Cohabitation Agreement: Definition, Key Terms

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A cohabitation agreement is a legal contract that outlines the rights, responsibilities, and financial arrangements for unmarried couples living together. It is a contract signed by an unmarried couple to live together without marrying but wishes to form financial duties. Also, the duty to be formalized includes medical, funeral, etc., to one another until and after the relationship is terminated or if one partner dies. It should also state if spousal support would be awarded to the partner with lower earnings or financial resources. A cohabitation agreement might also establish fair life quality expectations during the partnership. Let’s know more about several aspects of the Cohabitation Agreement.

What is a Cohabitation Agreement?

Over the past ten years, there has been a drastic rise in the number of unmarried partners living together. When unmarried partners cohabitate, they are not subject to the same laws and protections as married couples. As a result, when unmarried partners split, there can be costly and complicated disputes over property and finances.

To avoid these issues, unmarried partners have started utilizing cohabitation agreements.

A cohabitation agreement is a legal document, sometimes called a nonmarital agreement, that protects the rights of the couple and ensures financial security for both parties. This written contract is negotiated between the partners and lays out the obligations of each person.

Some of the issues that may be agreed upon within the cohabitation agreement include:

A cohabitation agreement can be valid between same-sex or opposite-sex couples and can include whatever the party’s think is necessary to protect their interests. In the event of separation, or even death, a cohabitation agreement will make it easier to divide property and obligations.

How Do Cohabitation Agreements Work?

A cohabitation agreement is a written contract that can provide unmarried couples similar protections to married couples. It is similar to prenuptial agreements in that it covers the property and obligations each couple had before beginning to cohabitate.

When two people decide to live together, it is natural that they will begin to co-mingle obligations and finances. This could be a mortgage or lease agreement, utilities, a car payment, or something as simple as groceries. Without being married or having a legal contract in place, neither party’s interests or investments are protected.

Disputes often arise when a couple separates and there is a standing lease agreement or outstanding debt that may have been incurred together. A cohabitation agreement can provide provisions to solve these issues before they even arise.

Before legally drafting the agreement, couples should sit down and agree upon what property belongs to each person and how they would like to divide their assets should a breakup occur. It is always good practice to consult a family lawyer when creating these kinds of contracts to ensure that you are both protected and that the contract follows all legal regulations in your state.

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What’s Included in a Cohabitation Agreement?

One great thing about a cohabitation agreement is that it can be custom tailored to fit the needs of the parties to fully protect them and their property. Below are some examples of provisions and clauses that can be included in a cohabitation agreement:

Like most valid contracts, to be legally binding, a cohabitation agreement needs to include both party’s names and addresses. It needs to be signed by each party and it is a good idea to also have the agreement notarized. Each state handles contracts differently so it is important to follow contract laws in your state to ensure your agreement is legal.

Who Needs a Cohabitation Agreement?

Not all couples will need a cohabitation agreement and choosing to execute this type of agreement is personal and depends on the relationship. Consider these questions when deciding if you need a cohabitation agreement:

If you answered yes to any of these questions, a cohabitation agreement may be a good option.

Other couples who may want to consider a cohabitation agreement are elderly couples who want to ensure their property is distributed properly upon their death, and couples who want to live together but never plan on getting married.

Are Cohabitation Agreements Legally Binding?

Most states will recognize and uphold a properly executed cohabitation agreement. Whether or not a cohabitation agreement is legally binding will depend on the contract laws in your state and if your agreement abides by those laws.

There are some situations where a cohabitation may not hold up in court like if there are terms in the agreement that are objectively unreasonable or if one party signed under force or duress.

The best way to ensure that your cohabitation agreement is fair, properly executed, and legally binding is to consult with an attorney knowledgeable in contracts or family law. An attorney can assist you with drafting and agreement that meets all the standards and regulations of a valid contract.

Benefits of a Cohabitation Agreement

The following are the benefits of the cohabitation agreement:

Cohabitation Agreement vs. Prenuptial Agreement

Cohabitation and prenuptial agreements or prenups are legally binding documents that serve distinct objectives, depending on whether a couple intends to marry or live together. The following are the key differences between the two types of agreements:

Cohabitation Agreement

Prenuptial Agreement (Prenup)

Final Thoughts on Cohabitation Agreements

A cohabitation agreement is an important legal instrument for unmarried couples who want to live together in a committed relationship. The cohabitation agreement provides protection and clarity to both parties involved by addressing many important factors such as property ownership, financial contribution, etc. Before agreeing, each partner should get independent legal counsel to ensure that both parties fully understand the ramifications of the terms and conditions specified in the pact. Lastly, a well-drafted and carefully negotiated cohabitation agreement may provide unmarried couples with peace of mind and security, allowing them to manage their shared life path with confidence and respect for one another's interests and rights.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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