Living Together Without Being Married? How Cohabitation Agreements Can Protect Assets
With the divorce rate near 50%, more couples are choosing to cohabitate before marriage or in place thereof for various reasons. Some opt to live together to “test drive” what marriage would be like while others cohabitate because they believe that such an arrangement would allow them to avoid certain responsibilities or financial burdens that may come with marriage.
Whatever the case may be, those who cohabitate should consider forming a cohabitation agreement to protect themselves and their possessions.
What is a Cohabitation Agreement?
A cohabitation agreement is a contract between two unmarried parties who live in the same household and are in a romantic relationship but are not married. The agreement states what happens to the parties’ property and finances should they end their relationship.
As a result, the cohabitation agreement will protect the interests of both parties and avoid any potential legal conflict that could arise from a breakup.
What Should be Considered When Drafting a Cohabitation Agreement?
Wealth and property ownership between the parties should be considered when drafting a cohabitation agreement. Addressing the wealth disparity will allow the parties to agree on the allocation of finances in the event of a breakup and protect them from any uncertainty should it lead to legal action in the future.
Additionally, a cohabitation agreement should state what will happen to the real estate property in which the couple is residing should the relationship terminate. Couples should be sure to detail the following aspects related to the property in the agreement:
- Future payments including rent or mortgage
Kogut & Wilson can provide guidance for those considering a cohabitation agreement. Schedule a consultation with one of our attorneys to help you take the next step in your relationship