A cohabitation agreement is a document created by two people in a domestic relationship who are living together. The agreement outlines how they would divide their shared assets in the event they decide to separate in the future.
A cohabitation agreement can be beneficial to non-married couples, as they do not carry the same rights as married couples who decide to divorce.
The Dilemma Facing Common-Law Couples
Generally speaking, couples in common-law relationships walk away with whatever assets they brought into the relationship if they separate. For example, there is no automatic right to the shared home for common-law couples, versus the common equal division of the matrimonial home for married couples.
However, many common-law couples purchase property together, as well as personal property such as cars. They may also combine assets such as bank accounts. So how can they determine the division of these assets if the relationship comes to an end?
The answer is through litigation or mediation, or by adhering to a domestic contract known as a cohabitation agreement.
The Benefits Of A Cohabitation Agreement
A cohabitation agreement allows you and your partner to decide how to divide the life you have built together should the relationship breakdown in the future. It helps you settle certain matters, including:
- Who gets to keep certain assets
- Any spousal support claims that may arise
- How to resolve the issue if only one person’s name is on title
The Creation Of A Cohabitation Agreement
It’s best advised to discuss these topics with a family law lawyer, as he or she will guide you on what you are allowed to include in the agreement, and what you are not.
The document can be created at any time, but it’s usually best to create the document as the beginning of the relationship while both parties are in a better frame of mind to be objective about these issues.
Once a couple decides to marry, a cohabitation agreement will automatically become a marriage agreement.