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Cohabitation Agreements

Cohabitation is a popular choice as an alternative to marriage for many couples. In some states, it is the only alternative for gay couples. It is quickly becoming an important social trend as more and more people choose to live together intimately without the benefit of marital vows. Since two individuals who cohabit are not given the same rights as married couples, it is important to consider the ramifications of doing so as well as the importance of creating a cohabitation agreement.

What is cohabitation?

Cohabitation, which is a legal term, refers to the living arrangement of two people who are in an intimate or romantic relationship and share the same living space. The individuals in this type of relationship are not married.

Why do people choose cohabitation over marriage?

In general, many people cohabitate because they cannot legally marry. Although same-sex marriages have been legalized in some states, individuals who live in the remaining states cannot marry legally. Additionally, people who are already married, but not divorced, may actually decide to live with another individual in an intimate relationship.

Even when people can legally marry, they sometimes choose to cohabitate in order to discover whether or not they are compatible. In some cases, one of the two individuals in the relationship simply does not want to formalize the relationship with marriage because of the social, legal, and personal commitments that entails, and they never intend to marry.

What legal rights do you have if your cohabitation ends?

It is important to note that most states within the United States do not recognize cohabitation as a common law marriage. Therefore, in most states, anyone who is cohabiting is not in a position to benefit from the same rights that married couples enjoy, during the relationship and especially after the relationships ends.

California, Oregon, Nevada, and Washington grant some state-level spousal rights to couples who cohabit together. Hawaii, Maine, Wisconsin, and the District of Columbia do grant most state-level spousal rights to individuals who are cohabiting.

What does this mean for the partners in a relationship when their cohabitation ends?

Basically, both individuals are legally entitled to their own property, possessions, and finances only when they decide to stop living together. Neither party has a legal obligation toward the other regarding financial support, and all debts belong to the individual whose name is on the accounts.

What is a Cohabitation Agreement?

Living together does not come with automatic entitlements to protect both partners who are cohabiting. Therefore, a cohabitation agreement should be created to protect both parties. Designed to establish the rights and responsibilities of cohabiting partners, the cohabitation agreement is sometimes referred to as a living together agreement.

A cohabitation agreement is a legal contract between two individuals who are living together in an intimate relationship. It is designed to simulate the obligations and rights that married people have toward each other to some degree.

The cohabitation agreement establishes certain rights to property as well as delineating financial issues during the living arrangement as well as after it ends. It can include how the expenses are shared, who is responsible for debts/bills, and who retains the rights to the possessions and real estate once the relationship ends due to death or a breakup.

Why should you have a Cohabitation Agreement?

Since each of the partners in the relationship may have different expectations regarding finances, debts, and property, it is important to create a legal document to specify what these are. The primary reasons to create a cohabitation agreement are to define the partnership/relationship legally and to prevent hardship or injustice toward either party in the relationship. It is also used to provide a clear cut portrayal of the expectations of the relationship so that each partner has the same understanding. It clarifies issues that may exist during the cohabitation or that may arise after the dissolution of the arrangement.

Without a cohabitation agreement in place that defines the relationship of the two individuals, the law considers them to be strangers and treats them as such in the distribution of the property. Without such an agreement in place, neither party is treated as a spouse is expected to be treated under the law.

A cohabitation agreement is used for a number of reasons including each of the following:

· In some states, a cohabitation agreement provides validity to the relationship and enables one partner to gain access to certain rights that are provided according to the state’s rules on cohabitation.

· To apportion the assets between the two partners in the event a breakup occurs.

· Guarantee the surviving partner in the relationship the right to inherit property in the event of the other partner’s death. Without this legal documentation, the next of kin would inherit all of the property owned by the deceased. Without the agreement, the individual wishing to make a claim on specific property would need to prove ownership of the item before being permitted to take possession of it.

· To protect the more financially secure individual from exposure to lawsuits in the event of a breakup and to provide financial protection for this partner.

· Protect the less financially secure partner in the relationship and guarantee him an equitable settlement.

· Properly compensate the partner who takes on the role as the caregiver.

· To avoid a lawsuit in which one partner is sued by the other for continued support after a breakup.

A cohabitation agreement minimizes the severity of a dispute when a cohabiting couple decides to separate, easing the stress and anxiety that can arise when relationships end. It can also be used to cover issues such as a break down of household chores and responsibilities, how expenses are shared, and to clarify obligations.

What’s in a Cohabitation Agreement?

Although the contents of a cohabitation agreement are not dictated by legal regulations in their entirety, the following basic conditions are typically covered within this legal contract:

· The determination of financial support during the cohabitation.

· The determination of financial support upon the dissolution of the cohabitation.

· Resolution to outstanding debts.

· Provision of the right to make medical decisions.

· Provision of the right to act as conservator/guardian in the event that one partner becomes incapacitated.

· Creation of a health care proxy that enables each partner to make a health care decision for the other partner in the event of a medical emergency.

· Distribution of the property in the event that the relationship ends in either a breakup or the death of one partner. While the cohabitation agreement might specify that the property will belong to the surviving partner in the event of death, the deeds for any real estate should include both partners’ names and ownership should be set up as joint tenants with the rights of survivorship.

· Determination of custody, support, and visitation rights for any minor children. It should be noted that this particular aspect is nonbinding and the matter may be decided in court.

· Expectations for the division of pensions, retirement accounts, and profit sharing.

· Distribution of individually owned property.

· To claim the existence of a common-law marriage

When can you enter into a Cohabitation Agreement?

Two individuals who intend to cohabit can sign the contract prior to actually moving in together or after they have already begun living together. In general, it is best to execute this type of contract prior to moving in together to minimize discord once the living arrangement begins. There is no legal requirement to create a cohabitation agreement.

What’s the legal validity of Cohabitation Agreements?

Since an informal cohabitation agreement is not legally enforceable, it is important to prepare a formal agreement, signed in the presence of witnesses. In the event that the agreement does not provide fair division of assets and debts, it may not be enforceable.

Certain elements of family law should be followed including:
· It should be a written contract.
· It needs to clearly identify the parties involved.
· The agreement should be signed by both parties in the presence of witnesses.
· Neither party can be under the age of majority.

Certain elements of contract law should be followed including:
· It should be freely entered into by both parties.
· It must include full disclosure by both parties.
· No illegal elements can be part of the agreement.

In addition to the above facets of the cohabitation agreement, each of the following aspects should be duly noted:
· If any part of the agreement is determined to be invalid, the remaining portion remains valid and binding.
· If only one party had a lawyer, all vague aspects of the cohabitation agreement are interpreted in favor of the party without the lawyer.
· Both parties should avoid using the same lawyer to establish a truly equitable contract.
· If the two individuals do marry at some point in the future, the cohabitation agreement is no longer legally valid in most cases.

When should you create and sign a cohabitation agreement?

Certain circumstances merit the creation of a cohabitation agreement including the following:

· The relationship is expected to last a long time.
· A substantial amount of property is involved.
· Only one partner owns the home.
· One partner makes significantly more income than the other.
· One partner stands to inherit a large inheritance or court award.
· One partner has a large number of debts.
· A child is involved.
· Spousal support may be necessary if the relationship ends in a breakup.

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