Are you concerned about the legal protection of your cohabiting relationship?
You are not alone. More and more couples choose to live together without getting married these days. However, here is something you may not know…
If you and your partner are not married, you have next to no legal rights as a couple.
That’s where cohabitation agreements come in. These handy legal documents can protect you from a world of pain, financial ruin, and expensive litigation.
In this article, you will learn:
- The legal risks of living together unmarried
- What is a cohabitation agreement, exactly?
- Essential elements every cohabitation agreement should contain
- Common pitfalls that could leave couples empty-handed
- How to craft a rock-solid cohabitation agreement
Why Unmarried Couples Need Legal Protection
Living together may be the natural and stress-free option, but it may be anything but that from a legal point of view.
Research data shows that 59% of 18-44 Americans have lived with an unmarried partner at some point in their lives. Unfortunately, most cohabitating couples have no legal protection whatsoever.
Here is the problem:
When an unmarried couple breaks up, the law treats them like two strangers who just happened to share a home. Your partner can take everything, and you would be left with absolutely nothing.
And worse? If something happens to your partner, you would not have the right to make any medical or health care decisions for them. You would also not be entitled to inherit any of their property. The legal battles that families of such couples usually get into are heartbreaking. They can break couples apart and empty their bank accounts quicker than one can even imagine.
No wonder more and more couples are reaching out to affordable divorce attorney services in Mesa, AZ and family law firms to draft the right cohabitation agreements to protect themselves.
What Is A Cohabitation Agreement?
A cohabitation agreement is nothing else but a prenup for the unmarried couples.
It’s a legal contract that clearly defines the exact ownership of properties and assets, as well as financial responsibilities and other things.
Sounds pretty smart, doesn’t it? But there is more to a cohabitation agreement than just protecting your stuff.
A cohabitation agreement can also help you with:
- Property division and ownership
- Financial obligations
- Healthcare and emergency decisions
- Inheritance and estate planning
- Custody of a pet (Yes, pets too!)
- Post-relationship support
The best thing about this approach is that you get to define all those rules when you are both happy and together. Not during the hard and messy breakup times when your emotions are most likely to be sky high.
Essential Elements Every Cohabitation Agreement Should Include
You want to make sure that your cohabitation agreement is legit, right? Well, there are some important things that you have to include in your agreement to ensure that your partner is covered:
Property Rights and Ownership
This is the meat and potatoes. Your agreement should clearly state all the following:
- What property each person owned before cohabitation
- How you will handle purchases made during cohabitation
- Who is paying for household expenses
- How will you split the property if you break up?
Here is something most people do not think about:
Your small purchase can become a bone of contention and dispute. That couch that you purchased together, that joint bank account, without well-defined rules, everything can become a battleground.
Financial Responsibilities
Money causes breakups and fights with your partner. And this section should cover the following:
- Who pays rent/mortgage
- Who will split the utility bills and other household expenses
- Separate or joint accounts
- Rules for major purchases
Healthcare and Emergency Decisions
Did you know that if you are not married to your partner, you don’t automatically have the right to make healthcare decisions on their behalf? Oh, and you also can’t inherit their property.
This section should cover the following:
- Medical decisions in case of an emergency
- Rights to visit your partner in the hospital
- Entitlement to health insurance benefits
- Wishes in the end-of-life care
Inheritance and Estate Planning
If you do not have a marriage license, you automatically have zero inheritance rights over your partner.
Your cohabitation agreement should cover all the following:
- Who is inheriting what in case of death
- Life insurance beneficiaries
- Retirement accounts and property transfer
Common Mistakes That Couples Make That Cost Them a Lot of Money
I have seen too many people make these mistakes, and I hate it when it happens. I want to save you from wasting your time and money making these mistakes and discuss them in detail below:
Mistake #1: Believing That Common Law Marriage Protects You
Let’s start with a fact:
The majority of states do not even recognize common-law marriage, and even if your state does, chances are you do not qualify.
Mistake #2: Relying on Verbal Agreements
Verbal agreements can never be proved in court. Everything needs to be put in writing, signed, and notarized, or you might be in trouble.
Mistake #3: Using Cookie-Cutter Online Agreement Templates
Online templates are good for some situations. But cookie-cutter agreements may miss important provisions that would be extremely important to you as a couple.
Mistake #4: Neglecting to Update the Agreement
Your life will change. So will your agreement. New assets, job changes, changes in relationship status, etc. If something changes in your life, you need to update the agreement to reflect the changes.
How to Draft Your Protection Plan
Now that you know why you need to get your cohabitation agreement in order. Let’s discuss what needs to be done to protect you from legal disputes and financial losses:
Step 1: Have The Hard Conversations
Before you even start drafting your cohabitation agreement, you and your partner need to sit down and talk.
About everything:
- Long-term relationship goals and plans
- Financial expectations of each other
- Property ownership preferences
- Future planning, support, etc.
These conversations are not going to be easy. But they are necessary.
Step 2: Collect All Necessary Financial Information
You need full financial disclosure from your partner to prepare an agreement.
The following documents will come in handy:
- Bank account statements
- Property titles and deeds
- All the debt information
- Income documents
- Investment portfolios, etc.
Step 3: Work With a Qualified Attorney
It is not a DIY project. Family law is complicated and changes with each state.
You will need an experienced family law attorney who will make your agreement:
- Legally binding
- Comprehensive
- Tailored to your specific needs
- Correctly executed
Step 4: Review and Update Regularly
Your cohabitation agreement is not a one-and-forget-it kind of thing.
You need to update it:
- Annually
- After major life changes
- When you acquire new significant assets
- If your relationship status changes
The Need for Legal Clarity Is Growing
Fasten your seat belts because the landscape is about to change drastically. Research data suggests that a whopping 65% of US Americans now support allowing unmarried couples to enter legal agreements giving them the same rights as married couples for health insurance, visitation rights, or even property inheritance.
The public opinion is slowly changing. People are starting to see the problem and the need for better legal protection for cohabiting couples.
The solution is not to wait for these changes to happen. You need protection NOW.
Action Steps Before It Is Too Late
I will let you in on a secret:
The longer you wait to draft and execute your cohabitation agreement the longer you leave yourself financially and legally exposed. Involvement of unmarried partners in family law disputes is becoming more common. They are also notoriously more difficult and expensive to resolve.
The solution is simple, though: Get proper legal documents in place while your relationship is on solid ground.
Don’t get in over your heads with assumptions about the rights you have as a cohabiting couple. Take action and protect yourself NOW.
Your Next Steps
Remember, there is much more to a cohabitation agreement than protecting your property.
Drafting a cohabitation agreement will force you to sit down and talk with your partner about money, property, financial obligations, and many other things. By answering all these questions together you can actually strengthen your relationship.
Remember: The right time to create these documents is the time when you do not even think you need them. By the time problems appear, it is usually too late.