Navigating Cohabitation: What to Consider When Preparing a Cohabitation Agreement

Today more than ever, couples are choosing to cohabitate before getting married or opting not to marry at all.  What is cohabitation?  Cohabitation is when two unmarried individuals are living together.  Cohabitation offers a number of benefits: financial benefits, shared responsibilities, partnership, and more.  In addition to some of the benefits, it also brings legal implications that should be well-thought-out and thoroughly discussed between both individuals before making the big move.  One important document that can help clarify all expectations and protect both parties involved is a cohabitation agreement.

What is a Cohabitation Agreement?

A cohabitation agreement is a legally binding document made for unmarried couples who live together or plan to live together.  It outlines each person’s legal rights and responsibilities during the course of the relationship and in the case of a separation. A cohabitation agreement is beneficial in preventing disagreements down the road.

Who Needs a Cohabitation Agreement?

It is a common myth that only wealthy individuals or those with large assests should have a cohabitation agreement.  This is not always the case.  Any unmarried couple who are living together or plan to live together should engage in a cohabitation agreement so they will be protected in the event of separation or death.

Why You Need a Cohabitation Agreement:

1. Outlining Expectations: A cohabitation agreement will clearly outline the terms of property division and responsibilities, financial expectations, household expenses, pensions, future property obligations and more.
2. Protection of Assests: In some cases, one partner may own significant assests (property, business, etc) prior to moving in together.  A cohabitation agreement will protect these assets in the case of separation.  On the contrary, one individual may carry larger debts when entering the relationship.  A cohabitation agreement can ensure that debts remain separate in the event of separation.
3. Avoiding Legal Disputes and Costly Legal Fees: It is always important to plan ahead.  A cohabitation agreement does not mean you will break up.  However, in the case of a break up, having a thorough agreement will make for an easier and smoother separation process.  Creating a cohabitation agreement will highly reduce the possibility of a lengthy and costly legal battle in the event of a separation.

Helpful Tips for Creating a Cohabitation Agreement:

Creating a cohabitation agreement can feel overwhelming, but it doesn’t have to.  Here are some helpful tips to consider:

1. Seek Separate Legal Counsel: In order to ensure that a cohabitation agreement is done correctly, both parties involved should have their own legal counsel.  At Gelman and Associates, we highly recommend having a lawyer draft your agreement, or provide Independent Legal Advice.  It is important to keep in mind that one lawyer cannot represent both sides.  While it is possible to write your own cohabitation agreement, it is not recommended.  When each party is represented by separate counsel, it will be more difficult to make a claim for duress, or challenge the agreement in court, should you separate.
2. Include Thorough Details: Your agreement should cover the following:
   • Financial responsibilities and obligations for each individual during the relationship (household expenses, rent, mortgage payments, utilities, car payments, etc);
   • Financial obligations and responsibilities for each individual should you separate;
   • Property rights and all future property rights;
   • Spousal support obligations in the event of a separation.
3. Provide Full Financial Disclosure: Both parties must provide complete disclosure of your financial status to one another.  If you do not provide complete financial disclosure, or intentionally omit any assets/debts, it is possible that the agreement may be argued in court or risk being thrown out all together.  Financial disclosure must include a detailed breakdown of the following:
   • Income (how much you make);
   • Financial assests (properties or valuables);
   • Expenses (a total breakdown of what you spend);
   • Debts (what you owe)
4. Establish Mutual Consent: Both parties involved must willingly agree to all terms of the cohabitation agreement.  This agreement should absolutely not be signed under duress or without full understanding of the terms and implications.  Keep in mind that a cohabitation agreement is beneficial to both individuals.
5. Review and Update Regularly: It is important to review and update your cohabitation agreement from time to time.  As life circumstances change, your cohabitation agreement may change as well.  For instance, if you and your partner decide to get married, you may want to make amendments.  These amendments must be put in writing, signed, and witnessed.  Always ensure to consult with a family lawyer if you are looking to make any changes.  Remember that a cohabitation agreement can also be drafted if you are already living together.

If you are considering moving in together, or are currently living together, drafting a cohabitation agreement with a family lawyer can be a proactive step towards a stable and mutually beneficial living experience.  Contact Gelman and Associates today to gain valuable information regarding your rights and responsibilities when living with a partner.  Call us at (416) 736-0200 or 1-844-736-0200 or contact us online for a consultation.