Couples who live together without being married are cohabiting. Some couples may move in together without thinking of a future breakup. If they do break up and one member of the couple moves out, they may be facing some thorny legal questions. A cohabitation agreement may help them avoid this issue.
What a cohabitation agreement does
A cohabitation agreement may help cohabiting couples avoid difficult questions while they live together. Such an agreement may also help them in the event of a breakup. Beyond that, these agreements spell out who is responsible for rent, daily expenses and food.
A cohabitation agreement may work in the same way as a prenuptial agreement. Couples who spell out who gets what after a relationship falls apart may be able to avoid going to court should there be a disagreement. For couples coming from more than one culture, this agreement may help them avoid disagreements stemming from cultural preferences or misunderstandings.
Protecting finances and assets in a cohabitation agreement
Those couples who consider the future may decide to visit a lawyer to draw up a cohabitation agreement. They know that unexpected events may interfere with their relationship and they want to avoid a potentially painful court hearing.
A cohabitation agreement specifies the division of finances, investments, assets and even the pets. If, for instance, one person bought an appliance, the agreement should state that this goes with the person who bought it. The ownership of pets should be spelled out as well.
What cohabiting couples should avoid
Couples should avoid a few things. These include presenting themselves as married and commingling money with joint accounts and debts. The couple should steer clear from co-signing debts belonging to only one partner. They should not hold title to big purchases. One person should not become financially dependent on the other. Both partners should maintain their careers, “just in case.”