Many couples move in together with no plans for marriage in the immediate future. It works similarly to a prenuptial agreement, but is for unmarried couples. The document usually outlines how living expenses and other costs will be split while cohabitation exists and also lists details about asset/property distribution in the event that cohabitation ceases. Having a cohabitation agreement not only makes things smoother in the event of a separation, but it can also help protect both parties by preserving their inheritance in the event of a tragedy.
Cohabitation agreements are beneficially for a myriad of people, including those who may view marriage as an institution rather than a loving bond. Cohabitation may also be preferred for younger couples who wish to live together in a committed relationship without marriage at the moment, or older couples who have survived spouses and prefer to honor their memory by not remarrying. It is also common for same sex couples to enter into cohabitation agreements in states where they may not be able to legally marry their partner.
The basic parts of a cohabitation agreement encompass several areas. This first part generally provides an asset summary and details their individual assets before going into the agreement. It also summarizes how any property acquired together would be divided in the event of a separation.
The second part outlines which assets and accounts each party is entitled to in the even that one party passes away. The agreement can also outline other details such as any custody or support stipulations or details regarding finances and support in the event of a separation. This type of support is referred to as palimony and is really useful in situations where one party’s income is significantly higher than the other’s income.