint properties will be divided in the case of an unforeseen event
- Details on how daily expenses and bills will be split
- Effect of Separation or Death
- Effect of marriage or couple turning into roommates
- Details of child support and child custody in case it applies
How to Draft the Cohabitation Agreement?
To draft a Cohabitation Agreement, first and foremost, both the parties should be aware of the terms, conditions, state laws, legality, personal rights, finance details, etc. For a couple who is romantically in a relationship and is willing to live together, it can be difficult or even unromantic to discuss such a contract or agreement, but one must understand that in the case of a breakup it can be hugely risky if they don’t consider specifying financial or personal obligations. In fact, there can be challenges such as debts relating to household goods and personal items, and there can be additional expenses; there can be a risk of losing the properties, etc.
Further, both parties should consult an independent lawyer. The agreement will be legally binding so long as both parties have independent legal representatives. This will also make the agreement a fair deal for the couple.
Another thing that couples who are moving in together should focus on is about the child. It is most important to specify what happens to the kid when the couples separate.
If one partner brings a family house or property and doesn’t want to share it with the other partner, this also should be specified in the agreement.
In the end, the agreement must be made enforceable and legally binding. One must be extremely cautious while drafting a cohabitation Agreement and must take legal help.
One of the best things about a Cohabitation Agreement is the mutual respect and understanding between the two people signing it. In most cases, with the help of mutual understanding and negotiations, couples can make sure that there is no third party intervention, and they respectfully follow the provisions decided at the time of signing the agreement.
It is only in rare cases when couples turn hostile and want to drag the court for dispute resolution. It is suggested that at the time of framing the agreement, couples decide on all crucial details to avoid a loss to either of the parties involved.
Benefits & Drawbacks of the Cohabitation Agreement
As discussed above, A Cohabitation Agreement is a Living Together Agreement for unmarried couples who want to safeguard their respective future when it comes to financial and personal issues.
Here are some of the benefits of the Cohabitation Agreement –
- Avoids legal conflicts in the case of a breakup
- Specifies rights on an individual’s assets
- Specifies rights on joint assets
- Explicitly describes how joint assets will be divided
- Specifies how regular expenses will be dealt with
- Reduces the possibility of financial loss in the case of a breakup
- Increases the fairness
- Makes both the parties legally bound
There are no drawbacks to the Cohabitation Agreement if both the parties specify their needs and their requirements in the agreement while drafting it.
What Happens in Case of Violation?
If the couple makes the agreement legally bound, both the parties remain protected by the state laws. For each state, the law may be different, but if the parties have their individual legal representatives, it can be made sure that the financial and personal rights of each party are protected and respected. In most cases, the agreement also makes sure that the finances are dealt in a fair way for both the individuals. If one of the partners turns hostile, then the other one can take the help of the court.
It is suggested that both parties must ensure the legality of the Cohabitation Agreement while drafting and signing it(1).
A couple has all the rights to decide what all key issues they want to address in the Cohabitation Agreement. Such a quality makes this agreement a vital piece of document for unmarried couples who want to live together. Eventually, this agreement provides protection to both individuals. At the time of drafting the agreement, it is most likely that both the individuals would want the terms, conditions, clauses, and provisions to be fair to each other.
Financial issues, daily expenses’ issue, or property related issues are some of the crucial ones when the couple decides to split up(2). At the time of splitting up, it is given that the couple has a lot of emotional work to do, and in such a situation, A cohabitation agreement can make sure that they don’t have to get involved in sorting out or fighting about all such crucial issues.