Modern couples are living together and waiting much longer before marriage, as the number of cohabitating couples has increased by more than 1,000 percent over the last 40 years. Additionally, a rapidly increasing number of couples in the United States are deciding to forgo marriage altogether. As this trend becomes more common, couples need to take steps to obtain various rights that are essentially non-existent outside of marriage.

Without marriage, couples are often seen as strangers through the eyes of the law in situations of unexpected death or the breakup of the relationship. Married couples automatically receive legal benefits, such as the ability to file joint tax returns, receive a property settlement after divorce or receive a share of property in cases of unexpected death without a will. To receive similar rights, unmarried couples can go through the process of obtaining a cohabitation agreement.

Cohabitation agreement overview

A cohabitation agreement is a formal contract a couple can enter stating that they are choosing to live together, but without an intention to marry. It attempts to establish the economic and legal status of their relationship.

The idea is to use property law and contract law to mimic family law as much as possible. For example, a couple could jointly hold a title to real estate (although married couples have super protection from creditors in most states), sign a lease together, define who pays what rent and what utility, share a bank account, etc. They could also enter into a contract to hold certain items of personal property together. They could even design mutual wills or trusts. There are still many advantages afforded under the law to married couples, such as tax breaks and presumptions for inheritances, but non-married couples can enter into certain agreements to protect themselves in a similar, if not identical, manner to a married couple.

Who should seek a cohabitation agreement

Any couple who intends to live together, buy property together, invest together or pool assets should consider such a contract. In the event of a breakup, these agreements can make settling property disputes much simpler. This is particularly important if you intend to make a major joint purchase, like a home. You will both be able to negotiate terms, such as what percentage of the home each of you own or who gets the first right to stay in the residence and buy the other out. This can seriously reduce the contention if you ever decide to go your separate ways, and helps to avoid expensive litigation. It is much easier to split your assets according to the agreement if the relationship sours than deal with all the drama of family court.

A cohabitation agreement can be entered at any point in a relationship, but is often unnecessary if neither of you have much property or when you first move in together. However, the more shared assets you gain, the more important it becomes to protect your fair share.

Cohabitation agreements during divorce

These contracts also offer a way to define who pays what bills, who stays in the house and when (including during parenting time, which is also known as a “nesting agreement”), etc., while a divorce is pending. These agreements can eliminate a number of risks, including:

1. A premature arrangement for parenting time, since a court is unlikely to uproot a child from the marital home while the divorce is pending;
2. Child support and spousal support awards that are premature because they do not take into consideration long-term budgets or parenting time; and
3. Doubled living expenses for two sets of utilities, rent/mortgage, insurance, etc.

However, spouses really have to trust each other and respect each other’s space to make it work.

Drafting a cohabitation agreement

Preparing a cohabitation agreement should take serious thought and consideration from both sides. Although the areas of conversation are bleak (death, the breakup of your relationship, etc.), it is important to thoroughly cover all pertinent aspects and seek appropriate legal counsel to help advise both sides. A problem with these agreements is the lack of a guarantee they will be upheld, since it is possible for one party to take the other to court in attempt to nullify the contract. However, so long as there was full disclosure and fair legal advice on both sides, the courts will generally uphold the bargain. Seeking out a family law attorney experienced in drafting cohabitation agreements will definitely help ensure you come up with a fair and civil contract.

Whether you plan on getting married or not, it is important to ensure your rights are secured in case the unexpected happens. Whether it’s the surprise end of a relationship or an unforeseen accident, having a cohabitation agreement in place can help protect the rights of unmarried couples.