What is a Cohabitation Agreement?

When a couple marries, they create a contractual relationship that decides each individual’s property and other rights in the event of a divorce. Married couples automatically agree to a state-imposed contractual agreement that divides mixed assets, joint investment, and jointly owned property if the couple divorces. Unmarried couples that live together, on the other hand, do not have an automatic contractual agreement. This can lead to issues regarding division of property and mixed assets in a nasty break up. A cohabitation agreement can solve these problems by enforcing the terms of a legal contract.

Who Needs a Cohabitation Agreement?

The number of cohabitation agreements in America is on the rise because of more unmarried couples living together. Any couple living together who has purchased property jointly, mixed assets such as started a joint bank account, or shares investments together should consider a cohabitation agreement.

This agreement does not mean you doubt the future of your relationship; it’s simply a wise way to protect yourself and your partner. In general, cohabitation agreements are only necessary for long-term and serious relationships.

Creating a contract can help you each define your personal rights, needs, and expectations in a relationship. They often give couples peace of mind, especially after a large joint purchase. There’s no way to know if you will be able to reach a compromise or understanding regarding your assets in a breakup. If your split isn’t amicable, you’ll be glad you made a cohabitation agreement. Otherwise, one or both of you could lose assets you had before you began the relationship or those you bought during.

What to Include in a Cohabitation Agreement

Each couple’s cohabitation agreement will look different depending on the assets, property, and expenses. These agreements may be comprehensive and cover everything in your relationship or specific to one asset, such as a home. Discuss what you want to include in your agreement with your partner. The final document should list everything you each want, including anything you plan to share. A cohabitation agreement should include aspects of a relationship that deal with monetary issues such as:

  • Property you each had when you entered the relationship
  • Property you accumulated during the relationship
  • Property you inherited, received as a gift, or bought during the relationship
  • Food, housing, and utility expenses
  • What to do with property if you breakup or one of you passes away
  • Disagreement resolution methods regarding the agreement

Cohabitation agreements typically do not include personal aspects of relationships, such as children, pets, or household chores. California courts are highly unlikely to enforce nonmonetary terms in a cohabitation agreement. Put your cohabitation agreement down in writing, with both of your signatures. While some courts will enforce an oral or implied arrangement, a written contract is always stronger and safer. If your partner won’t sign a written agreement, don’t depend on an oral one – consider yourself without a contract at all.

When to Hire a Lawyer for a Cohabitation Agreement

If your relationship involves a great deal of property or high-value assets, needs complicated estate planning, if one partner has substantially more assets than another, or if one brought more assets into the relationship to begin with, consult with an attorney. In these situations, managing your cohabitation agreement alone can lead to putting decisions down in writing you’ll regret if you split.

Cohabitation agreements and “live together” contracts are valid in the state of California, and couples should take great care when making them. The courts will enforce the terms of your agreement in the event of a breakup. Working with your spouse and an attorney on a cohabitation agreement can help you cover all your bases and come up with a satisfactory contract.