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Cohabitation means that individuals who are not married have decided to live together in an intimate relationship.
Marriage is a legally binding relationship that involves a license that is applied for, completed, and returned to the state after the nuptials. If the couple decides to split up, they must undergo a separation or a divorce. In many states, separation and divorce are separate legal processes. However, you don’t necessarily have to file for a separation. When a couple splits up, the assets and debts must be divided. How this is done depends on several factors including whether the state is a community property state, what assets or debts each person brought into the marriage, assets and debts were established during the marriage, and what the two parties can agree upon in terms of dividing those assets and debts. There may also be a legal obligation for spousal support.
Cohabitation is not a legally binding relationship in the same way as marriage. The unmarried partners live together. They may bring in separate debts and assets. They may acquire debts and assets. One person may work and another person may stay home. Yet, if the couple splits up, there is no official process to end the arrangement. The couple may elect to sue one another in small claims court over assets and debts. There is no legal requirement for support of the respective rights person who may have stayed home.
Marriage and cohabitation do have one thing incommon: custody of minor children. If there is no custody agreement in place by the court, shared biological children between the two parties have equal rights to the child or children. Child custody, visitation, and support should be established regardless of whether you are getting a divorce or ending a cohabitation. With that being said, the father of any child born in a marriage has the legal presumption of paternity. Whereas, if the parents are not married (although they live together), the father must establish paternity through legal proceedings or a DNA test.
Married couples have legal rights if one partner dies. The surviving spouse usually inherits the belongings of the spouse who dies. When people cohabitate, they do not automatically receive benefits of any kind (including inheritance) if their partner dies.
If you want to live with someone with whom you have an intimate relationship, you should consider using a cohabitation agreement. With a 50% chance that your relationship will end, having a cohabitation agreement can make the split up easier. Additionally, the document is also used to outline responsibilities of each person during the course of the relationship. If you can say yes to any of the following questions, a cohabitation agreement can help protect you.
- Do either of you own a house or other property that you want to keep for yourself if the relationship ends?
- Do you want to make a list of who is responsible for certain bills, including your own individual debts and household expenses?
- Do you want to ensure that you know who owns specific items, such as new furniture or electronics, that are purchased during the relationship?
- Do you want to document how bills are split, which investment accounts belong to each party, and how any joint accounts should be handled (including how much each party is responsible for depositing for paying the bills)?
- Do you want to ensure that your partner is taken care of financially or for them to inherit all or some of your belongings in the event that something happens to you?
- Do you want to name your partner as your emergency medical representative if you can no longer make your own medical decisions?
- Do you need to recognize the contribution made by a stay at home partner?
- Do you want to protect yourself or your partner and ensure they have money to move or support themselves if the relationship ends?
Is there a child or children biologically related to both parties?
A cohabitation agreement acts as a roadmap to amicably end a relationship of an unmarried couple who lives together. Once the document is signed, it may be considered legally binding depending on the state. A cohabitation agreement can clearly explain who owns which assets. You can list the assets belonging to each person that came into the relationship. You can also list the debts that each person brought into the relationship. You should specify that separate assets and debts remain separate if the relationship ends.
The agreement can also outline shared assets. That means assets owned by both parties. These are items that would be divided between the parties if the relationship ends. How the property should be divided may be listed in the agreement. It could be that one of the parties maintains possession. It could be that the item is sold and the proceeds are split. If the item is subject to a payment plan, the person who will take possession of the asset may need to refinance it to remove the name of the other party.
Shared debts, such as cosigned loans or joint debts, may also be addressed in the agreement. The debts assigned to each individual should be refinanced to only that individual or other arrangements should be made to ensure that the assigned partner takes full responsibility for the debt.
A cohabitation agreement can also outline financial support for dependent minors or for a stay at home partner if the relationship comes to an end. However, child support is also a federal right of the child. Child support guidelines exist for every state. While you and your partner may agree to an amount, either partner may go to court to get that amount approved. The court may change the amount.
The basic components of a cohabitation agreement are:
The title “Cohabitation Agreement” or another name that accurately reflects the purpose of the document.
The date that the parties are entering into the agreement.
The name of the parties and the state where they live.
A statement that the parties are consensually entering into the agreement to live together.
The date the parties began to live together.
A statement that the parties are entering into the agreement to explain the status, ownership, and division of property owned or acquired in the future by either party or the two parties together.
That the parties recognize that the distribution of the property, given a break up, will be governed by the agreement and by state law if necessary.
A section that addresses property ownership of separate property and assets acquired together, including how that property will be distributed or disposed of if the couple separates.
How separate and joint debts will be handled in the event of a separation.
Whether support will be paid to either party if a separation occurs.
If there are minor children, the amount of support that will be paid.
Whether the cohabitation agreement gives each partner (or either partner) inheritance rights. Note that this should be done in addition to ensuring that each party has a Last Will and Testament in place.
A signature and date for each party. You may also need to have your cohabitation agreement signatures witnessed by a notary.
There are also several clauses that have to do with good faith, governing law, and other legalities. They are usually automatically included in a cohabitation agreement template.
If you think that you should use a cohabitation agreement, there are some legal considerations that you should keep in mind.
Whether a cohabitation agreement is enforceable depends on a few factors. First, whether the contract itself is valid. Contracts must have certain elements and they must conform with the laws of the state where it is written. Second, the terms can’t be ridiculously unfair. If the document is inequitable, a court could toss it out.
Both parties should carefully read the document before signing it. It’s a good idea for each party to have their own attorney review the document before they sign it. A family law lawyer can offer you legal advice and tell you if a hospital or court is likely to honor and uphold the agreement.
The main advantage of a cohabitation agreement is that it helps you avoid the potential problems that come with break-ups: how you and your ex-partner will divide assets, debts, and whether any sort of support should be paid. It can also be used to document who will be responsible for certain bills each month. It can even be used to outline other household responsibilities. To get the most out of a cohabitation agreement, it is important to make sure that the language is clear and easy to understand. When it is written in vague terms, you can create problems for yourself or the court, if involved, will interpret the language for you.
In some places, cohabitation agreements may not be considered legally binding by the court. However, many courts will uphold them if they meet all the qualifications of a legally binding contract in the state where they are drafted and signed. The court may still need to get involved when it comes to certain types of property, such as a home or if someone passes away.
Common law marriage is a term that means a couple has lived together for a certain amount of time and so the law considers them to be married although they did not have a legal wedding ceremony. In the United States, the idea of common law marriage is beginning to fall out of favor. However, some cohabiting couples who’ve lived together for years and years may still be considered common law married even if a state no longer recognizes the concept.
With common law marriage, the parties will have certain rights to assets and possible support if the couple separates. Check your state laws to determine if common law marriage is recognized.
Cohabitation agreements can be helpful for same sex couples if they live in a state where same sex marriage is not recognized or if they simply choose to not get married. In addition to a cohabitation agreement, long-term partners should also consider creating estate planning documents, including Power of Attorney, Living Wills (Advanced Healthcare Directive) and a Last Will and Testament that include the proper language to allow your partner to make decisions on your behalf (if that’s what you want) and that they are able to inherit all or some of your property if you pass away.
A prenuptial agreement is sometimes thought to be a cohabitation agreement. However, they are not the same thing although they have some similarities. A prenup is designed to protect existing or future wealth in the event that a marriage ends. A cohabitation agreement certainly can be used to protect finances and assets, but there is no marriage.