Everything You Need to Know About Cohabitation Agreements

Division of property: not just for married couples

Something that can turn an amicable divorce into a messy one is the division of property. Who gets the house? Who gets the car? What about the investment accounts or cash? Without a prenuptial agreement, it can end up being left to the courts to decide what’s the fairest split, and both parties won’t always agree with that decision.

Some couples may even choose not to get married in an attempt to avoid the stress that comes with divorce… but it’s not always that simple. In fact, even unregistered domestic partnerships are subject to division of property if parties have demonstrated an intent to share property and the relationship ends. Many unmarried couples don’t even realize they’re in an unregistered domestic partnership until it’s time to go their separate ways and divvy up their assets that may or may not have been contributed to equally.

Forming an unregistered domestic partnership is somewhat unavoidable if you plan to share assets with a partner — unless you get married or register as a domestic partnership — but getting hit by an ex-partner with a claim of domestic partnership is, and a cohabitation agreement is a great option to add some clarity to the relationship and protect yourself at the same time.

What is a cohabitation agreement?

Cohabitation agreements are similar to prenuptial agreements, but they apply to unmarried relationships. Like a prenup, a cohabitation agreement is a way to both recognize a relationship and legally protect assets and avoid unwanted debts. It allows a couple to very clearly outline assets that each party brings to the relationship and how newly acquired assets during the relationship should be split in the event the relationship ends. 

While there are no laws specifically related to cohabitation agreements as of the time of this blog post, they are enforceable under contract law. 

The benefits of cohabitation agreements

Division of property when spouses get divorced can be complicated when there’s no prenuptial agreement in place to guide that process, despite the fact that we have statutory presumptions. The situation becomes even more complicated when property and assets are divided between a couple who have formed an unregistered domestic partnership — even by accident — because there are no presumptions for property acquired during a domestic partnership, and parties often disagree on what they intended to do in the event of their split.

So, for unmarried couples who plan to share significant assets in the relationship, like purchasing a home or cars together, or when either or both parties enter the relationship with large assets that are to be shared, a cohabitation agreement is something to consider.

One of the benefits of cohabitation agreements is providing security and clarity for the relationship. They put the cards on the table and should, if done right, outline clearly what will happen if things end.

Another key benefit is the protection of both parties. Couples choose not to get married for an array of reasons, but that doesn’t make them immune to the same complications married couples face when the relationship ends. 

Many couples who end up in an unregistered domestic partnership don’t even realize they’ve formed one until one party is blindsided by a claim of domestic partnership when the relationship ends. If certain criteria are met, unregistered domestic partnerships are subject to the division of property, which can sometimes leave one party with fewer assets than they believe they’re entitled to. 

But, with a cohabitation agreement in place, it makes it easier for the court to understand the full context of the situation and divide property as it was predetermined in the agreement. No surprises. 

Do you need a lawyer for a cohabitation agreement?

Generally speaking, any contract signed willingly by all parties is legally binding under contract law, but it’s strongly recommended that couples looking to implement a cohabitation agreement seek the professional advice of a family lawyer. 

An attorney who is familiar with cohabitation agreements can help ensure that your contract will hold up in the event of a split and that all assets are covered and accounted for within the division of property determination.

–

Questions about cohabitation agreements and how to protect yourself from a claim of domestic partnership? Reach out to the team at DBMA Family Law Group, and let us help you navigate the complexities of unregistered domestic partnerships!