Cohabitation Agreement: Do You Need One?

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Last updated on July 22, 2019 Comments: 13

In the past, I’ve discussed whether couples should sign a prenuptial agreement before marriage. While sometimes controversial, a good prenup can protect both individuals were the marriage to result in irreconcilable differences.

Signing a legal document of this type could be helpful if the couple owns substantial assets or if the couple has a wide disparity in income or wealth. If either or both of the individuals own businesses, a prenup could protect those assets — not to mention the lives of any employees relying on those businesses.

With a growing number of adults moving in together before marriage, more people are looking for the protections of a prenuptial agreement without the benefits of getting married. A 2014 Pew Research poll found that 23 percent of adult men and 17 percent of adult women had never been married. However, about a quarter of the “never-married” crowd were currently cohabitating. This means that a good number of unmarried adults are living together without any sort of legal protection.

The Legal Risks of Cohabitation

Cohabitating may seem like a way to get some of the relational benefits of marriage without the legal risks. But, actually, it too can cause legal issues if the relationship ends. Plus, what if you cohabitate for years in a deeply committed partnership, and want to care for your significant other? Having prior legal arrangements can protect your partner, should something happen to you unexpectedly. Beyond that, many unmarried couples also have children. A prenup-like arrangement can protect those kids in the case of a breakup or death.

Related: How Should Couples Combine Finances?

For these reasons, a growing number of unmarried couples are forming legal cohabitation arrangements. These legally-binding contracts, which are drawn up by an attorney, protect each person’s assets, address child custody and support obligations, and more. In short, they cover a lot of the same territory as prenuptial agreements… even if marriage isn’t on the horizon.

What Should Be Covered?

Of course, cohabitation agreements — like prenups — should include asset protection as needed. They should also deal with issues of splitting common assets. But that’s not all these agreements should include. You should also consider:

Who owns what

Even if you don’t have a business or significant assets, you’re likely bringing some items into the partnership. Your agreement should speak to who owns (and owes) what coming into the arrangement.

Who pays what

These agreements can act, in part, as a sort of rental contract. This piece is necessary if you’re splitting expenses in a jointly-owned property. It’s even more necessary if one partner is moving into a home that the other partner owns.

Deed of waiver

If your partner is moving into a home you own and plans to pay rent, consider this option. It basically says that this person has no stake in your home should you break up. You can have this document drawn up separately from your cohabitation agreement, or work this into your larger agreement.

How things are divided

You may not want to keep a tally of who buys every dish in the cupboard while you’re living together. Avoid this by spelling out how you’ll divide property if you should split up. You can set it up so that what you bring into the relationship goes out with you. If it is purchased jointly, you can divide it up.

Childcare arrangements

What happens if you should have children? Will one partner stay home to care for them while the other works? Things can get tricky in this sort of situation. So, think ahead of time about how you’ll care for any children you might bring into the relationship — even if you aren’t currently planning to have any.

Learn More: Child Care Cost Analysis — Is It Worth the Expense?

Child support arrangements

If you should split up, who will support the children and what might custody look like? Writing these rules into your agreement can prevent a mess later.

Anything else you want to cover

If you’re working with a lawyer to draw up such a contract, you can customize it. Before you prepare your contract, talk about things like:

  • What happens if one partner wants to take time off work to start a business?
  • Who handles chores and maintenance tasks?
  • Should you void parts of the contract in the case of infidelity?
  • What about pets?

To Make it Legally Binding

The cost of a lawyer’s time and expertise to create a cohabitation agreement may be high. Sure, you can get templates that cover the bare bones basics online. But it’s often better to go with the lawyer. They’ll advise you and make sure that the contract doesn’t have any holes. And, of course, you’ll need to go through any processes involved with signing or notarizing the document to make it legally binding.

Don’t Forget About Your Will

Even with a cohabitation agreement, you should both have a will, as well. Cohabitation doesn’t offer the same protections for the surviving partner as marriage. Even if you want all of your assets to go to your partner, that gets tricky without a legal document saying so. Consider writing or revising your wills at the same time that you’re creating your cohabitation agreement. This will help ensure that your assets are disbursed how you want.

Learn More: 3 Must-Have Estate Planning Documents

Prenuptial agreements are important. But cohabitation agreements may be even more so. Without a legal marriage bond, you may be opening yourself up to more complicated legal situations.

Do you believe these cohabitation agreements are necessary? Would you sign one?

