Recently, I was asked to draft a cohabitation agreement by a young professional woman. She is previously divorced and owns the home she’ll be living in with her new partner, and her colleagues told her that she should protect her house and establish a set of rules should they separate. This was excellent advice.
The options to consider when having a cohabitation agreement prepared are:
- Do you want to ensure that neither party has to pay support to the other?
- Do you want property to be split only according to ownership?
- Do you want to protect the equity in a home you brought into the relationship, especially if you intend to live there as a couple, or do you prefer to share the equity in some way?
- Do you want to ensure your spouse will move out of that home should you separate?
- Do you want the agreement to become a marriage contract should you marry?
It makes great sense to make these decisions in advance and set them out in a cohabitation agreement, so that during the relationship and upon any separation, each person has a fundamental understanding of the rules that apply. Of course, if you stay together, you’re free to gift property to the other spouse and to leave him or her whatever you like in your Will.
What surprises me is how infrequently cohabitation agreements and marriage contracts are requested. When I look through the precedents I’ve saved over the years, I’m surprised to see that I draft only one of these per year. That’s a shockingly low amount, when you consider the exceedingly high price of separation and divorce.
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