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Moving in together is a big step for every couple, whether married or not. However, for couples who aren’t married, living together can present a number of challenges if the relationship doesn’t work out. No one wants to plan for the end of a relationship especially when things are going well, but as your lives become intertwined, you face both financial and legal risks. A cohabitation agreement can provide clarity and protection for those who are unmarried in the event that your relationship comes to an end. 

What is a Cohabitation Agreement?

In basic terms, a cohabitation agreement is a legally binding contract between two people who are living together but not married. A good cohabitation agreement will address how the following matters will be addressed during your relationship and in the event you decide to part ways:

• Property
• Debts
• Inheritance
• Children
• Health care issues
• Estate planning issues

Your cohabitation agreement can address almost anything provided that it doesn’t violate the law or is contrary to public policy. It’s also important to note that a cohabitation agreement can be a good idea for those who are in romantic relationships as well as non-romantic relationships such as people who are living together as long-term roommates. 

Why You Need a Cohabitation Agreement

For married couples who decide to separate, the law is fairly settled as to how various obligations will be divided between the event of a divorce or legal separation. For example, Washington is a “community property” state. All debts and property acquired during the marriage will be presumed to be “community property” and divided more-or-less equally between the spouses. If the couple purchased a home during their marriage, the house will be considered property of both spouses even if only one spouse is named on the title. The same applies to debts. That way, one spouse doesn’t wind up impoverished or saddled with debt in the event of divorce. 

Unfortunately, these laws do not apply to unmarried couples. As your lives become financially intertwined, you, therefore, expose yourself to legal and financial risks in the event that you separate. For example, perhaps you helped make the down payment on a house, but the title and the mortgage are in your partner’s name. In the event of separation, you may have no legal rights to the home or reimbursement for your contribution to the down payment or the monthly mortgage payments. Similarly, you could wind up solely responsible for debts that you incurred for your partner’s benefit. Of course, the situation becomes even more complicated should you and your partner decide to have children. 

How a Cohabitation Agreement Can Help

A well-drafted cohabitation agreement should function almost identically to a prenuptial agreement. It will lay out how responsibilities will be shared during the relationship and how these responsibilities, possessions, and other issues will be addressed in the event you decide to separate. It can also provide guidance in the event of an emergency such as a health crisis or even death.  

Ideally, you would enter into the agreement before moving in together or shortly thereafter. The benefit of drafting a cohabitation agreement is that you can approach these issues in a calm and reasonable manner and negotiate an agreement that you are both comfortable with. Trying to resolve these issues in the middle of an emotionally-charged, acrimonious breakup can be extremely difficult. A cohabitation agreement removes all of these issues so you can deal with the emotional impact of your separation. 

How to Approach Your Partner About a Cohabitation Agreement

Many people are very reluctant to approach this subject with their partners for fear that their concerns will be misinterpreted. However, planning carefully for your future together isn’t limited to married couples. If you are struggling to broach the topic with your partner, here are some suggestions: 

• Emphasize that the agreement is intended to provide fair and equitable protection for both of you
• Explain that, by and large, the agreement would be an important financial planning tool. 
• Explain that the final agreement would be the product of open and transparent negotiation between the two of you. 
• Explain that the agreement could provide important guidance in the event of serious illness or death. 
• Explain that the agreement will clarify responsibilities and obligations for both of you, ultimately avoiding the issue that most couples fight over – money. 

Avoiding the conversation could cause major problems if you later separate. 

How to Draft a Cohabitation Agreement

Before sitting down to draft the agreement, you and your partner should take some time to discuss your plans, your priorities, and your current and future needs. In particular, you need to consider the following questions: 

• Do you plan to rent your home? Do you plan to purchase a home in the future? 
• In the event that you separate, who will remain in the home?
• Will the rent or mortgage payments be shared equally?
• Who will be responsible for paying the utilities? 
• For shared purchasers such as a home theater system or a car, how and when will these purchases be made?
• How will regularly occurring living expenses be shared while you’re living together?
• In the event of a separation, how will shared property be divided? What about pets?

The questions you need to ask, and the answers to those questions, will depend entirely on your relationship, your finances, and other factors that are personal to your life and your relationship. 

The main issue is whether your cohabitation agreement will be legally enforceable. For this reason, you should consider hiring an attorney to draft your agreement – they can ensure that it will comply with the law and be enforced by a court in the event that becomes necessary. 

In the event that hiring a lawyer isn’t feasible, you can find templates online. However, you should read the document carefully to ensure that it will provide the guidance and protection you need. Choose a template that can be easily edited to suit your needs. 

Lastly, you should proceed cautiously if you choose to draft your own cohabitation agreement without a template. Not only do you need to worry about whether the agreement is legally enforceable, but ambiguities and contradictions can lead to disagreements that may ultimately require the intervention of a court. Many homemade agreements also fail to consider important issues. While lawyers can be expensive, they can also be an investment in peace of mind. Ultimately, your cohabitation agreement is an insurance policy that you will hopefully never need to make a claim on.