Do I Need a Cohabitation Agreement?
Many couples choose to live together as unmarried partners, whether it is to test the waters before marriage or to avoid the formalities of marriage. Upon marriage or divorce, specific legal rules and statutes are attached and are applicable to the relationship. However, when couples cohabitate but do not marry, they do not have the same legal protections or specific guide . Entering into a legally enforceable cohabitation agreement can help establish rights, duties, and financial obligations for unmarried couples living together.
What is a Cohabitation Agreement?
A cohabitation agreement is, essentially, a legal contract. When two unmarried people live together, they will frequently commingle their finances and responsibilities. For instance, they may share a mortgage payment, utility bills, a car payment, and grocery bills. Without the same protections as a married couple if the relationship does not work out, disputes between unmarried cohabitants over property and finances can be complex and costly. It is thus critical for partners to have a legal safeguard in place.
A cohabitation agreement outlines the financial duties to one another until the relationship is terminated and after the relationship. The specific rules and requirements for the proper formation and consideration for any other legal contract apply. These agreements can also give unmarried partners certain property rights they would not otherwise have in the event of a partner’s death or incapacity.
Cohabitation agreements can address the following issues in the event a relationship ends or a couple breaks up/parts ways:
- The property and debt of each person prior to cohabitating, during cohabitation, and after cohabitation.
- The contributions of each partner toward rent, utilities, groceries, and other bills while living together.
- How shared property accumulated during cohabitation is to be divided if the couple splits.
- How to handle any shared debt, if the couple split.
- What will happen to the apartment or house.
- Who will keep any shared/joint pets.
Cohabitation agreements can not only prevent lengthy disputes if a couple parts ways, they can also reduce the potential for misunderstandings. Such agreements provide a sense of security and clarity during the relationship by outlining expectations in the event of a split.
Who Needs a Cohabitation Agreement?
Although some cohabitating couples keep their finances separate and split bills equally, others (especially living together for a considerable amount of time) end up commingling their finances. In such cases, a cohabitation agreement is helpful. Cohabitation agreements are a smart, proactive idea if you and your partner intend on purchasing property together, taking out a joint credit card, or opening a joint checking account. The agreements can also outline each partner’s household responsibilities. Notably, a cohabitation agreement can protect the interests of both parties as long as it is fair and entered into willingly.
What is the Difference Between a Cohabitation Agreement and a Prenuptial Agreement?
No relationship begins with the expectation of it ending. In addition to a cohabitation agreement, couples intending to marry can enter into a prenuptial agreement. However, a prenuptial agreement does not go into effect unless or until the couple gets married. Such agreements typically include language such as “The Agreement shall become effective only upon the solemnization of the parties’ marriage.” Although cohabitation and prenuptial agreements can address many of the same issues, cohabitation agreements go into effect immediately if the couple is living together, without the requirement of a “triggering event” or the “effective date.” (i.e., the date of marriage).
A cohabitation agreement only applies to unmarried couples, and if such couple signed a cohabitation agreement and later decides to marry, they should consider entering into a prenuptial agreement.
Contact an Experienced North Dakota Family Law Attorney
Drafting an enforceable cohabitation agreement is a smart way to ensure your financial interests are protected if you choose to live with your partner without marrying. A skillful divorce and family law attorney can help you craft a legally valid and enforceable agreement. At Fremstad Law, we assist clients with a wide array of family law matters, including cohabitation agreements. We welcome you to contact us online or by calling (701) 401-9220 to learn how we can assist you.