Article comments

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Anonymous says:

As someone who has got married at 24 and divorced 3 years later, I would definitely sign a cohabitation prenup. I don’t think it’s “planning for failure” at all. I planned for my marriage to succeed and it still didn’t work out. And I got burned in the process. To avoid that happening again, I will be more cautious and thoughtful in the future. I do however, agree with Jenna, if the relationship is that serious and I’m planning to have kids with this person, I’d go ahead and marry them. It provides a little more security.

Anonymous says:

I would insist on a prenup for living together, as I would for marriage. I see a prenup as a kind of insurance; buying health insurance doesn’t mean you plan to fail your body and get sick or hurt, and an agreement stating who gets what when the relationship goes south is another type of insurance to protect yourself when your thoughts and judgment may be clouded by a broken heart, or an ex’s scorched earth policy.

Not sure if I agree that having a prenup increases a couple’s likelihood of breaking up or divorcing if they’re married. I think our society’s lack of committment to the ideals of marriage as a whole.

Anonymous says:

I would not support a cohabitation agreement. Like with a prenup i feel this type of arrangement is just planning for failure. The standard claim is that 50% of marriages end in divorce and divorce rates are higher in couples that sign prenups (85% within 15 years according to a Fred Cuellar study). While i did not find similar data on cohabitation i’d expect the results are similar.

Plan for failure and it is likely to happen. That said i have seen some prenups that limit the terms of divorce to things such as abuse, adultery, etc. These types of prenups seem like they should decrease divorce rates.

Anonymous says:

I live in a community property state, so…. Remind me not to date you.


Anonymous says:

The thing is though if in just about any other field if you didn’t plan for failure, you’d be called crazy. Would you prefer if an engineer didn’t plan for failures in your airplane, or would you prefer to have no emergency fund for any unexpected ‘failures’, maybe the president shouldn’t plan on diplomatic talks failing with Iran? Planning for failure is good because it can mitigate the harm if an event were to occur, and often in many marriages the fallout affects their children much more than the couple.

I think though you’re right if there is an easier ‘out’ then people are likely to take it. So I’d not deny that having prenups may make people to exit a relationship they otherwise might not have, or might not have been able to. But that’s not necessarily bad. Divorce used to be illegal, even in cases when there was abuse or adulty, so while legalizing it did allow couples to seperate easier, I don’t think you can state that as a categorical negative. Someone staying in an abusive relationship, while a point for the ‘lower divorce rate’ side, isn’t something I think of as a good thing. Also even in other situations, the analogy is either building up pressure in a pot until it explodes, or having a release valve to dissipate the issue before it blows. It’s much better to have a clean and easy seperation than picking up the pieces of something you left stewing for too long.

The idea of ‘marriage is forever’ is part of our culture, but that doesn’t mean that it is the best way of doing things. Even recently the one job/employer for life idea was part of our narrative. Yet we’ve changed such that people hold several jobs now, and usually in different fields. Was that union/pension system of old categorically the best way of working, or are the benefits to this new way of working as well? Things change, and different doesn’t mean worse.

Anonymous says:

I tend to agree with Jenna. If I didn’t want a legal contract, I’d just live with the person casually – and I did just that for 5+ years before getting married. Marriage was getting legal.

Anonymous says:

Personally, if I’m going to live with someone, have children with them and want to protect my assets and health I’ll just go ahead and marry the person.

Donna Freedman says:

I’d insist on one. It isn’t just that the relationship might end — if you or your partner dies, the legal hassles could be considerable.
If/when I decide to live with someone again, it will be with the understanding that my belongings, cash and life insurance go to my daughter. What he has goes to his kids, if he has any, or to the heirs of his choosing.
I’m no lawyer so I’d definitely consult one to iron out the finer points.

Luke Landes says:

And if the opposite situation were warranted, where the surviving member of the unmarried couple is to inherit the belongings but there’s no will, he or she wouldn’t be able to avoid probate like a widow(er) would, at least in some states. From what I understand, dealing with probate is one of the most difficult legal hurdles to get through.

Anonymous says:

It’s not surprising that more couples are going this route. These days common law couples who live together are treated as if they are married in many regards. So it would make sense that in many of those cases, couples would want to protect their assets and figure out what they want to do with things like kids, pets, jointly held assets, etc.

Anonymous says:

I’d sign one. I’ve seen a lot of problems arise when these homes are broken up. A lot of these relationships last longer than marriages, and things are purchased jointly. Not a bad idea.

Anonymous says:

For my own protection and my family’s, I will agree with cohabitation agreement. If one can go for a prenuptial agreement, why not a cohabitation agreement then? I do not see anything wrong with it, especially if you have children or future children to protect and consider.