What is a Cohabitation Agreement?

A cohabitation agreement is a legal document that works for non-married couples the same way a pre-nuptial agreement works for married couples. The document outlines how living expenses and other costs will be split while cohabitation exists. It also lists specific details about asset and property distribution should the cohabitation eventually cease. A cohabitation agreement can be used by both heterosexual and homosexual couples.

Cohabitation is the act of living together outside of marriage. Many couples prefer cohabitation over marriage, particularly when marriage is viewed as an institution as opposed to a loving bond. Cohabitation may also be preferred for younger couples who want time to live together in a committed relationship before deciding to marry or older couples who have already survived a spouse and would prefer to honor their memory by not remarrying. It is also common amongst same sex couples who may not legally be allowed to marry where they reside.

A cohabitation agreement is recommended for several reasons. With no marriage agreement, many issues such as asset distribution and division of joint property may be difficult to divide if the couple chooses to stop living together. Couples may also not realize that in the event of an untimely death, many places do not recognize cohabitation or common law marriages and can legally prevent the surviving party from accessing any of the estate that is left behind. Having a cohabitation agreement in place not only makes things smoother during a separation, but it can also help protect both parties by preserving their inheritance rights in the event of a tragedy.

The basic details of a cohabitation agreement encompass several areas. The first part generally provides an asset summary for each party that details their individual assets before entering into the agreement. It would also list how any property acquired during the period of cohabitation should be divided in the event of a separation. Finally, the cohabitation agreement will often outline exactly which assets and accounts each party is entitled to inherit should the other party pass away. While many areas do not recognize the general rights of cohabitants, the agreement is a legally binding document that must be recognized.

Cohabitation agreements can also outline other details that are typically reserved for married couples. If the unmarried couple has children together, the agreement could specify any custody and child support arrangements that should be put into place. The document may also include details regarding any financial support owed to each party in the event of a separation, which is particularly useful when one person has a substantially higher income than the other. Similar to alimony for married couples, this type of financial support is often referred to as palimony.