COHABITATION AGREEMENT
If you are living in a de-facto relationship, you may need a cohabitation agreement.
Whenever two people choose to cohabitate, they can enter into an agreement whereby they choose to specify the terms of property, money and all the other practical concerns that present themselves. Commonly referred to as a de facto relationship, Cohabitation Agreements can be useful for anyone who lives with their romantic partner. Here is what you should know:
WHAT IS A COHABITATION AGREEMENT? A Cohabitation Agreement is a contract entered into between people who are living together but who are not married. It is essentially a ‘pre-nuptial agreement’ between people who are not married. It is designed to deal with property issues in the event the parties separate.
WHEN CAN I USE A COHABITATION AGREEMENT? Whenever you and your partner live together, or plan on living together, you can enter into a Cohabitation Agreement. You can enter into this agreement before you live together, while you are living together or at any time before you separate. These agreements can be used by anyone who chooses to use them.
HOW DO I MAKE A COHABITATION AGREEMENT? You need to make your Cohabitation Agreement clear and easy to understand. This means you want to put it into writing. Your agreement needs to cover all the potentialities, including what you will do with gifts, living expenses, the death of either party and many other situations. Remember, a Cohabitation Agreement is a plan for a future eventuality. It is intended to serve as a safety net, preventing a problem further down the road.
WHAT SHOULD I INCLUDE IN THE COHABITATION AGREEMENT? These de-facto relationship agreements are intended to deal with the subsequent division of property in the event of a separation. Because of this, it is important that both parties disclose what property they own, have rights in or otherwise possess. These properties need to be written down and made clear to the other party. In addition to property (cash, real estate, stocks, etc.), each person needs to indicate what debts or obligation they have as well. Essentially, each person needs to disclose their financial status, including all assets and debts. Once each party determines what they own or owe, they can determine who gets what in the event of a separation
WHAT ABOUT ITEMS WE BUY TOGETHER? Cohabitation Agreements can also deal with property acquired after the cohabitation begins. Whether you decide to keep it as joint property, to assign the property to one person or divide it in any other manner, the point of Cohabitation Agreements is to make it clear to each person what the status of the property is. If a separation occurs, each person will know what belongs to them and what belongs to the other person.
Cohabitation Agreements have become more and more popular among many people. No matter your reasons for entering into the agreement, you can draft a suitable de-facto relationship contract to cover almost any situation. Whether your property concerns are simple or complicated, making sure both you and your partner understand what will happen if you ever split-up is a wise strategy. It is piece of mind on a piece of paper.