Planning · April 21, 2023

What to Know About Forming a Cohabitation Agreement

Gregory Wesley-Shanks

CFP | Wealth Paraplanner


Cohabitation has become a common practice for many adults across the country. According to the US Census Bureau, the number of unmarried partners living together has nearly tripled in two decades, from 6 million to 17 million.

While cohabitation may seem like an easy way to share expenses and test the waters before getting married or staying in a long-term relationship, there are important legal and financial considerations to keep in mind. To address these concerns, cohabitation agreements have become increasingly popular among couples who want to protect their interests and establish clear expectations from the beginning in the event of a breakup or unforeseen circumstances.

Whether you or your adult child is considering cohabitating with someone, it's important to understand what a cohabitation agreement covers, why you need one and how to get one.


What is a cohabitation agreement?

A cohabitation agreement is a legally binding document that outlines the rights and obligations of unmarried couples who live together. It can cover a wide range of issues.

  • Property ownership: This includes information on who owns what, how the assets will be divided if the relationship ends and whether one partner will contribute more to the purchase or maintenance of the home.
  • Financial support: This covers whether and how much support will be provided to each partner during the relationship or after a separation, and whether one partner will be responsible for the debts or obligations of the other.
  • Children: This details how the couple will raise children, if any, including parenting responsibilities, custody and child support.

Why you need a cohabitation agreement

While living together may seem like a simple arrangement, it can become complicated when it comes to legal and financial matters. Without a cohabitation agreement in place, there's no clear framework for resolving disputes or dividing assets in the event of a breakup or death. This can lead to costly legal battles and emotional stress.

There are several compelling reasons couples should consider a cohabitation agreement.

  • Protection of assets: A cohabitation agreement can help you safeguard your property, investments and other valuable assets if the relationship ends or one partner dies. It can also prevent costly legal battles, especially if you own a home, business or other valuable assets.
  • Clarity and predictability: A cohabitation agreement can clarify the expectations and obligations of each partner, which can reduce misunderstandings and conflicts. It can also provide a roadmap for resolving disputes, such as mediation or arbitration, instead of going to court.
  • Customization: A cohabitation agreement can be tailored to your specific circumstances to include your financial situation, family situation and personal preferences. It can be updated or revised as needed, reflecting changes in your relationship or life circumstances.
  • Peace of mind: A cohabitation agreement can give you and your partner peace of mind, knowing that you have a plan in place for the future. It can also demonstrate your commitment to each other and your responsibility for your mutual welfare.

How to get a cohabitation agreement

To get started, consult with a family law attorney with experience drafting and reviewing cohabitation agreements. They can help you understand the legal implications of the agreement, advise you on the terms and conditions, and ensure the agreement complies with state laws and regulations.

An experienced attorney can also help you negotiate the terms with your partner to ensure that both parties are comfortable with the agreement and fully understand its implications, and they can help execute the agreement and register it with the appropriate authorities, if required by law.

The bottom line

A cohabitation agreement can be a valuable tool for unmarried couples who live together and want to protect their interests and plan for the future. By addressing property ownership, financial support and other critical issues with the help of an experienced family law attorney, you can reduce conflicts, provide clarity and predictability, and ensure the agreement is legally enforceable and tailored to your needs.

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