Give living together a fancy name and you’ve got “cohabitation.” Mix that with a contract and voila, you have a “cohabitation agreement!”
A cohabitation agreement is a prenup without the nuptials that serves to protect a couple who want to live together and avoid unnecessary legal issues and costs, should the relationship end.
It functions as a contract between an unmarried couple who cohabits and enjoys an intimate, economical and social relationship.
A cohabitation agreement is intended to bind both parties and allow them to determine, in advance, what property rights each will have during the relationship. This is particularly important if you want to protect property you inherited or if one of you owns a home in which both of you will live. It’s important to be able to refute any possibility of gifting or reimbursement rights in the event of a dispute.
Cohabitation agreements are particularly beneficial for residents of Texas and other states where common law marriage is recognized. In these states, the parties to a cohabitation agreement are referred to as “spousal equivalents” or something similar because the agreement intends to avoid the creation of a common law or informal marriage.
As with any contract, consideration is required for it to be valid. Consideration is a benefit that must be bargained for between parties. In the case of a cohabitation agreement, it may be a mutual promise to act as companion and homemaker to the other, in addition to other specific promises contained in the agreement.
You will want to lay out arrangements for financial support, debts and caring for the children. You can stipulate if any financial support is expected to be paid, who will pay it, the amount, and for how long.
Life insurance policies are also often a part of these agreements to protect one partner who may be dependent on the other or living in his/her partner’s home.
These agreements are created with good intentions to serve as an outline for healthy relationships based on mutual respect, not surreptitious activities. In other words, cohabitation agreements are not a contract where sexual services are used as part of the consideration for the contract. If there is ever a suit for breach of contract and this is found to be the case, the contract will be unenforceable.
There are three types of cohabitation agreements: written, oral, and Implied. Most states require cohabitation agreements to be written, so it is best to have your agreement in writing because it can be difficult for courts to determine what you both agreed to orally or implied when you don’t have everything you agreed upon written out.
In cases involving oral and implied cohabitation agreements, the intent and conduct of the parties is under review. If there is no independent proof of your intention, courts may choose not to recognize the validity of your oral or implied cohabitation agreement at all.
A lawyer can advise you of your rights, specific to your situation and your state, and help to ensure your interests are fairly and equitably represented in your cohabitation agreement. For this reason, each party should retain his/her own lawyer because one lawyer cannot properly represent both of your interests.
The majority of states, including Texas, recognize these agreements. That said, it is important to note that In the event of a suit for breach of contract, it is rare, nationwide, for courts to award support payments in domestic partner splits. It’s important to know this so you enter your cohabitation agreement with your eyes wide open.