Cohabitation and Personal Property

Living with your partner without getting married can pose legal challenges. Married couples have certain legal rights and protections that affect their property rights if they break up.

However, cohabiting couples do not have the same protections.

Anyone considering a cohabitating relationship should be aware of how property law may affect their relationship. You’ve probably heard of rules about the division of real property. But it’s also important to know that the same rules apply to personal property.

In general, married couples jointly own property acquired during marriage. Cohabitating couples can also own property jointly with the right agreement in place.

Types of Property Ownership

Two or more people can pool their resources to own property. Although most people think of this in terms of purchasing real estate, it is also often done when business partners or friends join forces to buy a building or an expensive item like a boat.

Joint ownership means that all participants share ownership of the property. Partners can share property equally in joint ownership, so each partner has the same rights and access to the property.

Partners can also share the property as a percentage of their contribution. For example, suppose three friends buy a $20,000 boat. One contributes 50% of the price while the others contribute 25% each. In that case, one would have rights to the boat half the time, and the others would each have it one-quarter of the time.

Separate ownership means that each person keeps ownership of the property they buy. Separate property ownership applies in marriage, domestic partnerships, and business relationships.

As long as the owner uses the property and it is not used for the benefit of the relationship, it remains the owner’s separate property.

Property Division between Couples

In any relationship, the division of property in the event of a separation depends on:

• The nature of the property
• The nature of the relationship

Marital property means the assets and debts that the couple acquire during marriage. When a marriage ends, either in divorce or the death of a spouse, marriage laws determine property division. In most states, personal property remains the separate property of each spouse.

In states that recognize common law marriage, couples handle their personal property rights the same way as legally married couples. Common-law spouses face other legal issues, especially if they travel to states that do not recognize these marriages.

Cohabiting couples do not have any legal document or legal protection like a legal or "common-law marriage." They do not have marital property rights over property acquired during their relationship. You may live together for years, have a house, share bank accounts, cars, and investment portfolios together, and still have no legal rights to anything if you break up.

In a cohabitation relationship, all property is separate property unless the couple has a cohabitation agreement saying otherwise. Separate property is anything acquired before or after the relationship. It is also anything obtained during the relationship through gift or inheritance.

Protecting Your Assets When Cohabiting

Most people in long-term relationships remain unmarried because they have philosophical or religious objections to marriage. Since the U.S. Supreme Court made same-sex marriage legal in all 50 states, with the ruling in Obergefell v. Hodges, LGBTQ+ couples have had more options than domestic partnerships or civil unions.

Some partners don’t intend for their relationships to last and then find themselves many years later with children, homes, and other accouterments of married life. You can protect yourself and your partner’s assets by writing a cohabitation agreement no matter where you are in your relationship.

Like a prenuptial agreement, a cohabitation agreement lets you and your partner decide how you will share any property acquired during your relationship. You can agree to keep personal property separate and decide what will happen if you break up after you buy expensive items. These agreements help avoid arguments or litigation over who has to pay credit card debts or is liable for cars or other shared expenses.

Estate Planning

You may also consider estate planning if you and your partner have a long-term relationship. Unmarried couples cannot automatically inherit from one another like married couples. Surviving partners cannot legally access their partner’s bank accounts (except joint bank accounts in both names) and cannot make medical or end-of-life decisions for one another.

If you have children in common, you will need to include them in your estate plans, particularly in states that do not recognize cohabitation.

Two states, Mississippi and North Carolina, still have laws prohibiting cohabitation. You will need a will or trust naming your partner and children as beneficiaries to avoid any difficulties in probate.

Financial Responsibilities

If you and your partner have implied agreements for financial support, especially if you have children, courts may enforce these agreements. If you made a promise to take care of a partner or put their name on an insurance policy, courts can infer that you intended to keep that promise.

Courts always impute child custody and child support payments with or without a written agreement. A child’s mother can sue for paternity if necessary, and courts always act in the best interest of the child. If you want to be part of your child’s life, having a separate parenting agreement in place is a good idea.

Buying Real Estate

In addition to personal property for their shared living space, unmarried partners often purchase real estate together.

Business partners and co-owners of commercial property frequently own real property in their own names or as part of a corporate purchase. Buying property as a cohabiting couple requires more forethought and planning.

Unmarried cohabitants have the same options as married couples or co-tenants when buying a home:

• Joint tenancy with right of survivorship: Both partners have equal ownership rights. If one partner dies, their share passes automatically to the surviving partner. Joint tenants cannot sell or encumber the property without the other owner’s consent.
• Tenancy in common: Each partner has an interest in the property equal to their contribution. If one partner dies, their share goes to their heirs or beneficiaries. Tenants in common can sell, mortgage, or subdivide their shares without telling other owners.

Before unmarried couples make any real estate purchase, they should consult a family law attorney and have a written agreement about how they will divide the property if their relationship ends.

Houses and Improvements

If one person already owned the house and the other partner moved in, the property won’t need to be divided. The house stays in the original owner’s name. However, if the other partner contributed to the home’s upkeep or improvements, the doctrine of unjust enrichment may apply.

Unjust enrichment means one person contributed money or other assets to the property’s value and deserves repayment.

For instance, suppose that while they lived together, the couple put a new roof on the house with their combined paychecks. A year later, they separated. The new roof increases the house’s value by $50,000.

Letting the homeowner retain the entire value would be unjust enrichment without compensating the other partner for their contribution.

Unless a couple has a cohabitation agreement, they would need to go to court for an equitable distribution of funds after the relationship ends.

Pets and Sentimental Property

Domestic partners may put off having kids until their relationship is more secure, but they may not wait to get a dog or two. Everyone loves their “furbabies,” but may not think about deciding who will take the dog or cat if they separate.

For legal purposes, pets are still considered personal property when partners separate. During a marriage, spouses can include the pet in their marital settlement agreement. Cohabiting partners need to include it with their cohabitation agreement. Otherwise, the pet goes with whoever purchased it.

This is true for any sentimental items that belong to the household. If you have an item you both cherish for the memories, it belongs to the purchaser, unless you both bought it. Then you’ll have to agree to divide the cost.

Get Legal Help with Cohabitation

Couples may choose to live together without getting married for many reasons. But, this may give rise to legal challenges for cohabiting couples that decide to break up.

For help with a cohabitation agreement, talk to a skilled family law attorney. They will give you valuable legal advice to help guide your decisions. They also will be knowledgeable about your state laws and apply them to your situation. They will advise you on your legal rights and help you put protections in place if things go sour.