Married couples automatically create a contractual relationship when they file their marriage license. Spouses, by default, agree to a state-imposed agreement that decides each individual’s rights, including property, in the event that the couple divorces. However, if you live unmarried with your long-term romantic partner, a nasty breakup or a death could lead to issues involving property and asset division.
A cohabitation agreement provides you with that contractual protection that married spouses have, but as a cohabiting couple.
1. You bought a home with your partner.
A cohabitation agreement can include terms that cover managing and selling your property if your relationship ends. Additionally, the contract can include how much each partner needs to contribute to the mortgage payments and other property expenses.
2. Your partner is the primary income-earner and you are the primary caretaker.
This relationship dynamic could mean that you put your own career building and income potential on hold. A sudden breakup could leave you in a tough financial situation until you find a job. A cohabitation agreement could mitigate this by including something like a spousal support arrangement or a lump sum payment.
3. You want to protect your significant assets.
In your cohabitation agreement, you can include ownership details for each asset acquired before and during your relationship. Also, the contract can specify what you wish to leave to your significant other in the event of your death.
Overall, if you live with a long-term romantic partner and your relationship resembles that of a married couple (i.e. you share bank accounts, have children together, co-own property) a cohabitation agreement may help you avoid serious difficulties in the event of an unfortunate breakup.
