Although most people don't realize it, marriage is a legal contract between two people. It defines the rights and obligations that each party owes to the other. Unmarried couples can also create express contracts to define these rights. These contracts go by various names. They are often called cohabitation agreements, non-marital contracts, or living together contracts.
These contracts function similarly to prenuptial agreements. They set forth how money, property, and debt will be handled during and even after the relationship. It may seem highly unromantic to ask your partner to make a contract with you. But, in the process, it will tell you a lot about yourself, your partner, and the maturity of your relationship.
This article outlines the basics of cohabitation agreements.
Deciding Whether You Need a Cohabitation Agreement
It doesn't make sense to enter into a non-marital contract in every relationship you may have. Instead, living together agreements are more appropriate for long-term relationships. Cohabitation agreements are also appropriate for relationships involving significant money, property, and debt.
These agreements may also be a good idea for older couples to ensure that property is distributed upon their death as they wish. Finally, couples who don't believe in the institution of marriage, for whatever reason, should strongly consider such an agreement. Even if you're morally or philosophically opposed to marriage, defining the relationship's rights is still smart. You can also define the obligations of both parties and how property is to be distributed in the event of separation or death.
The Legality of Cohabitation Agreements
Contracts that function similarly to marriage between unmarried couples have not always been on sound legal grounds. The uncertainty behind non-marital agreements ended in 1976 when the California State Supreme Court established the now widely held justification behind allowing non-marital agreements. In the case Marvin v. Marvin, the California Supreme Court held that:
- Unmarried couples may enter into written and oral contracts that cover rights often associated with married couples (such as property rights to property acquired during the relationship).
- Unmarried couples may create "implied contracts" without ever writing them down or expressly speaking about them. Instead, a court can evaluate the couple's actions to determine if a non-marital agreement has been implied in their relationship.
- If no implied agreement is found, a judge can presume that the parties intended to "deal fairly with each other" and grant one party rights and obligations consistent with equity and fairness.
Contents of a Cohabitation Agreement
Non-marital contracts don't need to be overly complex or contain legal-sounding language. On the contrary, it's better to make the agreement in plain language, and include as much or as little detail as the couple feels is necessary. Here are some items to consider:
- Property accumulated during the relationship: It's essential to define how property acquired during the relationship should be treated. For example, if one person buys something during the relationship, do both parties own 50% of it? Does whoever bought it own it? What if the item is purchased using personal savings?
- Property acquired by gift or inheritance: Generally, people keep items received as gifts or by inheritance as separate property. If you and your partner want to do this, write it down so there is no confusion.
- Property from before the relationship: Many people like to keep items received before the relationship began as separate property. If you and your partner want to do this, write it down so there's no confusion.
- Expenses: Make sure you cover how expenses will be paid. This can be a massive area of disagreement, so it's essential to write down your expectations. For example, you might split household expenses 50/50, make it proportional to income, or pool your resources into a joint bank account and pay jointly. Some couples share joint checking accounts. Be careful, however, because this can create liabilities if you decide to go your separate ways.
- Separation or death: Although you may not want to consider it, defining what happens when the relationship ends is important. It's important not to leave the status of property and money in limbo if a couple splits up. If you are unmarried partners, you will not be entitled to spousal support like partners with marital status. You should outline how the division of property will be handled if you separate or pass away. This can be done with the help of an estate planning attorney.
- Dispute resolution: If a dispute arises, couples may want to define how it should be resolved. A typical example would include mediation or arbitration before taking the matter to court. Some issues, such as child custody and child support, may require alternative dispute resolution.
Call a Lawyer Before You Sign Any Cohabitation Agreements
Having a living together contract can help clarify important issues. Non-marital cohabitation agreements can help avoid problems down the road. Unmarried cohabitants should consider speaking to an attorney for help.
Attorneys will help provide you with valuable legal advice. They can help advise you on your legal rights. They will be knowledgeable about your state laws and the family code of your state. They will help make sure your written agreement is legally solid. Attorneys will provide you with peace of mind about your cohabitation contract.
Talk to an experienced family law attorney about a cohabitation agreement today.